Following China’s economic development, many Chinese entrepreneurs were able to take advantage of China’s digitalization in terms of industry and attractivity worldwide. On the other hand, thanks to the importance of education and work in China, many families are now part of China’s middle class or even upper class, thus benefiting from a growing purchasing power. With more assets, an increasing number of people are now investing in the real estate industry, both in China and worldwide. But, you might be wondering how to sell real estate properties to Chinese investors? In fact, there’s no secret: you will have to adapt to Chinese investors in order to do business with them. In this article, we are going to give you some tips and advice to sell your real estate properties to Chinese investors.
China: An emergent country
These last decades, China’s industrial and economic development was considered unpredictable, becoming the second-largest economy in the world after the U.S. China was able to shift from an industrial economy to innovations-related industries using new technologies. It has become a tremendous opportunity for many entrepreneurs and companies to do business in China and grow their assets.
The real estate industry in China
The real estate sector in China is a key part of China’s economy. Due to the gradual market opening and government stimulations of the housing sector over the last decades, investments in real estate properties have experienced a long-lasting boom. In 2019, the total sales of the real estate market reached almost 16 trillion yuan and accounted for nearly 10% of China’s GDP.
China and its growing number of millionaires (and billionaires)
One major reason for this phenomenon is the growing number of millionaires and billionaires in China. According to Credit Suisse’s estimations, there were 4.4 million dollar millionaires in China, ranking second after the United States. Although China’s economy was heavily affected by the trade war with the United States, the number of millionaires still increased by 158,000 compared to 2018, reaching 1.58 million millionaires as of 2020 who had personal wealth of over 10 million yuan in China. Most of them are from the biggest cities in China. For example, Hong Kong is among the regions with the highest number of millionaires (in terms of density) in the world.
As you can see, the number of Chinese millionaires kept increasing over the years, even though it decreased from 2018 to 2019. However, it is expected to skyrocket by the end of 2021, as the Chinese economy is now flourishing again after the Covid-19 pandemic.
Chinese investors’ love for real estate properties
In recent years, China has seen tremendous volatility in overseas property investment. In a country with a population of 1.3 billion citizens, its GDP grew by about 7% and the potential market of overseas real estate investors in China is boundless. Investors are looking for better opportunities in terms of environment, work, immigrant investment, and educational opportunities. On top of that, as real estate prices are soaring in China, Chinese investors are now looking for better opportunities all over the world to acquire a real estate property in another country.
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Moreover, the real estate industry was boosted by China’s rapid globalization and development. Chinese companies’ foreign investment has maintained rapid growth during the last decade, reaching its peak with over 196 billion-dollar outflows in 2016, and decreasing during the Covid-19 pandemic. As a matter of fact, China is still one of the world’s major foreign investors, ranking just after the United States.
Growing Investment Into Foreign Real Estate
Overseas investments were a way for China to not just bolster its own economy, but also leverage its economic strength to increase its influence abroad. It was highly encouraged by Beijing’s “Going Out” strategy and the Belt and Road Initiative, which purpose was to encourage investment in foreign markets, as well as investing in real estate.
Preferred Investment locations
Even after some commercial issues, the US is still one of the major destinations for Chinese investors. In 2018, Chinese buyers accounted for roughly 25% of total foreign investment in U.S. residential real estate. Chinese residential real-estate investments are highly focused on the Pacific Coast, and nearly 40% of Chinese buyers have already purchased in California.
However, Chinese investors are shifting toward alternative countries like Singapore, Portugal, Australia, and Britain amid concerns about tense trade relations.
The United States: The most popular destination for Chinese investors
The United States is still China’s largest real estate investor, but it is also the most popular destination for Chinese investors, accounting for 29% of total U.S. real estate investment. The east-west coast is often the most popular area, and New York is currently at the top of the list.
However, it’s not only Chinese investors that are buying real estate properties, but also Chinese companies that are investing in overseas offices. In general, overseas investment returns are better than investing in China.
Australia: A promising market for Chinese investors
Due to its geographical position, lifestyle, popularity, tourism, and weather, Chinese investors are particularly shifting their investments towards Australia’s real estate industry.
In 2019, China was the leading country in terms of investment in Australia’s real estate industry. If we look a the graphic, we can see that China Merchant Group’s investment in Propertylink (an Australian company) amounted to 280 million Australian dollars. The industrial property was located in Sydney, along with most other leading real estate investment transactions in that year.
OFDI (Outbound Foreign Direct Investment)
As the Chinese strategy for international expansion is developing, China’s outward foreign direct investment (OFDI) increased dramatically with Chinese enterprises’ growth, with an outward direct investment of 158.29 billion USD as of 2016. China’s outward investment continues to play an important role in the global FDI market, ranking third behind the US and Japan in terms of investment flows.
Investment into overseas residential or commercial real estate has hit a record of $33 billion in 2017. Chinese investors do realize that investment into bricks-and-mortar properties is the best way to take advantage of their assets, particularly in well-developped countries.
When it comes to residential developments this is not surprising that with rising standards of living, priorities around education and lifestyle have become the main factor of acquisition for Chinese investors.
Some tips and advice to sell real estate properties to Chinese investors
First of all, you should take into account Chinese investors’ state of mind. Focus more on promoting real estate properties that have integrated innovations and new technologies. In order to really start selling real estate to China, it is important to have a very thorough understanding of buyers’ purchasing habits. Gaining insight from what they are looking for across various marketing platforms used throughout China can be very helpful for you. The most important thing to know is that China’s secret is its “digitalization”. With an investment of 900 million U.S dollars and an Internet penetration rate of 70%, the entire investment ecosystem has been focusing on online platforms and tools.
