NAIROBI, Kenya, may 26 – The business of buying and selling property on online portals is so viable that the Managing Director of Lamudi Kenya Dan Karua will start playing golf soon.
Dressed in black jeans and a yellow polo T-Shirt, the 29-year-old University of Nairobi Law graduate is excited to discuss the company.
“Lamudi helps people find homes, land and even commercial properties. We also provide information about property acquisition,” he begins.
According to Karua, the company chose Kenya as a launch point because of the ripe opportunities the country has. The booming real estate sector for instance, was a major opportunity for the German company’s launch.
“Land and property is being developed left, right and centre. We wanted to be the medium that connects the buyers and sellers while giving them the right information.” And that it has.
The company has listed over 50, 000 properties since its launch in 2013, managing to sell at least 5,000 during the year it was launched. It has also gone forth to work with giant companies such as Hass Consult, Pam Golding and Purple Hills.
Lamudi also saw an opportunity in the rise of the country’s middle class as it has disposable income and is tech-savvy. “Our business model is thriving in Kenya because more and more people are online and they understand how things work. The fact that we also provide a lot of information is also reason enough for them to appreciate what we do,” Karua said.
Lamudi, a Rocket Internet start-up, is in 32 countries especially in emerging market in Africa and Asia.
The company has invested over US$250,000 in its Kenyan outfit in an attempt to make it king in a rapidly growing business.
The company has also found success because of offering variety. “We are making the work of buyers easier by availing property closer to them through the website. For instance, instead of someone in Nairobi travelling all the way to Nyali to look for an apartment, they can simply log into our website to check out the available apartments there,”
Rental houses, Karua says, is one of Lamudi’s hottest deals.
“People are always on the move hence rental houses are our fast movers. Apartments are also always on demand especially in Nairobi and its environs,” he adds stating that there is a huge gap in the apartments market as they are undersupplied.
How things work
“If you are looking for a house to buy or rent, whether it is your own or it is for commercial purposes, your first stop should be the Lamudi portal. This is because we have listed thousands of houses from different locations countrywide. We also provide photos and the contact details of the sellers,” he explains.
Property owners are also given an opportunity to list their property on Lamudi. “We not only have property sellers on the website, but we also have contractors and developers who advertise their work,” he continues.
This makes the portal a comprehensive one-stop shop for everyone’s property needs.
The company earns its keep from listing fees from house owners, commissions made after sale of property and advertisements posted on the website among others.
But the company, like any other startup, has not been immune to challenges. According to Karua, the company’s biggest challenge was getting people to get accustomed to the idea of buying or selling property online.
“First, buying and selling property has always been tricky especially in Kenya because of issues to do with credibility. Convincing people to trust an online portal as a place to know where to buy property, a house or even where to move to next became even harder,” Karua laments.
By building a reputable name however, got people warmed up for the idea.
Karua admits that the company had to first and foremost ensure that property listed on the website was indeed genuine. To do this, Lamudi sends its staff to verify the property and check whether the property’s documents are in order.
The company also had to confront the challenge of convincing property owners the benefits of getting their property on the website.
Money is not the company’s major driver, rather relevance. “Going forward, we want to make Lamudi the biggest property portal in the country. We will get there,” says the former Strathmore High School student.
Gone are the days when selling property began and ended with property owners hunting down prospective buyers to strike a sale.
It is now not uncommon to hear land being auctioned on national radio or television. Newspapers and fliers have also not been left behind.
The online platform however, is what makes companies such as Lamudi stand out. This is because they now have a better reach of an audience which is more likely to buy or sell property. Figuratively, PwC estimates that there are 22 million Kenyans online.
Today, there are at least a dozen buying and selling property portals. And the number will most likely continue to grow. According to The Economic Survey 2015, the construction industry registered an accelerated growth of 13.1 per cent compared to a revised growth of 5.8 per cent in 2013. This will directly affected how contractors market their properties making such online portals important.