Can Housing Developer App Boost Property Sales?

Monday, December 27, 2021 TimeTec 2 Comments


According to the Real Estate & Housing Developers' Association (REHDA) Malaysia, there are over 1,000 developers across Peninsular Malaysia, and they are responsible for some 80% of the total real estate built in this country. In recent years the call for digital transformation was brought with the Fintech that refers to Financial Technology; Proptech is the term we used to refer to Property Technology. When Fintech more often competes with traditional financial institutions in delivering financial services, PropTech players usually act as partners by supplementing rather than competing with the housing developers.

PropTech comes in as scattered components because real estate development is a progressive process in stages that comprises pre-development, construction, and post-development, intermingled with sales and marketing activities.

Administration System to Operation System
In general, PropTech transformed the used-to-be administrative system used only by a few administrators to serve a more extensive user base. As a result, PropTech has to come with different modules in different stages throughout the development timeline. In terms of segmentation, PropTech that serves a larger user base can be sales and admin module, lead/CRM system with booking management for presales; and S&P signing to post-sales finance and administration module to keep house buyers updated. A development module probably needs to engage buyers by updating the construction statuses, progressive billings and more, until the property is ready to be possessed by house buyers and clearance of defects. Only then will the entire housing project (if strata-titled) be handed over to JMB (Joint Management Body). And this is where the progressive process stops, and the real estate developer considers its mission accomplished.

Since PropTech is a complex system, I focus solely on the Developer App, which is a customized system typically outsourced to PropTech providers, with the purpose to promote their properties and branding, to engage customers etc. Therefore, the standard PropTech system, mainly in the SaaS model available in the market, will not be discussed in this article.

I pick a handful few Developer Apps here and compare their features to summarize them in the table below:


Summary
1.    Almost all Developer Apps are focused on promoting their properties as their primary objectives.
2.    Among the 11 Developer Apps, two are plugged in with the smart residential system to handle daily property operation (Special login for residents), and 1 (IOI Community) is a purely operational smart residential App.
3.    Many Developer Apps are built with VP (vacant possession) and defect management systems.
4.    The commerce module provided by a few developer Apps is still quite basic.

* As a mixed development project, i-City develops its App to serve its entire community ecosystem with QR pays well. As of 7th December 2021, most icons are still beta, stuffed with information and inquiries only.

Note: The study is based on the superficial features available in the Apps without a detailed examination. Even if two apps have the same features, it doesn’t mean that both are equally providing full functions or delivering the same user experience. In addition, some of the modules like Smart residential, VP and defect management are not available for the public to try, only limited to the house buyers.
I must admit that there is no definitive scope for a Developer App because it is mainly customized to fulfil the developers' requirements. Generally, it is up to the developers to decide the scopes and the main objectives of their apps. And for the property listing features offered by almost all apps, we can assume that most developers emphasize sales and marketing.

However, I'm in doubt of the result for the following reasons: House buying is not like ordinary shopping; only approximately 10% of house buyers invest in more than one property throughout their whole life. When house buyers shop around, they probably rely on more online property platforms such as iProperty or Property Guru to search for their ideal properties, rather than the individual Developer App with limited choices. This point can be proven by the Android installs of 500k+ for iProperty and PropertyGuru, and only around 1k+ up to 10k+ Android installs per Developer App. Some Developer Apps provide virtual show houses for potential customers to have a better browsing experience. But the experience would be better on a larger screen PC than on a smartphone.
 
 
And, if 90% of house buyers can only afford one house and no recurring purchase in their entire life, all the marketing incentives like rewards, wish lists, or promotions make no difference with or without an app.

Indeed, the marketing module can stay but shouldn't be the priority.

 
 
Priority on Operational Module
Developer Apps are more useful if the objective is to target the post-sales activities by enhancing the operational module to elevate user engagement. Once the S&P Agreement is sealed, operational features like progressive billing, construction update, news and announcement, event booking, vacant possession and defect management would be helpful to foster a closer tie with house buyers. After that, the developer can introduce an integrated smart residential community platform to the owners. The digital platform consists of visitor management, facility booking, billing, accounting, tenant management and more; in short, a digital property management system.

