After operating in Mexico and Colombia, the startup Alo Home, focused on digitizing new housing real estate projects, will be active in Brazil starting next August, hand in hand with a local developer with whom they signed a collaboration agreement.
For Eduardo Orozco, co-founder and CEO of the platform, this action sets a precedent for the Mexican industry because while between Mexico, Colombia, and Chile, there are about 350 real estate technology companies (proptech), in Brazil alone, there are more than 1,000 firms.
According to the co-founder of Alo Home, although it has been favorable for foreign proptech platforms to enter the Mexican market, due to the compactness of operations in the three main cities (Mexico City, Monterrey, and Guadalajara), Mexican firms also have the potential to permeate the region.
In addition, this action comes in line with the increase in digital demand from the pandemic and the different processes that the real estate sector demands.
“We find that less than 1% of developers and real estate projects have online transactional tools,” the CEO detailed.
“You can find a developer’s website, but the only thing you can do as a buyer is to leave your details so that someone from the sales team can look you up.”
Thus, in a scenario where almost 99% of the industry is “disconnected” and with a complex economic context due to rising interest rates and inflation, housing developers will have to apply new sales strategies, Orozco noted.
According to Alo Home, the opportunity for digitalization in the real estate segment is due to:
- 95% of homebuyers search for a property online.
- 60% only look for properties on the Internet.
- 53% of customers would buy and pay for a home digitally.
In just over a year of operation, Alo Home has registered more than 300 homes sold and expects to reach 800 units in the three countries where it operates by the end of 2022.
THE CHALLENGE OF SURVIVAL
For Orozco, although there is still room for the emergence of more proptech companies in Mexico and the industry, the challenge will be to identify which ones will have long-term operations and which ones will not manage to consolidate.
“The complex thing is to see a parade of startups and not know who is who; it is a strong challenge for users,” commented Orozco.
However, the reality is that the real estate market still has opportunities for companies in charge of digital processes.
“I think what is going to happen is that we are going to start merging to offer a complete platform because that is one of the challenges,” he anticipated.
“It is a large sector that generates a lot of economic activity and is finally starting to digitize.”
Orozco pointed out that in the case of Alo Home, which works directly with developers and home sales groups, the goal is to finalize transactions through a platform.
“We are bringing e-commerce to the real estate sector, which has historically not had much technology”.
According to the executive, the urgency of this migration is due to the increased demand for digital purchases by potential homebuyers, who are in the demographic bonus of each country they serve.
Therefore, he considered that more companies would demand this type of service. “When the developer does not generate this digital trust, you as a client are a bit distrustful,” he warned.
With information from El Economista