Business Models Innovation Research In Real Estate Back-end Market

Since the welfare housing allocation institution was abolished in 1998,the real estate industry has developed rapidly.With increasing contributions to overall economic growth,the industry has been the pillar underpinning the national economy.In a general perspective of developers,the housing market can be simply divided as front-end market and back-end market.In the traditional real estate development-sales of business model,the real estate business profit margins gradually decline.Specifically speaking,the main reason is too difficult to buy a land,and the cost of development is too high;secondly,the source of income and profit is too single;thirdly,the traditional model is greatly affected by the policy;fourthly,the competition is fierce,and the incremental housing market is getting smaller and smaller.The above reasons cause the traditional business model not to improve the real estate business in terms of profitability.The real estate enterprises can only expand the scale in the overall value of the overall profit,but cannot get more profit sources in the front-end market any more.Enterprises should integrate relevant resources,provide services,design and generate additional business models and tap new profits to satisfy the tremendous market demands with house and residence as the core and tertiary industry as the lead,which is of raising significance for the companies and industry to accomplish comprehensive transformation and obtain new revenue sources.The front-end market mainly refers to the market with development and marketing as the core.The business model of the front-end market focuses on traditional sales.The developers start from land acquisition and terminate with house delivery,with sales of the houses as the major revenue source.While the business model of the back-end market put priority on the property owners,with all segmented areas serving the owners including housing renovation,decoration,leasing and property management.Theories about the business models mainly involve the Nine Elements from Alexander Osterwalder,a Swiss business theorist,and the Six Elements from Wei Wei and Zhu Wuxiang,two Chinese scholars,both elaborating the business models from different perspectives.Osterwalder divides the business models into nine elements by combining the operational activities of enterprises in the market,including value proposition,customer segmentation,channels,customer relationships,key abilities,key resources,key partnerships,cost structure,and revenue streams.While the Six Elements put forward by We Wei and Zhu Wuxiang contain corporate positioning,business systems,key resources and abilities,profit models,free cash flow structures and corporate values.The implementation of innovation on business models relies deeply on the analysis and restructure of value chains inside new business models.In the traditional value chain of development and marketing,Vanke Group disassembles and restructures the renovation and decoration process.By cooperating with Lianjia Group,Vanke Group,together with Lianjia Group,has established Vanlian Company,an official signal of marching in the renovation and decoration industry.It forms a new business model in the regard and takes control of the core process of the value chain,including product innovation,supply chain management,customer channels and construction regulations.It only took Vanlian less than two years to be the leading figure in the renovation and decoration industry in Beijing.Taking Vanlian as a case study and centering on the business model and its innovation 11 in back-end market of real estate industry from the perspective of developers,this paper applies the Nine Elements Theory and Business Model Canvas to analyze the elements of the business model,and utilizes the value chain theory to decipher the path and method of the restructure of Vanlian's new value chain.Extending from the case study,this paper sums up the advantages and background of Vanke to extend the decoration business in the real estate back-end market.The advantages include capitals,acquisition of customer,core resources,product ability,brand-building,and after-sales services.The background and opportunities embrace enormous market capacity,shortage of unicorn companies,uneven product,service qualities and stable initial customer sources.From the case of analysis and summary,this paper put forward the point of view that the real estate back-end market for business model innovation must be highly specific with the developer's own advantages.The paper further proposes five innovative directions for the business models innovation of real-estate enterprises in the back-end market: the enterprises should segment the market with self-strengths,integrate the customer channels of second-hand residential property trading agents and property management service industry,provide customized services to meet personalized and specific needs,target customer access as early as in field marketing,and keep up with the tide of Internet era plus brick-and-mortar retailers.To conclude,from the perspective of developers,the thesis expounds and studies the new business models and value chains of representative developers,in the hope of offering feasible advices for the extension of real-estate enterprises in the back-end market.