It is apparent that real estate developers value data; hence, they are not hesitant to jump onto the digitalization bandwagon. However, when we thought they were supposed to embrace all the above, in contrast, most developers will stop at the Defect Management module after the property is handed over to the house buyers. Even if some developers help the new communities jumpstart an integrated smart residential community platform when the JMB (Joint Management Body for the strata-titled) is formed, whether the JMB continues to subscribe to the system is no longer the concern of the developer. Their digitalization abruptly ends here.

As such is the nature of the developer's business. When a project is completed, the warranty is over; they will move on to a new project. Because they don't see that continuing the digital platform justify their return or help them survive in the everchanging digital era. Or, they don't see that reinvesting in digital transformations could help them harvest new business models, especially when the benefits from data mining for future monetization is still far from reach.

Progressive System to Perpetual System
I summarized the PropTech-led digital transformation in the illustration below to ease understanding.

 
To boost the usefulness of the Developer App, the entire flow from progressive to the perpetual system across the four stages from pre-development, construction, post-development and Community-focused should be more operational-oriented instead of marketing-oriented. Its marketing or commerce value will emerge when the time is ripe.

Based on the chart we recite, mainly the existing Developer Apps cover Stage 1 & 2 but are marketing oriented, a few are extended to Stage 3, and only two Developer Apps arrive at Stage 4 with some Community App elements but still lack depth.

Three Challenges for Developer Apps
I listed three challenges for Developer Apps:

Challenge 1
How to increase the practicality by enhancing the operation modules for Stages 1 & 2?

Challenge 2
How to justify the cost to turn the Resident App into a long-term free digital platform for the neighbourhood at Stage 3?

Challenge 3
How to enlarge the App's scope from serving the resident to a larger public within the vicinity at Stage 4 and justify the cost?

Challenge 1 is relatively simple because many PropTech solutions are out there for grab.

Challenge 2 and 3 are actual tasks. To justify the cost of providing a free digital platform to JMB requires budget planning in a very early stage. For example, if the developer set aside an extra RM1,000 for a unit house price, the subscription can last 40 years be based on the market price of the current smart residential platform. Or, for a high-rise condominium that plans to install an intercom system, since the smart residential platform has such capability that saves the developer, the developer may channel the fund to the long-term payment for its subscription fee.

With the long-term operational system subscription cost resolved, then only developers can have a long-term digitalization plan and continue to take on Challenge 3 to plan for a practical community module that plugged in with Near Field Commerce, data mining and analytics, and monetization in the long run, serving the residents and even the community by and large within the vicinity.

 
Suppose a short-term digitalization plan can stretch to a long-term for standard residential housing projects. In that case, it's inevitable for a long-term township or mixed development project to have a proper digitalization plan or a Super App with robust operational modules to accommodate different types of properties such as malls, schools, office towers, and hospitals in the same area. When a digital platform can provide automation, security, access control, near field orders and deliveries without extra costs, offer social network activities within the community, or in short, I stay, I live, I book, I pay, I work, I shop, I order, I browse from an App; it becomes essential for the developer to create an All-in-One App to create a safe and vibrant community and to promote a digital lifestyle that boosts the property value, benefit the users, house buyers and developers simultaneously.

The App journey has just begun, and the possibilities are endless in the digital transformation era.

Watch TimeTec Digital Building Ecosystem and Smart Township Solution for more ideas.
 
 
 
 
 
 
About Author:
Teh Hon Seng, Group CEO of TimeTec Group of Companies. Prior to forming TimeTec, Teh led PUC Founder (MSC) Bhd to be listed on MESDAQ (ACE) market of Bursa Malaysia in 2002. Teh initiated the R&D in fingerprint technology in 2000, which later developed into a renowned global brand for commercial fingerprint product known as FingerTec. In 2008, he foresaw the trend of cloud computing and mobile technology, and over the years, he had strategically diversified and transformed its biometric-focused products into a suite of cloud solutions that aimed at workforce management and security industries including smart communities and digital building system that centered around the cloud ecosystem. Teh has more than 20 patents to his name, and he is also a columnist in a local newspaper and a writer of several books.

