A Qualitative Study of E-Business Adoption in the Real Estate Sector in China
Open Journal of Social Sciences, 2014, 2, 64-69
Published Online March 2014 in SciRes. http://www.scirp.org/journal/jss
http://dx.doi.org/10.4236/jss.2014.23012
How to cite this paper: Sun, Y. and Ifeanyi, O. (2014) A Qualitative Study of E-Business Adoption in the Real Estate Sector in
China. Open Journal of Social Sciences, 2, 64-69. http://dx.doi.org/10.4236/jss.2014.23012
A Qualitative Study of E-Business Adoption
in the Real Estate Sector in China
Yan Sun, Okwenna Ifeanyi
International Business School, Xi’an Jiaotong Liverpool University, Suzhou, China
Email: yan.sun@xjtlu.edu.cn
Received Oc tob er 2013
Abstract
The purpose of this qualitative study is to investigate e-bu siness adoption into real estate agencies
in China. This research focuses on the advantages and disadvantages of IT/IS (Information Tech-
nology/Information Systems) integration through face to face interviews with property agency
managers in Suzhou. Particularly, it looks into the real estate sector in China today and provides
implications to improve service quality and stay competitive within local real estate agencies in
Suzhou, China. The objective of this study is to show that e-business if properly deployed can im-
prove the service quality and increase general performance of real estate agencies in China; also,
to propose a few implications to bring to light the problems faced by real estate agents currently
in China today.
Keywords
Real Es ta te; Websit es; Age nts; Search Engine Optimization; Personal Profil e; Ch ina
1. Introduction
The adoption of e-business in many industries has been seen to improve efficiency and productivity. However,
“The benefits that the Internet is expected to deliver will not be realized unless a company adapts its organiza-
tional structure and methods to meet the radical new ways of working that this new technology makes possible”
[1]. In other words, it is also noted that there are some negative aspects associated with IT/IS integration such as
downsizing of jobs, data corruption and information security, etc.
In the case of the real estate industry, whi ch provides a specific service of bringing property buyers and sellers
together relies heavily on information. According to [2], the real estate brokerage business is a traditional ser-
vice agency that conveys market information for facilitating trading of properties.
China, the biggest emerging market worldwide, has been showing dramatic increase in property price in re-
cent decades. According to the National Bureau of Statistics of China (2013), the total amount of real estate in-
vestment reached 667.0 billion RMB (up by 22.8 percent), of which the investment in residential buildings was
458.3 billion RMB (up by 23.4 percent) in the first quarter. With a big population and massive market, the
workload of real estate agencies which still follow the traditional face-to-face service pattern has become
enormously challenging.
Y. Sun, O. If eanyi
65
Furthermore, it is interesting and important to study the adoption of e-busine ss and find out the impact of
IT/IS in the real estate sector in China today. Contributions are made to improve service quality/business per-
formance and understand customers perception/market potentials in the Chinese context.
2. Literature Review
Suggested by [3], the internet provides a wide coverage to reach potential clients and plays a crucial role in suc-
cessful business operation. Furthermore, e-business can create new business strategies that exploit higher level
of interactivity between clients and suppliers while increasing opportunities for uniting business and market
logics and also reduce production cost [4].
Reference [5] stated that e-business has the potential of generating new wealth while [6] stated that the advent
of internet has brought about an enhanced revenue generation and improved performance for large and small
business firms around the world.
Another benefit of e-busi ne ss adoption was explained by [7] who describes the business benefits in relation to
the extent of organization change and sophistication when a company uses e-business. In particular, [2] also
stated that the internet has the ability to change a business operating model efficiently, enhances product quality,
expands the market and provides more opportunities.
Studies by [1] [8] indicate that information systems have the ability to significantly affect the quality of in-
formation technology strategy implementation and companies have to be continuously restructured and reorga-
nized to understand how to effectively manage change both internally and externally.
After considering the benefits of e-business, it is important to look at problems that caused by e-busi ness, for
instance the cost of setting up a website and system maintenance expense which varies depending on the cha-
racteristics of industries and business models. Despite the fact that e-busi ne ss can improve business performance,
it is also essential to evaluate how it has performed over time, also more important is to know how it can be im-
proved upon and one of the ways this can be done is by periodic evaluation.
