Property giant China Vanke has teamed up with e-commerce platform Taobao to offer discounts to homebuyers. The move is the latest attempt by the country's largest developer to lure customers amid a housing slump.
In response to a strained homes market, property heavyweight China Vanke is offering discounts of up to 2 million yuan ($325,000 or 247,000 euros) for homebuyers who spent a similar amount on Alibaba's Taobao, the country's largest e-commerce platform.
Although buying property through online sites isn't new in China, the latest collaboration between Vanke and Alibaba reflects how developers need to become increasingly creative to lure homebuyers.
It also points to the growing role of e-commerce platforms like Taobao in China's economy.
The cross-promotion matches shoppers' spending on Taobao, allowing them to qualify for discounts on select properties in a dozen cities across China, such as Beijing, Shanghai, Guangzhou and Chongqing, according to a report by the Financial Times on Tuesday.
The Taobao offer started Monday and will last through Sept. 30 for 23 Vanke projects.
While few could afford to spend millions on Taobao in a single year, even spending one yuan on Taobao's eBay-like service makes customers eligible for a 50,000 yuan rebate. In less than a day, 140 buyers had already claimed 1 million yuan in discounts using the promotion, according to media reports.
Real estate boom and bubble
Property developers have long facilitated China's real estate boom in cities amid the country's march toward urbanization, accommodating China's growing middle class by constructing high-rise apartment complexes.
But after a housing bubble emerged last year, Beijing attempted to cool the market by limiting speculation through price restrictions, property-purchasing limitations, loan ceilings and housing tax reforms.
In response, Chinese property developers slashed prices on homes. Government statistics reported residential property sales fell 9.4 percent in floor space terms in the first seven months of the year, compared with the same period in 2013.
But China Vanke, the country's largest residential property developer by sales, still managed to turn out a profit of 5.6 percent in the first half of 2014. The developer had doggedly visited the offices of Internet giants to pursue affiliate deals. As the world's 9th most popular Internet site, Taobao became an ideal partner for the property development giant.
Protests over falling prices
Not everyone has been happy with the lower real estate prices, however. The sharp drop had led to an outburst of anger among property owners and even some violent clashes, local Chinese media reports said Tuesday.
In one case, property owners surrounded a Shanghai sales office of Greentown China Holdings to protest the developer's 25 percent cut to prices within a five-day period, said MarketWatch.
The financial information website reported protestors held banners with slogans like "You cheated us!" and "300,000 yuan worth of assets evaporate within five days - years of work in vain!" according to photographs of the demonstration.
The media reports added the price cut was aimed to boost sales and to "cope with competition" from rival China Vanke, a Greentown sales manager said.