- POSTED: 26 Aug 2014 23:19
Indian e-commerce site Snapdeal said on Tuesday (Aug 26) it would sell real-estate online, partnering with the Tataconglomerate to supply "affordable housing" in what it says is the first such venture in the country.
NEW DELHI: Indian e-commerce site Snapdeal said on Tuesday (Aug 26) it would sell real-estate online, partnering with the Tataconglomerate to supply "affordable housing" in what it says is the first such venture in the country.
E-Bay-backed Snapdeal and Tata Value Homes, part of the tea-to-steelTata Group, will initially offer 1,000 units in seven projects spread over five cities - Mumbai, Bangalore, Chennai, Pune and Ahmedabad.
Average costs for the apartments will range from 3.1 million rupees (S$64,000) to 7.0 million rupees (S$145,000), targeting India's burgeoning and increasingly affluent middle-class. The prices are still considered moderate as real estate prices have been soaring in Indian cities. Purchasers will be able to reserve apartments for a non-refundable down payment of 30,000 rupees.
"We've changed the way consumers shop (through e-commerce). Now we intend to change the way they buy their homes," said Snapdeal founder Kunal Bahl. "This is the first time an e-commerce site has got real estate as one of its categories in India," Bahl told reporters.
Buying real estate in India is fraught with red-tape, concerns about building standards, authenticity of title deeds and other headaches. "We'll take the worry out of this," Bahl said.
Snapdeal, whose other investors include Singapore's investment company Temasek and asset management firm BlackRock, calls itself India's largest online marketplace with five million products in 500 categories.
Tata Value Homes, set up three years ago, is one of India's fastest-growing real estate developers. "We strongly believe India is ready to buy homes online," said Brotin Banerjee chief executive of Tata Value Homes.
India suffers from an acute housing shortage with some 19 million families lacking homes, according a 2012 housing ministry report.
India's leading e-retail sites, Flipkart, Snapdeal and Amazon, are battling to build up scale, adding warehouses, improving delivery times and widening product range, as Internet use soars in the country.
Last month, Amazon, the world's largest online retailer, said it would invest US$2 billion (S$2.5 billion) in its Indian operations, a day after rival Flipkart got US$1 billion in investor loans.
India's online retail industry, valued at US$1 billion just two years ago, is expected to hit US$32 billion in sales in 2020, according to retail consultancy Technopak. New Delhi-based Snapdeal, which has annual sales of US$1 billion, has raised US$350 million since its founding in 2010.
Bahl said he already had "money sitting in the bank", dismissing media speculation he might want to raise more funds, though he said an initial public offer might be an option later.