Spacious Founder Asif Ghafoor on Building HK’s Best Property Platform
September 14, 2023
Asif Ghafoor began his Hong Kong story in 2007 after a life of study and work in London, graduating from University College London and banking with Goldman Sachs. Upon his arrival in Hong Kong, Asif faced his first challenge when renting his first apartment: how to navigate the city’s thorny rental market.
When an opportunity brought Asif out of banking after a decade working with the global investment bank, the Briton turned his energy to his passion and family business of residential real estate.
In 2014, Asif founded Spacious, Hong Kong’s leading online marketplace for the sale and rental of properties, connecting buyers and agents with customers. Nearing its 10 years in business in Hong Kong, Asif spoke with The Beat Asia about his story of building Hong Kong’s best property platform.
Great to sit down and chat with you, Asif. First off, what convinced you to create Spacious and build Hong Kong’s go-to platform for renting and buying property?
The reason I started [Spacious] is because of the horrible experience I had when I moved to Hong Kong in 2007 from London. Renting platforms that existed at the time were random, and every property you inquired about was either spam or gone instantly from the market.
After four years settling in the city, working with Goldman Sachs after an internal relocation with my job, I found my second apartment. I would return to the same websites I had used when I came and see the same apartments coming up. I thought, there must be a better way to search for apartments in Hong Kong.
How can I ensure that the quality of listings online for apartments is as real as possible? I wanted to build a self-reinforcing system on a platform that incentivises good behaviour, unlike Hong Kong’s other rental websites filled with fake listings.
What made you quit your career in banking and focus your efforts on building Spacious in Hong Kong?
After six years in London, cutting it in the banking sector, and four in Hong Kong, I wanted a change. I've always had an interest in property. My parents worked in the property trade in East London, fixing up and selling houses in the city.
Spacious was founded in 2014. It was a good risk to take. I was not a big spender, and I was not married with kids at the time. The decision made sense. Hong Kong has an average annual share of US$100 billion’s worth of transactions, 25% of the whole market in the United States. It was a no-brainer to take the risk and create the platform.
What is the business model you sought to implement with Spacious in Hong Kong?
Our business is fundamentally about how we can generate more business for agents.
We are bringing together a highly fragmented market, and that’s the value add we provide. If you’re a searcher, you want to go to one place and see everything. Before, that wasn’t possible. You need to go to 500 websites and travel to real estate agents on the streets.
Our objective was to centralise the search. If I am an agent, I want to put my property on the place with the highest number of searches. I don’t want to share my property in 50 different places.
Agents are our core business. What we're trying to do is create a standard toolkit, which is sold millions of times. They're paying us fundamentally for customer acquisition. Agents justify using our platform, because it would cost them a lot to create their own platform and toolkit.
How did you and your team grow Spacious from its humble beginnings to leading the market today?
We began on a local market in the first version, focusing on Mid-Levels. We wanted to become the number one property aggregator for the Mid-Levels. We connected with all the agents on Bonham, Caine, Peel, Robinson, and Conduit Road and got the word out about Spacious.
Next step was to repeat our attack on a local scale and spread ourselves to Kennedy Town, Sheung Wan, Central. Beyond Central and Western and Southern districts, we went to Eastern [district], Tsim Sha Tsui, Kowloon, and then New Territories.
Building a marketplace business to reach a great scale is much more valuable than the technology itself. People only moved to Instagram from Facebook because all their friends moved there. To convince someone to use a platform, you need to replicate the tech functionality and simultaneously convince your friends to switch to your platform.
Our competitors have come and gone since 2014. We have made sure our cost of search acquisition is suitable by attracting agents to return to the platform, and renters to know us [as] the central location for renting in Hong Kong.
On the flip side, with property purchases in Hong Kong, how does your approach to Spacious differ in attracting people to your platform, rather than renting properties?
The sales cycle for property and rentals can be very different. Rental can range from two to four years before it’s put on the market again. A sale of a property can be 10 years, but for an agent selling a property, it’s like winning the lottery. They make one or two percent commission on a seven- or eight-figure property.
The fundamental thing for what both renting and selling have in common is a need for market research. We want to know about the customers behaviour on Google and on our site, to understand user patterns and provide them the content best fitting them.
Why is there a need to capture the markets of mainland China and Taiwan at Spacious?
We've got presence [in Taipei and Shanghai], but they are still our growth markets. In the U.K., the U.S., Australia, Canada, New Zealand, South Asia, you have many developers who want to sell their properties to Chinese. The footprint they care about is Greater China.
That's another revenue stream for Hong Kong, and Hong Kong is the key part of that business. Fifty-percent of property purchases in Greater China from global buyers happen through Hong Kong.
In this decade, the Greater Bay Area, cities of Shenzhen, Guangzhou, Macau, Zhongshan, Zhuhai, is going to be major for Spacious. We've connected with agents from Mainland China who are working with us to connect Hong Kongers with renters across the border.
How do we become the number one platform for the Bay Area? Out of all the different business areas available in the GBA, I think property will integrate first. And there is our opportunity.
If you’re interested in renting or purchasing a property in Hong Kong, head to Spacious’ website to browse their online platform.
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