When I first joined my former company, I gathered the staffs and told them the story of online companies and why majority of all online companies fail. For any online company at all, the most expensive expenditure is on technology and manpower. Instead of buying materials when there are orders, online companies either break-even within a short period of time or it loses the fight against its huge fixed costs after some time. Speed is vital and thus companies spend a lot on making sure the infrastructure is ready for any sudden surge which may happen. Imagine what will happen if a lot of people wants to engage your services but your server is down 20 times every day? That’s the end of your business, that’s for sure.
Secondly, when we look at the real estate industry, every customer that you engage for the very first time would most probably be already engaging a traditional media and they will ask you to give them free trials. If you do not, they may never know that online works. If you do, they may think that the value is low and will forever push you for heavy discounts. Everyone seemed to have forgotten that even staffs at online companies also have to be paid salaries and have families to feed. Plus, if they use Online, they are saving huge amounts of money compared to traditional media in the long run. Imagine a RM40,000 one day colour advertisement? Well, RM40,000 can get you huge exposure beyond whatever you have every imagined possible. Always understand the value that you are selling.
Below is the latest results of iProperty, after many years of being a publicly listed company. I forwarded the news to my friends and they asked me this interesting question. Since iProperty has a new investor, surely this loss is okay? Well, truth is, new investor is one issue, losing money is another. There’s no such thing as due to new investor, thus losses are okay. In the latest financial result by iProperty Group Ltd, it announced a net loss of more than double that of the same period last year. For the H1 of 2014, its loss was S$8.97 million versus a net loss of A3.33 million in the first half a year ago. According to the company, this loss is expected and is due to the ‘impairments’ from its Singapore and Indonesia investments.
In terms of revenue however, you can say that it showed positive signs. Revenue rose 43 percent to A$11.01 million. Nevertheless, its position in Singapore is a huge cause for concern as it has continue to slip. It trails its main competitor PropertyGuru.com.sg by far. 22nd ranked versus 139. The main improvements for iProperty came from its Malaysian operations, showing a growth of 66% of which a huge portion was due to events. Taking that out, Malaysia grew at 35%. According to its management, the company has now fully impaired its Singapore and Indonesia operations. In fact the “The impairment was an accounting treatment only, and the goodwill was fully impaired as these values were not supported by a discounted cash-flow valuation of the business.”
Let’s see the if H2 of 2014 would be a better one compared to H2 of 2013. Will report on this when I have the news next year.
written on 15 Aug 2014
Next suggested article: News Corp, The Wall Street Journal and iProperty are now related
iProperty, still losing money as at H1 of 2014.
Comments
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Personally, i had a dissatisfy experience with the service, the online advertisement did not turn up to be good due to its posting run into problem, public unable to view my posting, it took very long time until i forget about this service, it was the first and last time to use this service, therefore, it defeat my purpose of registering on this service, it is quite disappointed. my 2 cents
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Oh dear another dissatisfied customer. They better improve their services. This is the only differentiating factor. Or else might as well continue trying traditional media.
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