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The Trend of Malaysia's Shopping Mall Apps

Monday, December 27, 2021 TimeTec 4 Comments


Surprisingly, although we can almost purchase everything online, Malaysians still like mall shopping. In 2019, there is a total of 560 shopping malls nationwide, offering a total floor space of 135 million sq ft. The main attraction of shopping mall is that it provides consumers with experience beyond traditional shopping and online shopping. In addition, the increase in urbanization with more people living in smaller spaces makes for a greater need for public spaces for them to chill and hang around. Therefore, unlike regular commercial areas, the mall congregates more people and caters to more social activities in a cosy ambience.

Malls shouldn’t compete with the e-Commerce platforms to provide consumers endless product selection and price comparison. Instead, malls should stick to their nature towards a broadened value proposition for consumers. Nowadays, when e-Commerce is promoting the concept of O2O, online-to-offline, to form a new retail experience; likewise, many shopping malls are riding on the digital transformation trend to go the opposite of O2O, offline-to-online. According to McKinsey & Company, in its article, The Future of the Shopping Mall, Malls leverage technology to improve customer engagement in three ways:

First, extending their relationship with customers to pre-and post- mall visits through compelling content, social media and proprietary sites and apps, as well as loyalty points, customized offers, rewards, targeted advertisements. Secondly, malls are using technology to transform mall usability to improve customer satisfaction, for example, finding parking and thirdly, utilizing digital capabilities to uplift the shopping experience to the next level. Since there is no specific winning formula yet, mall players are encouraged to experiment with a clear mind on various business strategies to make something extraordinary happen.

The App can be an effective tool for malls to interact with customers; I focused mainly on App in this topic as the digital transformation platform discussed.

Surprisingly, even though we have many malls, we only have a handful of mall Apps in Malaysia. I reckon the main reason would be the investment justification. App development costs much higher than maintaining a web portal or a social media platform like Facebook. Nonetheless, we can still find some established shopping malls in Malaysia that have launched their apps in recent years. Therefore, I chose and analyzed some mall Apps which illustrated in the table below:



I made a simple summary based on the comparison table as below:
1.    All shopping mall apps list their merchants or brands.
2.    Product listing is not vital for almost all mall apps because malls promote a physical shopping experience.
3.    Almost all mall apps have loyalty points and reward to drive customers to spend in their malls.
4.    Loyalty points also enhance the stickiness of customers to download and use their apps.
5.    Almost all apps use snap and upload receipts to claim loyalty points; only two malls use the InStore payment system to gather customers purchase info and claim loyalty points.


*Sogo and Aeon are standalone shopping malls like Walmart; their apps are natural extensions from physical stores to online. Therefore, they should be considered different categories and compete more directly with an eCommerce platform.
**VivoCity is a Singapore Mall App just for comparison with Malaysia’s shopping mall apps.

I need to confess here that this is a superficial study on the features that showed in the Apps without detailed examination. Even if two apps have the same features, it doesn’t mean both equally provide full functions and deliver the same experience for users.

Marketing Modules Oriented
We can’t compare mall Apps with the full force eCommerce platforms such as Shopee Malaysia, Android download of 10 mil+, Mudah Malaysia 10 mil+, Shopback 10 mil+, and even Lelong has a 1mil+ downloads. The highest gross of 100K+ in user downloads for Sunway & 1 Utama Apps is just a mere 1% to some e-commerce giants. But like what I mentioned earlier, shopping mall apps have very different objectives; they are not competing with e-Commerce in the same marketplace.

In general, most shopping mall apps got the direction right by not turning themselves to compete with the borderless eCommerce app. Many of them do not even bother to list any products on the apps but perfect their shopper experience through loyalty points, promotion, and reward schemes. The loyalty point is also a system where the malls can collect buyers’ data for further analysis to understand their purchase behaviour better or lure customers to visit its store more often and spend more within its offline and online ecosystem.

