The trend of digital transformation is happening rapidly in industries that apply high technologies such as banking, finance, telecommunications or in development industries such as real estate. Along with the continuous development and change, real estate enterprises are strongly applying digital transformation as a means to transform themselves, in line with operational practices and development models in Vietnam.
Current challenges and the digital transformation of the real estate industry in Vietnam
The Covid-19 pandemic has had a great impact on the real estate market in general as well as consumer behavior in particular. Real estate products have gradually moved from basic products to many different forms such as apartment real estate, resort rental real estate, logistics real estate, complex real estate, smart real estate,… Not only that, the need to experience and learn transparent information about the investment, construction, operation process as well as high operating standards gradually becomes a basic need today. In response to the changing market, many real estate enterprises have also implemented the application of information technology (IT), deploying some application software such as online real estate exchanges, payment links through intermediary channels or using technologies in construction investment operations such as 3D, BIM,… In particular, some businesses have started investing in ecosystems such as proptech to simplify the workflow between buyers, sellers, tenants, brokers, lenders or landlords. In the world, about 58% of real estate enterprises have clearly defined digital strategies and more than 90% of enterprises have been planning to maintain and increase technology investment towards the experience of residents (1).
However, the situation of digital transformation in Vietnamese real estate enterprises is very low. Most real estate companies are just starting to apply IT at a preliminary level. Leading real estate enterprises have also recently implemented ERP system as a core system to manage inter-department operations. Distributed data sources and discrete amounts of applications catering to customer and resident experiences are common in the industry today.
Vietnamese real estate enterprises are facing a challenge of a strong transformation in keeping up with technology, especially in the next two years. Businesses are in great need of change for consumer behavior in terms of sales model through intermediary distribution channels and multi-channel systems, in which the community, family and behavior of millennials (the generation born between 1981 and 1996) are the main customers today. The use of internet platforms and online platforms to buy and sell homes is becoming a regular tool instead of just a search engine. For selling and brokering companies, the use of video-marketing platforms will be the main tool in the near future.
Real estate enterprises in Vietnam are still quite unfamiliar with building a real estate ecosystem, taking the house or apartment as the center of consumer behavior. Changing this business model by considering alliances or expanding ecosystems requires rapid change. Digital transformation is also a way for businesses to quickly do this.
Optimizing operation with real estate management core system
For real estate enterprises to quickly overcome the above challenges, being ready for conquering technology into an application is an important task in the digital transformation process. The biggest benefit that real estate enterprises need is the data communication in the value chain of products launched in the market in each period.
Real estate enterprises need to consider and develop a suitable roadmap, in which, the construction of a suitable information-technology architecture from which to identify important development and transformation goals, specifically:
To do this, real estate enterprises not only consider ERP systems or sales systems, leasing systems, marketing systems,… discrete operations that need to be structured, built and reorganized according to the future value chain model which not only meets the governance but also is ready to link and expand the ecosystem. Moreover, investing in online platforms for business goals, customers, resident experience, multi-channel experience is one of the important tasks that businesses should perform.
A specific core system according to the technologically oriented development of the real estate industry will gradually replace the previous platforms. Data and technology have become one of their most important assets. Real estate enterprises in addition to factors such as housing fund, land fund, finance. Therefore, this core system needs to be designed appropriately to ensure the life cycle of many different products in the ecosystem with high connectivity in experience and operation. This core system also needs to be connected with proptech technology applications to ensure integrity, instantaneousness and reflect the benefits of data value for business managers.
The development of a suitable digital transformation roadmap to perfect this optimal architecture and core system requires the right consultants and understanding of the industry as well as the movement of real estate companies today. In addition, real estate enterprises also need to be ready for a revolution in transforming from a traditional company to a real estate technology company. Not only does it help companies adapt well to changing markets, but it also helps companies increase alignment, create alliances, or implement M&A (mergers and acquisitions) to become stronger.
(1) KPMG & Deloitte 2019, 2020