It is no secret that Amazon is a once in a generation (possibly once in a century) company. Building a business that does $300 Billion in revenue and growing at ~ 30% YoY is a near impossible feat, and the Jeff Bezos lead juggernaut has managed to achieve the same.
While everyone has their own reasons to admire Amazon, there are 2 core components of their business which I find fascinating. They are –
It is little wonder that Amazon is valued at more than $1.5 Trillion today.
This brings us to the question – Is there an Amazon for the Real Estate industry?
Note: Real estate has different asset classes (Commercial, hospitality, etc.) but I will focus on the easiest to understand, which is Residential.
Real estate companies can be grouped into 3 broad categories
Why isn’t there 1 single company that is able to do all 3 points mentioned above? By the looks of it, these are all portions of a deep value chain (‘Searching’ leads to ‘Transaction’ which eventually leads to help with ‘Property management’). The payday at the end of building such an end-to-end company would totally be worth it too – $5Trillion is the annual spend on real estate a year (Including rentals and sales), and $200Trillion is the total asset value of all real estate (Across the world).
Common reasons we have heard on why we don’t see an Amazon in real estate includes –
While all the points noted above are fair, and real estate is a very difficult domain to operate in, these cannot be acceptable excuses for not building an internationally scalable business. All businesses have their own difficulties, and real estate is no different. Besides, retail and shopping were never an easy businesses to begin with, and no one thought a company of Amazon’s scale could be built in that domain, but here we are.
Although we don’t yet have an Amazon for the industry, a couple of them are coming close. I will write about one of them in next weeks newsletter, so stay tuned 🙂
One thing is for sure – If someone builds an Amazon for Real Estate, it would definitely be bigger than Amazon!
No. 160, Robinson Road,
2nd Floor Property No. 379,HAL 2nd Stage, Indiranagar, 100 ft road Bengaluru, India - 560038