But we can’t deny that many shoppers are not keen on the mall’s loyalty points and promotions. For example, the Sunway Pyramid shopping mall is one of the most popular shopping malls in the Klang Valley. It attracts about three million visitors per month but only gets 100K+ installations for its Android app. Therefore, we can conclude that for shoppers to enjoy better promotions and discounts on products, they would instead go to Shopee or Lazada, indulged by their consistently low price and product variety. Hence, shoppers who are not attracted by the bait of loyalty points would not burden their phone with an extra mall app or have an idle app without any actual usage.

Then, what are other attractions to make up a good mall app?

If eCommerce is borderless, reaching out to customers by its online portal and further supported by a robust backend logistic system. Then, the shopping malls and their app should focus more on near field commerce; the logic is that those who stay near the mall will visit the mall more frequently. Instead of marketing to strangers from thousands of miles away which you have difficulty exchanging anything valuable physically, you better get to know more about the neighbours around you. In short, enhancing the tie with the nearby community is relatively more important than taking care of the customers afar. And even if products need to be delivered to the nearby customers, it probably does not involve logistics. Unfortunately, none of the mall apps shows a solid near field commerce element built into their mall apps.

Strengthen Near Field Commerce Concept
Instead of becoming a supplementary general eCommerce platform, the mall app should enhance its Near Field Commerce capability, and this is what I concluded as one of the main objectives for the shopping mall apps. Contrary to the eCommerce of promoting borderless marketing regardless of distance, the Near Field Commerce championing short distance business activities, whereby the shorter, the better. It represents a mix of online and offline operations to connect buyers and sellers within the same geographical concerns. In a standard eCommerce platform, buyers are always treated as separate and simple individuals, while in Near Field Commerce, the community is one of the key considerations. When the community comes into the picture, there is a requirement to link the mall app with the community app. Thus mall app will appear to be part of the community system to achieve better interaction. Integration of a Near Field Commerce platform with a smart community platform is essential at the visitor management system level to facilitate services from the mall’s merchants. Since pre-registering visitors is almost a default built-in feature for a smart community app, the integration will smoothen the delivery process with a simple QR code scan at the guardhouse.

Imagine a physical store in a shopping mall with fewer buyers during weekdays. The merchant receives orders from the nearby residents and delivers the merchandise without hassle to boost sales and compensate for their loss during the slack time. Imagine an exhausted resident coming home from work. Will he/she shop at the nearby shopping mall or shop at the shopping mall app and get their items delivered to their doorstep in the evening? Imagine a resident can pick a few clothes from the app and later deliver and try them in their own house, and just buy the ones that suit them? And how easy and cost-effective to handle the returned merchandise compared with borderless eCommerce? These value-added features to the shopping malls are unachievable for a typical eCommerce platform.

Add More Operation Modules
Most mall apps aim to generate more sales without much success due to the lack of app activities.

 
The stickiness of an app is defined by how often and how long the duration you use the app. If an app is open once a year or once a month, the app is less applicable to the users. Besides marketing modules like loyalty points and promotions, can shopping malls add more operation features into their apps to increase their usefulness? How often does one use the mall App before, during and after the visit to the mall?

I take mall parking as an example. Smart parking is getting more popular nowadays, and it should consider a digital gateway for shopping malls, and integration with its mall app should be one of the essentials. Still, none of the apps efficiently embed this except Sunway’s Pals for Life App move towards this direction. The features can benefit app users in various ways. Before the visit for parking availability, check & book a bay; during the visit for parking discount (promo code) ties up with a purchase, or permanent free parking for premier customers, targeted ads, seamless touchless entry & exit parking lanes and auto-payment capability, EV charging, find my car, security camera surveillance linked to the parked car; and after the visit by printing the parking receipts.

For real estate developers with diverse development projects, the interaction and extension of activities between different user groups within an app are highly recommended. For example, imagine a township built with a mall, office towers, convention halls, hotels, theme parks, medical centre, school, residential and other property types; a super app to serve the community and public would be ideal, where it can contain more operation modules such as security, physical access, automation features to boost the app practicality.

