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Vanke and Homelink sign deal on new partnership company

By Zhao Xuejie and Hu Yuanyuan (chinadaily.com.cn) Updated: 2015-08-24 19:38

China's largest residential property developer is looking to expand into the home decoration market. On Monday, real estate giant Vanke announced its plan to establish a 60/40 joint venture with the country’s top real estate agency, Homelink.

The two powerhouses will together establish a business-to-consumer home decor company called ‘Vanke Lianjia’. Vanke’s vice president, Liu Xiao, was appointed president of the new company.

"Vanke Lianjia will operate independently from Vanke or Lianjia," said Zuo Hui, chairman of Lianjjia.

Zuo said they will continue supporting the new company. Vanke holds 60 percent shares of the new company while Lianjia takes the remaining 40 percent.

The new company’s first product will be introduced in October along with its experience center. But Liu says he’s going to avoid speeding up the process and instead let the company grow at a steady pace.

"By the end of this year, we will keep our monthly number fewer than 500 (business deals)," said Liu. "We can do more than that, but we want to show that quality is the priority."

"According to this rate, the monthly volume of trade will be about 400 million to 500 million yuan," said Liu

Internet is playing an increasingly significant role in the decoration industry. Decoration companies have jumped on the internet bandwagon hoping to boost their sales. They’ve lowered the price online to attract more customers. Vanke and Lianjia recognize the importance of the Internet, but they say it’s the offline service that really matters.

"We are very interested in the online concept. However, we realize that we always have to treasure the offline resources," said Liu.

"Even with the online concept, I think our priority remains home decoration, not the internet," said Zuo.

Liu said the current decoration industry is poor in quality, trust, and service. It is also filled with safety issues. He said with a combined effort, Vanke Lianjia vows to provide quality service at a reasonable price.

Both companies have had a role in the decoration industry. Vanke entered the industry in 2007 on a business-to-business basis. Its annual turnover on decoration is about 20 billion yuan.

"Our cooperation is an integration of platforms," said Liu. "Vanke is strong in first-hand real estate property sales while Lianjia in second-hand ones. Vanke has the advantage in production and Lianjia excels in communication."

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