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Vadim Kukharchuk
Vadim Kukharchuk

This document discusses Zillow's strategy to transition from a real estate search platform to an iBuying platform operator, noting some challenges it currently faces. It recommends that Zillow focus on becoming an "Amazon of Real Estate" by focusing on customer experience, bringing competitors onto its site, and creating an ecosystem of third-party partners to offer customized real estate products and services at lower costs. This network effects-based approach could allow Zillow to "win" in the iBuying platform space through scale and by completing transactions more seamlessly for customers.

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Zillow 3.0 Amazon of Real Estate? Vadim Kukharchuk 02/03/2020 1
Our market position is under threat Trends - Solution - Success factors Competitive strategy 2 NPS* of customers<0 NPS* of our realtors is twice lower than competitors Our iBuying doesnt grow quicker than Redfins or Opendoors Beta of Zillows stock increased from 1.5 to 2 ROE went from -4% to -9% COVID makes harder to win in real estate Zillow is more susceptible to market risks *Net promoter score=% promoters - % detractors
Lets be winner takes all in iBuying platforms rather than a leader among iBuying players Trends - Solution - Success factors Competitive strategy 3 10% EBIT margin (lossmaking) Sales CAGR 60% Competitors are competitors Product Platform 2% commission (profitmaking) Sales CAGR 100% Competitors are partners Return to direct sales after winning
Winning in platforms is about obsession with c-experience and creating business for partners Trends - Solution - Success factors Competitive strategy 4 More seamless c-journey More services from third party applications Bring competitors to the site Let realtors take leverage for resale Focus on customer experience Become pipeline for others
Zillow can win in platforms because no one tries to complete through network effects Trends - Solution - Success factors Competitive strategy 5 Thousands of iBuying companies of all sizes can participate Mortgage, renovation, insurance, payment processing 3rd party apps allow to create unique, niche products Lower M&S costs and lower complexity for partners Scale Provider ecosystem Product customization Transaction costs
Thank you 02/03/2020 6

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Presentation3.pptx

  • 1. Zillow 3.0 Amazon of Real Estate? Vadim Kukharchuk 02/03/2020 1
  • 2. Our market position is under threat Trends - Solution - Success factors Competitive strategy 2 NPS* of customers<0 NPS* of our realtors is twice lower than competitors Our iBuying doesnt grow quicker than Redfins or Opendoors Beta of Zillows stock increased from 1.5 to 2 ROE went from -4% to -9% COVID makes harder to win in real estate Zillow is more susceptible to market risks *Net promoter score=% promoters - % detractors
  • 3. Lets be winner takes all in iBuying platforms rather than a leader among iBuying players Trends - Solution - Success factors Competitive strategy 3 10% EBIT margin (lossmaking) Sales CAGR 60% Competitors are competitors Product Platform 2% commission (profitmaking) Sales CAGR 100% Competitors are partners Return to direct sales after winning
  • 4. Winning in platforms is about obsession with c-experience and creating business for partners Trends - Solution - Success factors Competitive strategy 4 More seamless c-journey More services from third party applications Bring competitors to the site Let realtors take leverage for resale Focus on customer experience Become pipeline for others
  • 5. Zillow can win in platforms because no one tries to complete through network effects Trends - Solution - Success factors Competitive strategy 5 Thousands of iBuying companies of all sizes can participate Mortgage, renovation, insurance, payment processing 3rd party apps allow to create unique, niche products Lower M&S costs and lower complexity for partners Scale Provider ecosystem Product customization Transaction costs