In the digital transformation era, businesses can explore many more. The app journey is just the beginning for malls; watch TimeTec Digital Building Ecosystem and Smart Township Solution for more ideas.
 
 
About Author:
Teh Hon Seng, Group CEO of TimeTec Group of Companies. Prior to forming TimeTec, Teh led PUC Founder (MSC) Bhd to be listed on MESDAQ (ACE) market of Bursa Malaysia in 2002. Teh initiated the R&D in fingerprint technology in 2000, which later developed into a renowned global brand for commercial fingerprint product known as FingerTec. In 2008, he foresaw the trend of cloud computing and mobile technology, and over the years, he had strategically diversified and transformed its biometric-focused products into a suite of cloud solutions that aimed at workforce management and security industries including smart communities and digital building system that centered around the cloud ecosystem. Teh has more than 20 patents to his name, and he is also a columnist in a local newspaper and a writer of several books.

4 comments:

The 7 New Trends of Biometric & Security Industry in Post-Pandemic Era

Wednesday, December 01, 2021 TimeTec 0 Comments


An unprecedented pandemic is a watershed to many industries, including the biometric and security industry. We gathered the foreseeable trends, backed by our sales figures and customer requirements; we could almost confirm the future for the following seven developments:


 
1.    Facial recognition overtaking fingerprint verification
According to BiometricUpdate.com that publishes global market research news for biometrics, global biometrics will grow at a CAGR rate of 10% per year. Face recognition, due to its contactless nature, with a CAGR of approximately 18%, benefited from the pandemic and overtaken fingerprint and other biometric methods as the primary verification method.

Almost all our face recognition models, such as Face ID 2, Face ID X, Face ID 4 and 4D, Face ID 5, showed sales spikes for the past two years, but fingerprint models displayed the opposite. Besides, the face recognition model embedded with body temperature detection module flourished with a high demand for the last two years.

Apparently "go contactless" is becoming a new lifestyle to reduce the chances of Covid infection and better automation in access control activities.  

2. Non-biometric QR codes gradually replace the card system

We have a small device QR 110, and the sales increased by 50%. It is a slave device that allows the reading of QR codes. However, even though the sales surged, it is still unremarkable in its sales amount and profitability. I highlighted this to indicate the emerging trend of using QR codes as a new credential to replace the card system.

A card has a cost, and issuing a card is a tedious process. On the other hand, QR code is more agile, flexible, almost zero cost. It can send information via the Internet to your smartphone and even be read by using another mobile phone or any device with a built-in camera; for example, our Face ID 5 model, with the latest firmware update, can read QR codes as well.

The card is a product that belongs to the Windows era, whereas QR code is a product representing the App-era. If you upgraded your Windows-based software to read QR codes, you shouldn't be proud of that because you are just prolonging your system's doomsday. People prefer QR codes in today's visitor management due to the demand to pre-register visitors, self-generate credentials with timestamp, verify with whatever devices that can read QR codes, and mobility because almost everyone carries a smartphone now.  

3. Demand surged for cloud application

All the time, clocking machines are location-based and mostly placed indoors before the App-era. Suppose the small number of mobile workers like sales and technicians is not the business owner's primary concern. In that case, a Windows-based system is sufficient to support the on-premises clocking activities. Clocking anywhere anytime with a GPS tracking feature built into a time attendance mobile app is a new trend to monitor mobile workers. When companies required a certain large percentage of employees to work from home during the Covid-19 lockdown period, it heightened the need for mobile clocking. Besides, send invitations, pre-register your visitors, and get them to fill up health declaration forms; all these new activities indirectly drive the demand for cloud applications.

We observed a steady growth in demands for our cloud solutions from time attendance, leave management, visitor management, smart parking, smart community system to the smart township. The cloud trend is irreversible even after the pandemic. A hybrid of working environment will be a new trend for more and more corporations. Without cloud applications, no system can fulfil the complex new requirements.