Reach out to China’s Real Estate Investors: Online Leads/prospect Generation
China now boasts a 70% internet penetration rate with over 940 million Chinese users connected online. There are approximately 350 million ‘middle-upper class’ individuals active online in China every day. So, if you want to reach China’s middle and upper class, you will need to develop a comprehensive digital strategy. Why? Because the Chinese market is unique & has its own internet websites, e-commerce platforms, and social media.
Adapt to the Chinese market
In China the answer for lead generation is digital, this is one of the most online-centric environments in the globe and investment is no exception. You have to know that Chinese people are on average spending 1.5 hours per day browsing for information. Moreover, as a tech-savvy population, the younger generation is constantly using social media and sharing content with their friends and peers.
Promote your real estate agency online
As you have probably understood, promoting your real estate agency online is mandatory if you want to attract Chinese investors. But, how to do it?
Create a Chinese website
Having a Chinese website should be at the core of your digital strategy. You have to know that the majority of the Chinese population is not fluent in English, so if you don’t have a website written in simplified Chinese, they won’t even look at it. Moreover, this is also an important key for your ranking on the search engine Baidu. No matter how strong your reputation is in the United States, remember that when your company enters China, you are essentially invisible. All your positive reviews are inaccessible due to “great firewall”.
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Therefore, building a good Chinese website is very important, so that potential investors can understand your company’s situation and the type of property you provide. If you can, you can also try to optimize your website not only for computer users but also for smartphone users (most of the Chinese population is now using their smartphones for online research).
You should also include backlinks to your website to increase website traffic and your rankings in search results. Keep in mind that some overseas investors may not have the chance to see the property they are investing in. Therefore, it is crucial to provide a wide range of asset profiles with very concise details, so investors can better understand what they are getting. Video is another great way to see what you’re providing and generate high-quality video from the properties of your video. Videos, images, and your website should all be well translated into mobile form, and most Chinese use their mobile phone for all their web research. The above-suggested content can be sent directly to investors via IM on a WeChat account.
To sell Your properties to Chinese Investors: Focus on Baidu
After creating a Chinese website, you need to start to increase your visibility. As the most popular search engine in China by far and the 5th most consulted website in the world, Baidu is simply a step you can’t skip in China if you want to sell real estate. You have to know that 75% of all property and investment research is carried out via Baidu. In order to master Baidu, you will need first to optimize your website for it to be ranked on the first results of Baidu. Moreover, you can also display and advertise your company as Baidu is like an open window on the internet. Statistics show that if you do not appear on the first search page, you may lose 65% of your potential internet traffic.
Therefore, it is strongly recommended to do search engine optimization in order to rank on the home page. Find the right keywords in order to be ranked higher on Baidu. This Chinese website will be your “storefront desk” in China, and PPC is also a great way of complementing the ongoing search engine optimization of real estate companies. This will keep you in the top spot for paid results, while real estate will still provide a good ROI. The combination of these two approaches works best for PPC and was initially more important when you entered the market, and SEO became more viable after months of activity.
- Some tips for Baidu
Your website will have to be optimized & audited on the ‘back end’ (meta tags/descriptions/titles, etc) for a most effective SEO (Search Engine Optimization).
In order rank on Baidu, follow these tips:
- 8-10 pages
- Keyword repetition in line with selected keywords
- A static site, i.e avoid video’s and complex graphics
- Internal links to other relevant pages
- Clear and interesting content
- You can also put your Wechat QR Code on your website
If you want more information about Baidu, you can check our complete guide on Baidu SEO. Also, if you have more inquiries or questions, do not hesitate to contact us.
Social media to promote your Real Estate agency in China
As the most popular social media application in China, WeChat is a must-have if you want to conquer the Chinese market. Thus, it is mandatory to become familiar with the internal operation of WeChat and its promotion methods. By setting an official WeChat account, your audience will have more direct contact information. It will also allow potential investors to see your company’s updates, pictures of your properties on your WeChat moments, etc.
For example, any new properties you’ll have can be shared on your official account so that your followers can see them instantly, without going on your website. WeChat is also the best way to establish a relationship with Chinese investors. WeChat is the first step toward conversion. Almost every website in China is accessible via QR code, so include your QR code on your WeChat account so that potential investors can directly follow your offical account.
Lead generation: Contact form
The two main ways to take advantage of your website is to use a ‘lead generation form’, in China it is also advisable to embed QR code links to drive traffic directly to your WeChat account as an additional method of contact.
You can also note the benefit of the ‘Baidu Live Chat’ Tool. This allows you to make contact while investors browse your content, portfolio, etc. Rich in content equals longer time spent browsing and the greater the likelihood of contact via live chat tools.
The importance of e-reputation in China
Even though your company is already well established in your country, Chinese consumers are still going to be cautious. In fact, you will have to take care of your online reputation and use digital tools to increase your visibility, promote your company and gain their trust. China news sources such as Sohu and Fung Fung are the places where investors can browse for information. If you are not active on Chinese social media and have not yet created Chinese content, you won’t be able to reach Chinese potential clients. So, if you want more information about e-reputation in China, do not hesitate to contact us directly.
We help you with selling real estate properties to Chinese investors
As specialists in the Chinese market with almost 10 years of experience, we basically know all the strategies in order to succeed in China. Over the years, we were able to enhance our services and strategies in the Chinese market. We have had several experiences in the real estate industry, as well as many successful collaborations. However, all companies are different and require a specific approach. So, do not hesitate to contact us so that we can discuss your projects to give you the solutions that you will need.