Anothe r issue is security, [9] stated that the growth of e-business can be hindered by the increasing wave of
cybercrimes and sensitive information would be at the risk if companies do not take reasonable actions to protect
data [10].
Learnt from previous studies, information is particularly important for a real estate firm, therefore when firms
attempt to integrate e-b usi ne ss with their operations, proper attention should be given to the acquisition and
management of information. Furthermore, real estate managers in China today recognize the need to provide
better service to stay competitive among a large number of competitors.
As stated earlier, the real estate industry in China has been on an upward trend and this has led to an increase
in the number of real estate agents throughout the country. A study by [11] shows that an estate agency is essen-
tially an information based intermediary role that connects buyers and sellers of property. A similar view shared
by [2], that the internet provides an opportunity for real estate agents to make a difference in their practice that
would give them an edge over their competitors.
With the flexibility of e-busi n ess technology, companies have the ability to expand their services to include
more options available to the visitors of their website [12] [13]. At the same time, China has become the largest
internet market in the world and the amount of internet users reached 68 million already [14]. Hence, Chinese
firms will be presented with the opportunity to adopt the e-busine ss practice [12]-[14].
This study is to propose business implications that can be used to extend the services of real estate agents that
use e-busi ness and suggestions will be made as follows: website optimization, priority query and personality
profile.
3. Methodology
Face to face interview was applied in this qualitative study and a list of real estate agencies was randomly se-
lected using the local business directory in Suzhou, China. Inquiry was made by telephone or in person to make
sure that all the participants have been working in the real estate industry for about five years and are willing to
participate in this study anonymously.
With the background research, it suggested that most real-estate agencies are starting to opt for e -business. In
other words, they are switching to the internet gradually although their business/service focus on brick-and -
mortar. Also, it is found that real estate agencies adopted various approaches in relation to e-business. Accor-
Y. Sun, O. If eanyi
66
dingly, all the participants were categorized into two groups: e-platform service users and website owners.
Participants that were engaged with this study have branches in major cities in China and they need to provide
the necessary information about the activities of their agents across the country. Furthermore, these agencies
serve domestic customers and international clients using both English and Chinese.
Ten agency managers were interviewed and each session took around one hour. The purpose is to find out
how the e-busine ss system has helped to improve their services/business performance and find out disadvantag-
es/limits of e-b usi ne ss adoption in the real estate industry in Suzhou China via interview questions as follows:
1. Why they decided to use e-bu si ne ss?
2. What impact it has on their business in terms of creating awareness and profitability?
3. What problems that they experienced while using e-business?
4. What improvements can be made to enhance the performance of their websites?
5. Do they have concerns regarding e-business adoption?
6. What is their perception of e-busi nes s?
4. Interviews Results Analysis
As explained in the previous section, interview results are discussed from two aspects in relation to participant
group and discussed in details as follows.
4.1. Interview GroupPlatform Service Users
Learnt from the observation, 8 out of 10 real estate agencies currently use the platform services provided by
professional IT companies to publish property information. Agencies pay a small amount of service charge
mont hl y/annually to use platform service to advertise their properties and release contact details. The service
charge is considerably lower than setting up a new company website independently according to observations.
Advantages of platform service usage are summarized as follows:
1. Easy to use: One of the reasons why agents choose this platform is because they are not responsible for de-
signing and maintaining the website. In addition, these websites have simplified the process of posting prop-
erty listings making it easy for an average savvy internet user to be able to utilize their services which in-
clude uploading pictures and contact details.
2. Awareness and Exposure: agents are also convinced that these websites give exposure and awareness of their
services because websites like 58.com can be said to be a one stop website for a myriad of products and ser-
vices such as real estate, vehicle trading, education and training, match making, electronics, flight tickets etc.
As a result, a lot of log on to this website and other similar websites to find goods and services. Therefore,
agents are convinced that this platform can display their properties to a large population.