4. A single solution to a complex ecosystem
 

Just like we perceived parking is not a standalone activity, cloud solutions encourage data flow from one activity to another, help to form a more sophisticated ecosystem to benefit a business organization. For example, when we developed Windows-based time attendance software 20 years ago to bundle with FingerTec biometrics hardware, nobody requested us to add a leave management system. But when we started to market our cloud-based time attendance system, we were frequently urged to develop leave management, claim management to a total workforce management system etc. Moreover, when cloud applications are greater in demand after the pandemic, the demand of the ecosystem to connect all the individual cloud applications grows gradually strong as well.  

Apart from HR cloud solutions, for example, when we launched the smart community system iNeighbour for residential properties five years ago, it was already built with ecosystem characteristics. It combined visitor management, billing, facility booking, access control, event management, marketplace, etc., to allow management to run their daily operation on a single platform.
     

5. App-based application

Most of the ancient Windows's systems had limitation to confine to administration purpose only. When the same system taps on cloud technology, it can be extended to include all users. Thanks to the extension of the App application, it further improves the reach and stickiness. For example, staff can check their leave balance or apply their own OT, etc., without the need to trouble any HR personnel because of the App application. The nature of App is self-service, and it is also a zero cost in hardware investment for the company because of the common understanding that the smartphone is a personal device.  

When cloud solutions tend to sprout into a more complex ecosystem, the embedded apps have to combine to become super app that consolidate multiple functionalities in one platform. This trend is inevitable because no users like to install multiple apps, especially when the functions are correlated.

When Covid-19 accelerates the cloud and app trend, it also speeds up the trend towards the super app direction. For example, we have been approached by many township developers for their mixed development projects, interested in white labelling our app on a larger scale to manage multiple types of properties in one platform and one app.


6. Accommodate every scenario and aspect

"User-friendly" is an outdated tech buzzword in the PC era. Now we use "user experience", not a minor upgrade in expectation by one step, but multiple. In the 90s, our system was being used by only a few administrators behind PCs in a closed room. Compared to today, our system is being used by everyone in the organization in all kinds of scenarios, with different roles and requirements, integrated with multiple modules in an ecosystem, so to accommodate all their needs is a real challenge. Imagine if the system is further integrated with the access control devices, smart IoT gadgets etc., the challenge to achieve a good user experience would be double.

But this is the new expectation, and it intensifies in the post-pandemic era. Since we can't reverse the trend; we are obliged to comply with the upcoming.

 
 
 
7. A shift from hardware-oriented (ELV to IoT) to software-oriented

Owing to the digitalization trend, manufacturers of ELV (Extra Low Voltage) devices must evolve to add more IoT (Internet of Things) capabilities, leading to a revamp in ELV products. Besides, IoT products typically shift and depend on a large part 
of their computing power on a cloud server, plus the increased real-time interactive activities between the users and their apps, hence software role becoming more important. As a result, a shift of used-to-be hardware-oriented market to software-oriented in the security industry.

The technology breakthrough is breaking barriers between industries. Thus, one should not confine oneself in their existing industry but step out from the comfort zone, especially in the post-pandemic era, to deliver borderless solutions that suit the customer's requirements. 

We saw a new world that is more ready to tap on virtual resources for better and cost-effective solutions. So, for FingerTec resellers and partners, in addition to putting efforts on promoting Face ID models, we also urge you to direct your attention to TimeTec for dealing with a future that is reshaped by the pandemic.

 
 
 
About Author:
Teh Hon Seng, Group CEO of TimeTec Group of Companies. Prior to forming TimeTec, Teh led PUC Founder (MSC) Bhd to be listed on MESDAQ (ACE) market of Bursa Malaysia in 2002. Teh initiated the R&D in fingerprint technology in 2000, which later developed into a renowned global brand for commercial fingerprint product known as FingerTec. In 2008, he foresaw the trend of cloud computing and mobile technology, and over the years, he had strategically diversified and transformed its biometric-focused products into a suite of cloud solutions that aimed at workforce management and security industries including smart communities and digital building system that centered around the cloud ecosystem. Teh has more than 20 patents to his name, and he is also a columnist in a local newspaper and a writer of several books.

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