A new player in the Canberra property market has emerged with the launch of Zango, a real estate portal developed in collaboration with local agents, including Peter Blackshaw, the founder of AllHomes.com.au. The group of agents behind Zango are looking to create a locally-owned platform that will compete with national companies in the area.
Zango is well-funded and plans to spend heavily on advertising, setting the stage for a shake-up in the competitive landscape of the Canberra property market. Unlike its competitors, Zango will work closely with local agents and businesses, and its ownership will be entirely based in Canberra.
Zango aims to target all major players in the real estate industry, from buyers and sellers to renters and landlords, providing rich and informative property content. With its unique point-of-difference and backing from successful local network groups, Zango is poised to make a significant impact in the Canberra property market.
Brief History
The real estate portal market in Canberra has always been highly competitive, with three key competitors unlike most other markets in the country. Allhomes.com.au has been the market leader in Canberra, followed by Realestate.com.au and Domain.com.au.
In 2014, Fairfax/Domain acquired Allhomes for $50 million from Peter Blackshaw and associates. This strategic move enabled Domain to gain significant market share by combining the audiences on both Allhomes and Domain. Before this acquisition, a cooperative comprising of at least 50% of the agents in the ACT had successfully launched a competing portal to Allhomes called GetRealty.
GetRealty’s goal was to put a stop to the continuous price hikes that AllHomes.com.au had been imposing on Canberra Agents. GetRealty was an instant success, forcing AllHomes.com.au to spend hundreds of thousands of dollars each month on marketing campaigns to retain its market share. In less than a year after its launch, Allhomes.com.au decided it was easier to acquire GetRealty than to compete with it.
The success of both Allhomes and GetRealty in Canberra demonstrates that a new portal entrant into the market can have a significant impact.
Factors that makes Canberra a Competitive Portal Market
Canberra stands out as one of the markets where a new competitor can easily gain traction due to various factors. However, three main points can be attributed to this phenomenon.
Geographic area – The ACT’s relatively small size means that running a comprehensive marketing campaign to reach a wide audience requires significantly less funds than would be necessary in larger markets such as Sydney or the entire country of Australia.
Relatively small amount of real estate offices – Canberra has less than 200 real estate agencies, compared to over 8000 throughout Australia. Therefore, it requires much less effort to persuade a reasonable number of them to join a new portal than it would in a larger market.
Hyper local strategy – Canberra residents take great pride in supporting their local community, and Zango has adopted a hyper-local approach that resonates with them. Zango has followed in the footsteps of GetRealty by partnering with real estate agents as equity partners, which has proven successful for Domain in the past with their CommercialRealEstate.com.au and Domain.com.au platforms. By offering agents equity in exchange for their commitment to advertising and listing spends, Domain has demonstrated the effectiveness of this approach. Zango is confident that its strategy will also be well-received by the Canberra community.
Domain’s Response
Shortly after Zango’s launch, Domain Group took legal action by filing an injunction in the Federal Court. The injunction requested that Zango stop using various marketing statements. Zango’s CEO, Ian Keogh, stated in an interview with the AFR that the company is actively removing these statements from their marketing materials while awaiting guidance from the Australian Competition and Consumer Commission (ACCC).
Zango’s decision to include the disputed statements in their marketing campaign could prove costly. It has been reported that Zango had already prepared outdoor advertising, including on over 30 buses in the ACT, featuring these statements.
What’s Next
The release of Zango and the reaction from Domain Group are just the start of the story. Another online platform is slated to launch in the Australian Capital Territory (ACT), and the potential involvement of Antony Catalano adds to the intrigue. Catalano, the former CEO of Domain, acquired Nine’s Australian Community Media and printing division for $115 million in April 2019, which included the Canberra Times, the ACT’s primary newspaper. The pressing question is whether Catalano’s consortium will introduce a new online portal in the ACT in 2020.
THE FINAL WORD
Over the next year, the Canberra market will experience significant changes as new players enter the arena and invest large amounts of capital to attract consumer attention. Initially, the advertising industry will be the primary beneficiary of this competition. However, if Zango can successfully reduce advertising costs for Allhomes.com.au, both agents and vendors may reap long-term benefits.
