Digital transformation of real estate: Slow because too specific
The application of technology and digital transformation in the real estate and construction industry is assessed by experts as slow compared to other industries. Vietnamese people still have the habit of touching real estate with their hands and having black ink and white paper.
According to Mr. Chu Quang Thai – Digital asset project development expert, in charge of the South office of the National Startup Support Center – The Ministry of Science and Technology, the legal complexity, the lack of transparency along the uniqueness of the position are considered three of the many characteristics that make this field both difficult to transform, so the digital transformation is necessary as a vital solution.
Mr. Thai said that he had witnessed project bidding packages worth about 8 billion VND but needed a three-wheeler carrying documents. Each bid has up to 100 signatures, and if there is an error, the re-signing alone can take up to a month. According to the statistics of Global Property Guide, the paperwork, legal, and supply chain of the construction, real estate, and industrial sectors alone account for 25-30% of the cost in the investment structure.
“How a person in Hanoi builds a villa, a resort in Ca Mau, Phu Quoc… if they do not understand anything. They certainly want to both manage the project and optimize costs, but they do not have management tools, so sometimes they have to let it go,” said Mr. Thai. That’s not to mention the fact that, if encountering “fake” contractors, the investor may be deceived, handing over works that do not guarantee the quality compared to the original commitment. These stories are seen as problems facing the real estate, construction, and industrial sectors.
Since then, Mr. Chu Quang Thai affirmed: “It is important to streamline this field and then digitize it. Then not only the management costs are saved, but the management of a property from the time of an empty piece of land until the construction is completed and put into use and operation and maintenance can also be done by just click, that is the beginning of a “machine business” model in the trend of digital economy development.
Vietnam is certainly not an exception to this trend. The Proptech field has also witnessed many breakthrough technology projects in recent years.
Around the world, investment in proptech (technology in the real estate sector) has exploded. According to a study by EY and CREtech, $75.2 billion in venture capital has been invested into the Proptech market since 2015, and almost a third of that was made in 2019.
Vietnam is no exception to this trend. The Proptech field has witnessed the birth of many technology projects in recent years such as Cen Homes or XIXO. If Cen Homes aims to build a real estate technology platform with a database and a high-precision valuation system thanks to virtual reality (VR), Big Data, and artificial intelligence technology, XIXO is not. brings a technology ecosystem including the e-commerce trading platform “chothicong.com” to digitize the industry supply chain, towards a self-operated platform.
According to Mr. Truong Thanh – CEO and founder of XIXO, the real estate industry needs a common platform to connect the team with the general contractor, between enterprises producing and supplying materials, equipment, and products, consulting with real estate businesses, industrial construction, and connecting buyers and sellers.
“XIXO will be a working platform where all components of the land-attached asset ecosystem can connect, transact and transmit value to each other through smart contracts,” Mr. Thanh said.
Accordingly, the XIXO Platform helps users easily conduct business, build, pay for transactions, and control related activities anytime and anywhere through the XIXO platform with an internet connection. From that, ensure appropriate price criteria, authentic goods, convenience, timeliness, and safety. Besides, the founder of this startup also said that blockchain technology with transparency and security realizes the O2O model (online to offline), meaning that customers only need an idea and budget. The rest will be done by chothicong.com. Thus, customers in Hanoi want to build a house in Phu Quoc, instead of making hundreds of phone calls back and forth and then leaving it to the contractor; now, they just need a computer and make the selection, search for contractors, construction materials, design, construction… and receive daily reports on the system.
Not only that, individuals, service providers, or contractors can easily access insurance services, bank guarantees or brokers, etc in the process of buying, selling, or building real estate. The approval and payment procedures are all done online. For each completed transaction, the two parties will perform a scoring evaluation. The credit score is considered by auxiliary units as the basis for loan evaluation and approval. XIXO has signed a cooperation agreement with insurance unit Vifo. vn aims to cooperate with some banks in the future such as Construction Bank, ACB Bank… A representative of Tpizi.com – a real estate business management platform once shared that a business leader who has limited knowledge of digital transformation and is not sensitive to technology. The traditional operating model is still effective, so it is not easy to convince them to change their mindset and use technology in the process.
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