PropTech’s Focus on Top-Tier Markets Has Left the Door Open for Regional Competitors
When rolling out a given technology, even the most scalable platforms, every different market requires a large amount of resources and attention – for international settings even more so than domestic ones. For this reason, most tech startups cherry-pick the most valuable regions as their first areas of expansion. This is especially true in real estate technology, which requires a lot of regional personalization and is at the mercy of long lead nurturing timeframes. Many of the big PropTech companies including VTS, CompStak and Reonomy focused on large markets (usually starting with NYC) before looking to take their service to smaller towns or other cities internationally. Even big residential property companies like Zillow have only just begun to look outside the US for growth.
There is no fault in this strategy. Why not spend your time getting into the most valuable markets first? Why risk rolling out a product that isn’t ready for a specific market? However, the limited ability to onboard lesser known, often international markets has created an opportunity for region-specific solutions to take hold. Evidence of this comes in the form of a new round of funding for Egypt and Saudi Arabia-centric online real estate marketplace Aqarmap. While many PropTech companies are just now expanding to major European markets, other regions such as the Middle East and Latin America are finding their own solutions. For example, MarcoLibre, Latin America’s eBay and most popular e-commerce site, is now listing propertiesitself in a bid to fill a market need. In Asia, Xiaozhu, China-based short-term rental site and Airbnb rival Xiaozhu recently secured a large investment from Alibaba founder Jack Ma’s fund.
So many fragmented regional sites exist that there is even an aggregator, List Globally. Propmodo published an article by them about the importance of marketing a property to a global audience. Finding foreign buyers for U.S. properties is only a small part of the equation, of course. There is also a huge need for efficiencies in smaller countries all over the world. There are language barriers to overcome and often each country has vastly different laws (Mexico, for example, doesn’t require a license to sell real estate) but these can often be overcome by finding a local partner.