3. Post listings on different platforms: since agents are not restricted to posting their properties on one website,
they can choose as many of these websites as possible to advertise their services. According to the agents,
this will give them more exposure and reach a larger population.
4. Convenient for few listings: most of the agents that use these websites have few property listings and in their
opinion, it will be convenient because setting up a website with just a few listings is not cost effective. It is
also important to note that occasionally, these agents may not have any available property as a result they can
choose these websites whenever they have listings.
The disadvantages of using these websites as stated by the agents are not significant. Agencies seem to be sa-
tisfied with the platform service citing the fact that they have been using this system for several years. But it is
noted that these websites/platforms are designed and operated in Mandarin only and language option is not
available so far.
Inevitably, agencies find that it is difficult to serve international clients via e-platform and based on informa-
tion online. Learnt from interviews, most international clients they have served are recommended by domestic
customers directly via telephone and branch visit. In other words, the increase of international clients is built on
WOM (word of mouth) among domestic customers.
Additionally, several agencies showed their interests in building an independent website in the near future in
order to improve their business image and keep competitive advantages in the market.
In addition, some users of these websites complain about some dubious activities that a few sellers are in-
volved in.
Y. Sun, O. If eanyi
67
4.2. Interview GroupWebsite Owners
The second phase of the interview was aimed at real estate agents with company websites. 5 of 20 managers
were interviewed and these companies are based in Suzhou but with branches nationwide. When asked about
their decision to deploy the services of an e-business system, their responses were similar citing the notion that
e-business provides a wide coverage to reach potential clients and this further supports the statements by [3].
In addition, they can modify their website to have multiple languages in order to reach more clients such as
foreigners. Of course, availability and convenience, particular 24/7 customer interface have been mentioned
again and again during the interviews.
When asked about the impact e-business has had on their business in terms of creating awareness and profita-
bility, the agents all agree that the scope of their customer number has increased dramatically including foreign-
ers and also some corporations.
In the issue of problems they faced, they complained about search engine page results and concerned about
less high rankings when potential clients use search engines such as Google or Baidu for property listings.
Also, the cost of building an independent website has been raised from time to time. Besides, the website
building, maintenance cost and administrative workload are two other big concerns. Outsourcing becomes a po-
tential solution which would efficiently reduce labour cost and workload for agencies that have independent
website but agencies are worried about data security and customer information protection. Generally speaking,
real estate agencies are responsible for data / information security for both property sellers and buyers.
The next question was about the possible improvements that can be made to enhance the performance of
websit es.
4.3. Proposed Solutions for Real Estate Agencies
4.3.1. Website Optimizatio n
A Search engine is designed to locate information at users’ request and this technique is based on keyword
matches and occurrence which can lead to keyword spamming [15] [16]. Therefore, optimizing a website is im-
portant in the integration of e-business because it is general practice for people to surf the web through search
engines and yet most businesses do not have any strategy of obtaining a high ranking through search engines [17]
[18].
It is important to realize that some people who search for information are mainly concerned with the results
displayed on the first page of the search results bar. Reference [19] stated that online users tend to trust and fol-
low links that are displayed on a search engine results page. Agencies need to take necessary steps to get a high
ranking on search engines by including relevant keywords that users are likely to type when searching for their
websit es.
4.3.2. Personal Profile
Reference [20] states that clients have relationships with service providers and these relationships can be simple
or complex depending on the kind of service that is being rendered. This gives rise to service personalization
which can be defined as the creation or adjustment of a service that would fit the individual requirements of a
customer.
In a service business, particularly real estate industry, gaining the trust and loyalty of clients is crucial to stay
ahead in the market. Although the real estate industry has been booming in recent decades in China, there are
many players and the competition is fierce as always. In addition, since real estate as stated earlier is based on
information, a particular house listing can be acquired by more than one agency which makes the competition
even fiercer.
Studies have shown that people are characterized by stable individual differences in their overall levels of be-
haviour. Individuals need to be treated as separate entities while understanding their needs and preferences in
order to offer them maximum satisfaction rather than generalizing the firms’ services and trying to accommo-
date all customers.
