By Mr Deepak Kaistha
Having a big lavish property always features in an individual's bucket list. However, given the sky-reaching prices of real estate today, it looks like a distant dream. Experts of the field have time and again cautioned how in the recent times, real estate purchases and sales have dipped. Creating a synergy point between the buyers and sellers, group home buying is a unique catalyst for both buyers and sellers.
Often perceived as a new trend in real estate market, group home buying goes back 50 years. To be precise, group home buying has been plugged as a practical solution for property buyers looking to get attractive discounts. In earlier days, when a stakeholder wanted to buy a flat, a builder would give him a final offer. But with the advent of the group home buying concept, like-minded buyers can now join hands and close the property transactions at attractive prices.
Here is how it works. Sensing a dip in the contemporary scenario of real estate market, potential home buyers get in touch with one another via a general platform, typically offered by a third party or a group buying company, and form a network/group. The third party then approaches the builder with a handsome amount of orders and bargains for discounts. The builder looks at it as a lucrative opportunity to sell a bunch of his properties and agrees to the discount.
Particularly advantageous for builders, property builders get a custom-made market to sell their properties in volume without spending anything in customer attainment and branding. The down payments made in group buying are set on an upper limit, giving them the much-needed cash flow.
For instance, if an X developer is selling a 5 BHK apartment at 14,000 per sq ft. The third party, on behalf of the group buyers, negotiates on the price by bringing it down to 7,000 to 13,000 per sq ft. This concession will be much higher than what is offered in individual property buying cases.
In a classic case scenario, the third party who talks on behalf of the home buyers will in all probability be able to attain a 4% to 10% discount on the value of the property. Meaning, if the cost of your dream home is 80 lacs, you can save up to 6-8 lacs in discount! Adding to the discounted prices, people who buy the property will also be able to share other similar benefits, such as a home loan, lawyers' fee, and compliances.
In view of the wide gap in real estate market today, the call of the hour is connecting the builders with their consumers. And this concept seems like a perfect solution to it. The unique model positioning of group home buying will give buyers a leverage of sitting at the comfort of their homes, logging on our e-commerce platform and making bulk purchases at a pocket-friendly price.
As per my estimate, the real estate market will still take 3-4 years to intensify. Till date, we have 110 million sq ft of unsold inventory, which is an all-time high figure. And by the time this inventory gets absorbed, I am certain that the prices will go up, up-swinging the numbers in real estate market.
Approximately calculating, Group Home Buying as a concept will take about 2-3 years to cement its position in the real estate market.
In the present times, where interest rates are high and stock market tends to change numbers at the drop of a hat, it is a win-win concept for both builders and consumers.
Here, I would like to take this opportunity to announce Volume II of Star Realty – a collector's book edition (an initiative by Planman Media). A real estate bible, which talks about an in-depth analysis of today's real estate market, Star Realty II is all set to be revealed in Las Vegas, 2013. It is a book that depicts the insightful challenges and simplifies the complexities of real estate for people at large.
About Deepak Kaistha:
Deepak Kaistha is the Chief Executive Officer of Planman Media and Managing Partner of Planman Consulting. In just over a decade’s association with Planman, he has been successful in catapulting to a position of prominence in the triumph of the group. He has re-engineered Planman’s transition and organisational consulting businesses by dramatically raising its presence in the corporate world. He has maintained his salience and has expanded his line of business in sales, marketing, finance, human resource, and client relations; and has built a strong base and principled approach that remains undeterred.
He can also be contacted at his:
Pantaloon Retail & Future Ventures Demerge Lifestyle Fashion Businesses to Create India's Leading Integrated Fashion Company
Realignment aimed at simplifying business structure and providing growth impetus to individual businesses thereby unlocking value for shareholders of PRIL and FVIL
Mumbai, November 9, 2012: The Boards of Directors of Pantaloon Retail India Limited (“PRIL”) and Future Ventures India Ltd, (“FVIL”) approved a proposal to consolidate their fashion businesses into a new to be listed entity (“Future Fashion”), which would emerge as one of India’s largest integrated fashion brands and retail company.
