For most businesses in Egypt, Ramadan is a month of low activity and even lower productivity. Working hours are shorter and plans are often put on hold to accommodate employees’ religious traditions.
This year, however, one company decided to buck the trend and turn the month’s logistical inconveniences into strategic opportunity.Through a partnership with online shopping site Souq.com, real estate developer Kuwadico put up for sale online a limited number of housing units in its Grand Heights development, which is still under construction near Sixth of October City.
By placing small down payments on the units, customers participated in the first online real estate transaction of its kind in the Egyptian market. And Kuwadico took advantage of a lull in the purchase of big ticket items in the Egyptian market to experiment with an innovative marketing technique.
In so doing, Kuwadico, a joint business venture between Kuwait’s National Real Estate Company (NREC) and Egypt’s Wadi el Nil Company, established itself as a pioneer in the Egyptian property market, while Dubai-based Souq.com reaffirmed its position as the leading online retailer in the Arab world.
Making the deal
The marketing initiative was conceived several months earlier in a brainstorming session attended by executives of both companies. The idea they settled on was a version of the daily deal model, which was first popularized in Egypt by companies Living Social and DARE’n’DEAL.
Named the Grand Deal, the campaign involved Kuwadico making a finite number of units available for reservation through Souq.com’s online marketplace.
Consumers who took advantage of the limited-time offer would enjoy a 10% discount on the total price.
“Egypt’s e-commerce is growing,” says Karim Moustafa, Kuwadico’s chief commercial officer (CCO), “which means it’s becoming easier to reach consumers and serious buyers as well as information seekers online.”
“We wanted to see if that could apply also to the real estate sector,” he says. “Most people have only been using the internet medium as a brochure with no real call for action specific to the medium. We wanted to experiment with how much further we could take that and see what kind of results were generated.”
To help make consumers comfortable with the idea of buying a house online, Kuwadico began to advertise the deal in advance and gave potential customers the chance to review the terms of the agreement and speak with sales representatives.
The response during that three week pre-deal period was unexpectedly strong. More than 200 million impressions were served on the internet, generating thousands of visits and registrations on Kuwadico’s offer page on Souq.com.
By the time it went live on August 3, the Grand Deal was already a grand success. The sale of all of the units — or, more precisely, the placement of a LE 3,000 deposit on all of the units — within the limited time frame, was an unexpected bonus.
Breaking the internet mold
“We were excited to sell real estate online,” says Omar Soudoudi, general manager of Souq.com in Egypt, in reference to his company’s partnership with Kuwadico.
Since its founding in 2005, the online retailer has developed into a giant, now attracting more than 7.5 million unique visitors each month.Fashioned on the model of Amazon.com, it attained a première position in the Arab world by providing buyers and sellers with a convenient, competitive and safe online shopping experience.
Until recently, Souq.com had focused mainly on small consumer goods and electronics. Then, in May 2011, it launched a classifieds section for real estate and automotives, which garnered a greater than anticipated reception. “It quickly ramped up organically,” says Soudoudi. “It was a nice surprise for us.”
However, as befits a classifieds section, this component of the website merely matches up buyers and sellers while the transactions still take place offline. By contrast, Kuwadico demonstrated an interest in pushing the existing bounds of e-commerce.
“We wanted to test the market, feel the appetite of serious home buyers through the medium of the internet,” says Kuwadico’s Moustafa. “It was more of an experiment than a set strategy.”
Indeed, Kuwadico and Souq.com do not consider the Grand Deal a sales mechanism or a sustainable marketing tool so much as one successful campaign in a broader online marketing strategy.
From the real estate developer’s point of view, awareness was a huge factor. “We gathered a lot of information about who’s interested in us,” says Moustafa.
“Many more people came and saw than bought.” That data will help Kuwadico get an idea of what its customers are looking for, which will come in handy for product development as well as marketing and engagement.
The LE 3,000 deposit on each of the units also allowed Kuwadico to filter serious buyers from non-serious buyers, an invaluable segmentation in any business.
For its part, Souq.com’s Soudoudi acknowledges that the unique characteristics of real estate prevent the website from regularly making offers like the Grand Deal. “Buying a house or a car is a journey,” he says, “which requires you to visit the property, do your homework and compare to other products in the market.”
Nonetheless, Soudoudi was pleased with the Kuwadico campaign, because he believes it represents a step in the right direction for online marketing and e-commerce in Egypt.
“Offline companies that are very traditional in how they choose their mediums of communications and advertising and marketing need to think of online as an online channel,” he says. “That’s the mindset of ‘let’s have a proper online marketing strategy’ as opposed to a one-off campaign.”
Moustafa noted that some of Kuwadico’s customers are investors trying to hedge against the Egyptian pound by investing in real estate, while others are ordinary people seeking to live in a place that is safer, quieter, and cleaner than Cairo proper.
Despite the high demand for housing in Egypt, there is still intense competition between real estate developers to attract both types of customers to new communities like Grand Heights. A solid marketing strategy could make a decisive difference.
“It took a revolution for people to notice that people are online in Egypt,” says Soudoudi. Souq.com and Kuwadico are taking advantage of that change and hoping to attract some attention of their own. bt
A new development of grand proportions
Kuwadico’s Grand Heights is a new gated community currently under construction on approximately 1.2 million square meters of land in Sixth of October City. It is minutes away from the Mall of Arabia, the Smart Village and the Sixth of October Industrial Area.
Grand Heights is perched in a strategically quiet, yet convenient location. To the north is a large swathe of agricultural farmlands owned by Wadi El Nil Company known as the Green Belt, while to the south is the northern expansion of Sixth of October City.
When finished, the entire development will include approximately 2,000 fully-furnished semi-customizable residential units with triple-play connectivity (high-speed Internet, television and telephone) and home automation. The units range from attached row houses that start at LE 1.6 million to five-bedroom villas.
As Business Today went to press, the construction of infrastructure was underway and five mockup units were expected to be ready for sales visits by potential customers sometime in October.
Kuwadico plans to break ground before the end of the year on the first phase of the development, which includes roughly 180 housing units. Those residences will most likely be available to their new owners by 2014. Roughly 500 additional units will be built by 2016.
When completed, Grand Heights is poised to become the closest gated community to Sixth of October City that also offers full services like shops, restaurants, entertainment venues and sports facilities as well as a park, a clubhouse, an international school and hospital. bt