Creating a profile in this case will involve a list of simple basic questions that the clients would have to an-
swe r. These questions will be used to create a list of preferences for future use. For instance, the questions
showed as follows attracted agencies’ interests greatly:
1. Proximity to a certain type of Location/area or facilities, e.g. School district, Business District or natural sur-
Y. Sun, O. If eanyi
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roundings (lake view). Citing the interview with real estate agents, some clients insist on houses that are
close to a particular location, for example, students prefer accommodations near campus and some business
executives choose houses close to commercial centrals.
2. Lease duration preference, e.g. some landlords prefer tenants to make a long term commitment to short term
leases because they think that long-term tenants tend to maintain apartments more carefully. Another reason
from a landlords’ aspect is that long-term contract is to secure a steady source of income efficiently. On the
other hand, other landlords are in the habit of changing rent prices according to market demand. If the de-
mand for apartments becomes high, these landlords tend to increase the rent immediately and they opt for
short term leases in order to capitalize on the market trend.
After a careful inspection of real estate websites in Suzhou, it was observed that recommendations come as a
form of feedback which can take days instead of real time service. This suggests that the personal profile func-
tion is not integrated into the website design in the first place. Otherwise, service results/relevant listings would
be generated in real time using customers’ registration information.
4.3.3. Priority Option
After inspection of real estate websites in China, priority to the search criteria is not generally supported. For
example, if a customer is searching for an apartment using an online service, the results displayed will be sorted
randomly which is not helpful and attractive to consumers. As seen in many search results, there are a lot of ir-
relevant results displayed as search results, and this is caused by the result selection process which is unknown
to the user in some cases.
It would be challenging and expensive for real estate agencies to develop algorithms for search engines and
database. A clever tip which would be able to help a great deal is called the function of sorting. Various criteria
can be chosen by customers to modify searching lists and create more accurate results.
5. Discussion
With a rapidly growing real estate sector in Suzhou, it is necessary for real estate agents to step up the level of
their services to face challenges raised in the current competition and by new market entries (international cor-
porations). The integration of e-business has been approved as an efficient approach to enhance revenue genera-
tion [6].
Although many agents in Suzhou have employed the use of e-business by using platform service and websites
to enhance their performance, very few agencies could be able to understand e-business process professionally
and works out relevant solutions in relation to problems confronted. More specifically, agencies need to en-
hance the functionalities of their e-service which is targeted in this study.
One main focus of any website design is to work compatible with search engines--the need for search engine
optimization. In other words, agencies need to ensure that their websites are fully optimized in order to get high
page ranking. Continuing in this view, web designers need to know some keywords that potential clients are
going to type in search engines to produce of their search. Therefore combining the rules of search engine to
gain high page ranking and inserting these keywords in a website, a firm can have an edge over its rivals in the
area of search engine optimization.
Another aspect comes from personalization in this study, which involved a simple registration process by the
user and also two items were suggested on the list of questions (Proximity and Minimum Duration). Interviews
with real estate agents revealed that some apartment listings are available for a specified period hence customers
should be made aware of this information as quickly as possible. The result of this personalization will be dis-
played as a form of recommendations which is common to online shopping websites.
The third enhancement is an option that would give the users the chance to sort their results on a real estate
website to conform to their preferences. Whereby the search results provided by the real estate website is nu-
merous, users can spend a couple of minutes to re-sort the original list and find the ideal apartment that fit in
their preference better.
6. Conclusion and Further Research
The real estate sector in China is developing at a rapid rate, and as a result, there is an increase in competition
among real estate agents and in order to be successful, these agents need to improve their services. Integrating
Y. Sun, O. If eanyi
69
e-business in any business can improve the services and increase revenue, although there are different levels of
integration. To be able to have a competitive advantage, agents need to take a step further by enhancing their
services to customers in order to gain customer loyalty. These enhancements include Search Engine Optimiza-
tion, Personalization and Priority Option.
Future research would start studying individual customers who are using relevant service and functions. It
wo u ld make a complete picture with stories from customers’ side of real estate sector in China today.
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