Doing business in Thailand and Thailand’s online real estate market insights from Thailand-property.com’s Ben Neve & Neil Sutton
Ben Neve – Thailand-Property’s Founder
Online real estate seems to be a considerable niche in Southeast Asia, where most of the billionaires are somewhat related to real estate. Thailand is not an exception. So I decided to learn more about this field via a player in town Thailand-Property.com. This website is published by Digital Property Group (Thailand). and managed by the founders of Smart Traffic, one of the largest SEO companies in Australia, and the UK. Ben Neve – Founder & Neil Sutton – Managing Director of the online real estate site have accumulated something while doing business in Thailand. And they’re openly to share about their deep experience of more than 10 years doing business in Thailand. In my opinion, it is really worth to learn.
What is your approach on doing business in Thailand
Getting started: We first needed to make sure we understood the Asia market. You always have to do your research to understand the market you are targeting. We spent 46 months doing research before even making a decision. We did cold calling and with that we faced the challenge of hearing potential clients saying “people have tried this and failed,” while staying confident that our research and background would allow us to go beyond our predecessors who tried to do a national project of this scale and failed.
Hiring: We know the skill set is here in Thai, but on a management level we need to hire Thais who speak English. We want to break down the wall between English and Thai workers. We’ve hired our Thai staff mostly through word of mouth, as Thais like to work with friends.
As far as the skill set for foreigners, this is more difficult to staff. Generally they want western wages and may only stay in Thailand for a year. This is a challenge because with a site like Thailand-Property you need to be in Thailand; it’s the nature of the business.
Important things to keep in mind: Deadlines may be taken with a lesser sense of urgency here than in Western cultures; being aware of differences in the Thai legal system when running a business is important and can be a challenge, as well as being aware of certain cultural differences and taboos. When translating the website, we had to do it all manually (no Google Translate) because we don’t want our site to just translate the words; we want to translate the concept in a way that both cultures and languages connect with.
Gaining market share: We know we have market share on the English language. The next challenge is to gain market share for Thai, but we are still going through some growing pains of understanding the Asian market. In order to understand the Thai market, we have to have dedicated employees, so we have to double up on all internal resources. For example, we need to have English and Thai marketing people to understand both markets, and different sales teams.
Cultural differences between Eastern and Western online markets (the Thai style website v. English style, etc.)?
What works online in Asia doesn’t work for Western cultures and vice versa. Thai sites love displaying a lot of information right up front. You’ll see homepages filled with advertisements, colors and different fonts. In Western cultures, this is overwhelming and lacks design and professionalism. Thai’s however may find a streamlined/clean-design site to be boring and lackluster.We made a decision to make two standalone sites. Thais don’t want to buy off of foreign agents and vice versa. Thai site is built for only Thai users so there’s no crossover between properties.
Can you share some insights on the real estate market in Thailand?
Several markets are doing extremely well, especially with foreign investors. Thailand is developing rapidly in markets such as Pattaya, Hua Hin and areas outside of Bangkok. Recently, with the depreciation of the Thai baht, buyers have been buying bigger and more luxurious properties as they can get more for their money and foreign investors are moving in in droves. Recently in the news, Japan’s largest property developer announced it would be focusing on Thailand this year.
One interesting thing about real estate for foreigners is that they can only purchase 49% of any property or land; otherwise they’ll need a Thai cosigner/spouse. This makes condo sales the easiest thing for foreigners to invest in, as they can purchase an entire unit so long as 49% of the building is sold to Thais. For luxury condos in Thailand, Thai people do in fact buy out the other 51% but hardly any of them rent them out so these condos go unoccupied for years.
What is Thailand-property.com business modelBangkok today – condos is the easiest thing for foreigners to invest in
The site is funded by a subscription model, where our agents pay us a monthly fee to list their properties… about 90% of our agents pay for unlimited listings and 10% pay for a capped amount. We started with just advertising revenue, as we were offering free listings for the first six months. In October we started charging for subscriptions and are gradually increasing that fee as we grow. This is typically met with little resistance as our agents recognize the value they are getting.
