HDFC RED, a 100 per cent subsidiary of HDFC Ltd, is all set for future demand in the real-estate sector across the country.

Five years after it kicked off its business, the company wants to digitise the entire home-buying chain, while focussing on the primary residential market.

Sohel IS, CEO, HDFC RED, shares: “There are multiple plays out here — there’s the rental piece and the purchase piece that can be further divided into primary and secondary markets. The secondary market is about resales. To us, it made logical sense to attack the primary residential market because it contributes the maximum to the economy and enjoys more demand and supply.”

Sohel reveals that given the state of the market back in 2010, when India’s internet penetration was around 8 per cent, going after the primary residential segment seemed the most sensible approach to making a dent as a player.

Choice of game

“Our go-to market strategy reflected the understanding that builders will pay while individuals were not yet geared up to pay.

“And while other players would’ve seen huge cash-burn because of their rental piece, we kept our focus on the primary residential market. Now we see others, too, moving that way. Some players have either shut down their rental offerings or have at least reduced action on that.”

New rental contracts are typically signed once a year or two.

There’s no real requirement for digital-platform interventions because landlords can use brokers. Players who focussed too heavily on the rental segment faced costs to bring supply on board (online) even when there was no infallible revenue stream in sight.

For HDFC RED, thanks to its model, marketing and business development spends are low.

Digital edge

On HDFC RED’s new website and app, many searches are by first-time (potential) home buyers. But regardless of how experienced the buyer is, “every individual comes with negotiable and non-negotiable requirements.”

The platform is designed to steer potential buyers according to their stated and unstated needs.

“There’s a complex algorithm in the background called the congruence engine, for which we’ve even filed a patent.

“Our congruence piece means no house is bad, but it’s about the right fit,” Sohel explains.

Having hit 6-7 crore top-lines in the last fiscal, HDFC RED claims to now cover 23 cities and has more than 3,300 builder listings for 7,700 properties.

The company wants to eventually get digital with the entire buying chain even if actual purchases of homes don’t happen online.

As part of this, it has already enabled virtual-reality elements in its service for builders.

The company has also hired town planners to help it figure out all upcoming infrastructure even as it prepares to cater to a range of customers — from singles to ‘DINK’ (Dual Income, No Kids) couples and families — especially with more smart cities in the offing along with growing internet penetration.

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