May 8, 2023, /South China Morning Post/ - ByteDance, the tech unicorn behind global hit short video app TikTok and its Chinese sibling Douyin, has disposed of its bricks-and-mortar real estate agency, taking a step back from China’s property industry amid continued weakness in the country’s housing market.
Fujian Haofang Youxing Information Technology Co – a ByteDance subsidiary that operates roughly 200 offline brokerages in Fuzhou, capital of southeastern Fujian province – has been sold for an undisclosed amount to Fuqing Wumai Corporate Management Co, a unit of major Chinese real estate services provider Maitian, according to a change of the company’s registry in late April tracked by business data provider Qichacha.
At the same time, the legal representative of Fujian Haofang, Wang Fengkun, who is also the tech director of ByteDance’s advertising platform, was replaced by Liu Chenglin, a Maitian manager in Fuzhou.
Following those moves, ByteDance over the weekend acquired for an undisclosed sum a 7.5 per cent stake in Maitian’s main entity Maitian Holding (Beijing) Co, according to company registry records.
The disposal of Fujian Haofang, however, is not expected to diminish ByteDance’s ties with China’s property market even while sharpening its “focus on its main business”, according to a representative of the Beijing-based tech giant’s real estate unit Xingfuli.
The unit will “further focus on online operations to provide better services for property traders and agents by making the best of the traffic and resources of Douyin and Jinri Toutiao”, the representative said, referring to ByteDance’s Chinese-language short video app and popular news platform.
The collaboration between ByteDance and Maitian in the real estate sector will see the tech unicorn handle online promotion, while the other will be responsible for offline initiatives, according to the representative.
Maitian did not immediately reply to a request for comment on Monday.
ByteDance’s decision to sell its real estate subsidiary underscores the firm’s continued reorganisation efforts, which include laying off hundreds of employees, reducing frequency of employee reviews and the appointment of a new leader at Douyin.
In December, ByteDance co-founder, chairman and chief executive Liang Rubo told employees that the company needed to “get fit”, as it streamlines operations.
ByteDance initially ran its real estate unit in 2018 under the Xingfuli brand, which grew from a channel that provided property information on news aggregator Jinri Toutiao. Xingfuli opened its first offline agency, Xiaomai Property, in May last year.
Internet entrepreneur Zhang Yiming, the founder and former chief executive of ByteDance, is no stranger to China’s property market. The last venture that Zhang established, before co-founding ByteDance with Liang in 2012, was real estate website 99fang.com in 2009.
ByteDance’s move to step back from China’s property market comes at a time when the industry remains in recovery mode after Beijing initiated a slew of measures to bail out the sector.
Those included scrapping restrictions on home purchases in some cities, cutting mortgage rates and facilitating funding access to ease the liquidity squeeze on developers.
China’s property market, one of the country’s most important sectors, has been rattled by slumping home prices, weak sales and a crippling debt crisis among major developers.
Beijing is likely to keep rolling out incentives to support the country’s property sector as April’s home sales look set to tank, according to analysts cited in a South China Morning Post report on May 2.
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