Any insights or statistics about house/land buying behaviors of Thai or expats?
Not necessarily statistics but due to the nature of our business, it has become increasingly evident to us that Thai agents prefer to work exclusively with Thai speakers, and English agents with English speakers. It is for this reason that our business is basically divided into two companies; the English and the Thai.
Expats, nationwide, who are using the site more often than not are searching for either a second home or a retirement home. Many Thais based in Bangkok may use the site for a second home as well, however Thais around the rest of the country use the site to find their primary living space.
How can you promote your real estate website?
Our marketing angle is to be as dynamic as possible. As we are an online business with a background in digital marketing, we have a strong focus on pay per click ads and display campaigns, but we are doing more than that. We have recently started working on PR and are now looking into expanding into offline marketing. We want to appeal to our agents who may be more traditional in what they want for marketing, so we are working on launching a free English language magazine that we will distribute in expat hotspots in Bangkok and eventually all over Thailand. Hopefully billboards and other forms of out of home advertising. We want to get creative with it.
We are working on reaching out to the right people, magazine and online editors such as yourself to try to get others to shout about us. We are constantly building our site content as well as our lifestyle content and industry news to make us not only more relevant but interesting to visitors. We are promoting the site not only as a place to buy, rent and sell properties but as a resource for all things real estate and expat-related.
Our aim is to be the place for anything property related in Thailand, providing information and resources for buying and selling, working out finances and mortgages, home inspections, etc.
Note:Thailand-Property.com also launched a digital news publication, providing a new place for interested readers and site users to find daily updated information on Thailand’s real estate market. It recently provides a mobile website to enhance users’ experience.
How founder’s SEO background has helped Thailand-Property hit the ground running?
Our background in online marketing (from SmartTraffic) is what helped inspire the business. We saw a gap in the English speaking market for property search in Thailand and were confident that we could fill it using online marketing. We recognized from the start that we would need to cater to the Thai market, knowing that 90-95% of the user base and traffic will be Thai. But since we are an English company we started by creating the English site first to the best of our ability. This separates us from the competition as we are now the largest English language real estate site in Thailand.
Differences, challenges between English and Asian language SEO
There is a bigger percentage of people using mobile and social media as opposed to search engines. We are in the process of launching a mobile site but focusing on getting the Thai side launched first.Remember to use the Thai’s ways when you’re in Thai market
How to do B2B sales?
For sales, we were only cold calling at first, which is still continuing but since we began the paid membership plan (October 1) we’ve started getting inbound calls from agents seeking to list with us, which was all from word of mouth. We now have 130 members, which makes us the real estate site with the highest number of paying agents in Thailand.
With the recent launch of the Thai site, we have also just hired several people to fill up our Thai sales team.
We try to promote our agents in as many ways as possible as well by pitching their properties to publications.
The markets are in many different cities so: does Thailand-Property have office in other areas and how to get a transaction between Thailand-Property and agent done?
Currently we are only have a physical location and employees in Thailand, however we do have plans to expand into other markets in the future. The logistics of this though have yet to be sorted.
Any possibility to use CPA model to collect fee from agents so they will pay commission for Thailand-Property when a customer buy a house/condo via Thailand-Property recommendation like what the offline world works?
We don’t work on a commission basis to keep the business simple and streamlined. Since we deal with agents and properties all over the country, managing transactions and commissions would be too complicated. Our business model is based off of bringing more agents and more quality listing on our site, as well as advertisers interested in
a highly-trafficked site.
What is the most challenging thing of Thailand-Property and how to handle it?
The language barrier is by far the most challenging aspect, as it affects all parts of the business. From translating web content, to efficiently delegating tasks, to having friendly inner-office banter. The best way to handle is to 1) try to hire bilingual Thais, because many Thais feel uncomfortable working in an environment they can’t fluidly communicate. Thais like to work with friends so having them recruit for the company may lead to a slower turn-over rate… and 2) practice patience, respect and remember that you are working within their country and culture.