The respective Boards approved the demerger of the fashion businesses of PRIL consisting of its Central, Brand Factory, aLL and Planet Sports formats, fashion brands, sourcing and distribution businesses, and the demerger of the fashion businesses of FVIL consisting of Indus League, Lee Cooper, Celio, Holii, Indus Tree and strategic investments in AND, Biba and Turtle into Future Fashion.
Post this realignment, the Future Group will have three distinct listed companies that emerge as market leaders in their businesses with independent growth paths.
A Google India survey said that 7 out of 10 of buyers know the exact brand and model they want to buy with the help of online research before entering the store.
This shift in consumers’ behaviour was attributed to easy access to information on the Internet – which has given rise to “research online and shop offline” consumer behaviour.
A pan India offline study conducted by Nielsen on behalf of Google India, to understand the influence of Internet on technology product purchases by buyers in the stores revealed that Internet influences behaviour of buyers across all type of cities and town with 40 per cent respondents saying they took help of online information for purchase decisions for technology products. The impact was highest for tier-I and tier-II city consumers with 83 per cent respondents saying that they know exactly the brand that they want to buy before they go to the store which highlights the growing reach of Internet which was perceived to be limited to users in metros.
The report also revealed that Internet is now second only to TV to create awareness for tech products - for metro and tier I audience.
The study was conducted across 12 cities in India covering top four metros (Mumbai, NCR, Chennai, Kolkata), four tier I cities (Chandigarh, Pune, Indore, Coimbatore) and four tier II cities (Kanpur, Vadodara, Kochi, Bhubaneshwar) in which, 3,677 respondents were interviewed outside 200 multi-brand and single-brand stores across these cities. It was conducted between January and October.
Another interesting aspect was the use of mobile phones for online research, with 46 per cent respondents saying that they used mobile internet for research and 22 per cent of tier-II consumers used mobile as the sole device for accessing internet for research.
“The retailers’ ability to influence a buyer's mind is diminishing and companies need to look at engaging buyers online about their products and offerings. Secondly, the Internet is impacting decisions in tier-II cities as well and mobiles are emerging as a strong medium,” Rajan Anandan, Vice-President and Managing Director Sales and Operations Google India said. He further added, “While the technology vertical is one of the early adopters of digital advertising medium but there is tremendous scope and opportunity for players to fully leverage the digital medium to engage buyers online including mobile - which is growing faster than the PC”.
The respondents also said that they became aware of new products and brands during their online research process, with over 57 per cent respondents changing their mind about the brand/ model they wanted to purchase when they look for information online. While researching online, buyers engaged in looking up prices of the products, followed by surfing product photographs, reading specifications, watching videos, reading product reviews, locating stores (67 per cent) and visiting product comparison sites.
KOLKATA: Textile major Arvind Ltd is eyeing Rs 1400-1500 crore in revenue from its retail business by next financial year, a top company official said here today.
"We are looking at a turnover of Rs 1400-1500 crore by March 2014 from retail activity," Arvind Ltd Head Retail (EBO) P S Rajiv said here.
The retail business of Arvind Ltd comprises its retail stores under the name Arvind Stores and fabric business, which currently generates revenue of around Rs 680 crore he said.
The company also owned several other retail stores and brands through its subsidiary Arvind Lifestyle Brands Ltd.
"Currently, we have 73 Arvind Stores which would go up to 100 by March and by next year increase to 240," Rajiv said.
"These retail stores will generate revenue of Rs 400-500 crore by FY14 and rest would come from the fabric segment out of Rs 1500 crore," he said.
"Nearly 80 per cent of our stores are located in Tier-II & III cities as the business model fits better in these cities and around 95 per cent of the stores are already profitable," Rajiv said.
The company is manufacturer and retailer of premium denim and cotton fabric, where 60 per cent of the revenue from the fabric business comes from export and going foward is expected to be 50:50, he said.