Research On SOHO China's Transformation Of Asset-light Strategy

During the period of high-speed development,the asset-heavy strategy which encourages land acquisition has brought huge benefits to real estate companies.As Chinese real estate industry enters the silver age,high land costs,serious inventory backlogs,and increasing capital pressures have brought cash flow risks to real estate business which operates asset-heavy strategy.Some industry leaders began to switch to asset-light strategy by drawing on mature real estate development experience in the United States and Singapore.Under the asset-light operation model,the operation activities of a single real estate company are concentrated in the superior areas of the industrial chain.The real estate fund,cooperative development,brand service and other methods are used to reduce their own asset-heavy asset ratio.Outsourcing poor-value parts can reduce capital investment.However,due to the differences between domestic and foreign market environments,capital environment,and policy environment,the transformation of the asset-light strategy still faces many problems and risks.Whether the asset-light operation model is suitable for China's real estate industry is still worth exploring.This paper analyzes the development status of the real estate industry in China,summarizes the domestic and foreign research on the causes,risks,strategies,and impacts of asset-light operation models,and sorts out the characteristics and types of domestic and foreign mainstream real estate asset-light operation model.Combining the four elements of Slywotzky's corporate profit model,this paper analyzes the problems in SOHO China's transformation from the four dimensions of customer selection,value acquisition,strategic control and obligation scope,and puts forward targeted suggestions to lighten China's real estate industry.The study found that SOHO China had problems such as scattered customers,relatively simple revenue-based rental channels,debt financing highly dependent on bank loans,and serious homogeneity of products and services.Therefore,this article suggests to build member industry clusters,outsource non-core businesses,adapt new financing methods,and provide differentiated products and services.