Ziroom

“Ziroom: Creating Quality Rental Living.”

1. Compared with tangible products, what are the characteristics of services, and what are the challenges presented to marketing management of services?

Beijing has a huge second-hand home rental market, while the tenants cannot get sufficient properties. The main customers mostly university graduates and people who are not able to find an apartment suitable for their needs. Rental business in Beijing mainly operated by real estate companies and they assist with managing procedures. The real estate companies provide intermediary service only and act between tenants and owners.

In May 2011, Homelink established Ziroom, the new innovative service in the rental sector. Later, Ziroom has created Ziroom Friendly Home service that operated in a B2C mode. Ziroom specialized in service, product, and O2O.

Ziroom supplies rental services to 10 million customers with the cumulative occupancy rate at 90%. Ziroom has many advantages such as a new residential environment, the high-speed Wi-Fi, cleaning and housekeeping services, convenient transportation, excellent maintenance service, online payment, but at the same time, it is faced a number of challenges. For example, Ziroom’s rent is relatively high. They also charge 10% annually for the service fee.

Ziroom tried to find a new way that allows developing the new market trend, which includes shared rentals. Therefore, the government made some regulations in which multi people cannot share the rent.

2. Please summarize how Ziroom Friendly Home tackled with the various challenges encountered in marketing management of services.

Due to the increasing population, transactions in Beijing’s residential market rose 13,78% through 2010. Beijing has adapted several policies for shared rentals. In May 2012, the government announced a document, in which landlords are forbidden to individually rent a kitchen, bathroom, balcony or underground storage room for living. Xiong, the Ziroom’s founder and general manager, believed that people, mainly young adults are unable to purchase a property, live with the family members, and they are wishing to live closer to work place, and therefore, the domestic rental market lacked residential properties and apartments that will be suitable for young adults. And he wanted to upgrade and renovate rental properties.

3. Please analyze the sources of Ziroom Friendly Home's service innovations and its revelation to the innovation of service sector.

        Xiong Lin believed that Ziroom broke down the market and categorized it.

Ziroom is not a brokerage agency. They own the properties and sell them online. Using a Ziroom B2C mode allows branding all properties. Ziroom works with property suppliers and designers to make a finished product for sale. Then they provide after-sales services. Ziroom focuses on three important things: products, services and O2O. Ziroom targeted the tremendous amount of vacant apartments. In Beijing, owners have no time to take care of the apartments, which leads to a mismatch of supply and demand in the rental market. Ziroom wants to manage properties by providing long-term services.