Sina science and technology news on July 24 evening news, Beijing time on the evening of July 24, Shell Group officially submitted IPO documents to the US Securities Regulatory Commission, the stock code is BEKE. Underwriters include Goldman Sachs, Morgan Stanley, Huaxing capital, etc. According to the prospectus, Shell Group owns shell and chain family platforms. In 2019, Shell Group’s total real estate and leasing transactions (GTV) will reach 2.1 trillion. In terms of transaction volume and trading volume, Shell Group is the largest residential service platform in China and the first share of domestic residential service platform.

we founded our company with the belief that we can change China’s housing transaction and service industry by improving the quality and efficiency of service providers and enhancing the customer experience. We pursue our mission with an exciting and long-term vision by leveraging our people, data insight, technology and platforms.

shell is the leading online and offline integrated platform for housing transaction and service. We are a pioneer in building industry infrastructure and standards in China, aiming to reshape the way service providers and housing customers can effectively lead and improve housing transactions, ranging from existing and new home sales, housing leasing to housing renovation, real estate financial solutions and other services. We believe that our active engagement with online and offline platform participants enables us to better understand and serve them.

according to the CIC report, in 2019, we created a total transaction volume (GTV) of RMB 2.128 trillion (about US $300.5 billion), and promoted more than 2.2 million housing transactions on our platform, making us the largest housing transaction and service platform in China and the second largest business platform in all industries. As of 2020, we have more than 26000 real estate agents in China, with more than 26000 real estate agents in the economic center of China.

we own and operate China’s leading real estate brokerage brand “linkhome”, which is also an integral part of our shell platform. We believe that the success and proven track record of chainers pave the way for us to build industry infrastructure and standards, and promote the rapid and sustainable growth of shells.

since its establishment in 2001, we have more than 18 years of operation experience through linkhome. Such extensive industry experience provides us with unique insights into the market, business conditions and customer needs, which we believe are essential for us to provide effective and practical solutions.

according to the report of CIC, the scale of China’s housing market will reach 22.3 trillion yuan in 2019, and it is expected to grow to 30.7 trillion yuan by 2024, with a compound annual growth rate of 6.6%. Despite the size of the market, the housing trading and services industry has been struggling with inefficiency.

in China, it is common for home sellers to contact multiple brokerage stores and agents because there is no industry framework for exclusive participation. On the other hand, buyers have to deal with many brokerage stores and agents in the decision-making process. In the absence of economic benefit protection mechanism, brokerage stores and agents are not willing to share information and resources.

with the passage of time, vicious competition in information isolation and customer acquisition has become common in the industry. In addition, due to historical disrespect for the profession of housing brokers, the industry lacks experience and professional brokers. These challenges hinder service efficiency and lead to a lack of trust among housing customers.

we believe that the key to solving these industry challenges lies in the ability to build an industry wide infrastructure to fundamentally resolve fundamental conflicts within the industry. To this end, we introduced the agent collaboration network (ACN) as the operating system supporting our infrastructure to redefine the relationship between industry participants.

we believe that ACN is similar to the “multiple listing service” (MLS) in the United States from the very beginning. Through more than 18 years of development in chain and shell, ACN has surpassed MLS and enabled us to cultivate a culture of transparency, cooperation and shared success.

ACN is transforming China’s housing transaction and service industry through the following three innovations: (I) promoting information and resource sharing among service providers to dismantle the wall between isolated information islands; (II) assigning the cooperative role of agents to achieve cross store and cross brand collaboration; (II) creating a professional network to enable agents, stores, brands and other services to improve Suppliers establish contact and participation on the platform.

1) in order to effectively encourage agents to share information and resources, ACN redefines the relationship between industry participants by promoting “clearly defined” and “role-specific” collaboration. With effective governance mechanism, agents respect and actively abide by our ACN rules, and release real estate information on our platform without hesitation. ACN also stipulates various roles of agents in housing transactions, which creates more opportunities for agents to participate in transactions and earn distribution Commission, improves transaction efficiency, shortens the period of potential customer conversion, and improves agent retention rate.

2) since 2008, we have invested a lot of resources to build and enrich our housing dictionary, which contains real and unique real estate lists. According to the CIC report, as of June 30, 2020, our property dictionary covers about 226 million housing units, which is the most comprehensive housing database in China.

3) for more than ten years, we have made great efforts in data (including data of real estate, housing customers and intermediaries), transaction process and service quality, and implemented a series of digitization and standardization work.

4) we are also committed to investment agency to improve the service quality of this industry. Chain home has made unremitting efforts in recruiting agents with college degree, and has fulfilled multiple service commitments for our customers.

because agents, or landlords and tenants, who serve buyers and sellers, are linked through our ACN under the same agreement and rules, these housing customers in different locations can be effectively matched through the joint efforts promoted by ACN.

as we scale up, we see network effects that improve efficiency, attract more participants to our ACN network, and enable us to capture more transactions and greater revenue growth opportunities. After the ACN prototype was first created in Beijing and became a leading local brand, chain experts also extended the power of ACN to the first and second tier cities in China, such as Shanghai, and gained a leading position in the local market.

we believe that many industries in China have the same characteristics: (1) the industry is complex, the value chain is long, and the infrastructure is weak; (2) the service efficiency and experience of customers and service providers are low; and (3) the market scale is large but still growing rapidly. Industry participants are often tempted by “huge” short-term opportunities, thus ignoring the long-term benefits of improving service efficiency and customer experience.

we have our own unique corporate culture. We firmly choose to do the “right” things rather than the “fast track” ones, because we believe in long-term benefits rather than shortcuts to quick success. We understand that doing the “right” is challenging in itself, because in the long run, we need to spend time reforming the industry’s infrastructure, improving service efficiency and the consumer experience before we can create greater value for shareholders. We believe that the only way to success must be based on doing the right thing, even if it is difficult for us. The most difficult thing, of course, is that doing the “right” is often accompanied by a short-term sacrifice of economic benefits before long-term growth and greater results are achieved. We believe that although our team has encountered many obstacles in the so-called “investment phase without economic returns”, the early challenges still pave the way for long-term success. Over the years, we have developed a large management team that firmly supports this core concept, and we are proud of this. Over and over again, our team has gone through those difficult “no return investment phases,” but these moments have ultimately led to long-term growth and a positive customer experience. We firmly believe that by doing the right thing, we can achieve long-term success.

in the coming IPO, we especially hope to share with investors our firm belief that we will do the right thing for the long-term success in the future. While we are confident in the company’s recent financial performance, we have invested more efforts in developing and investing in the company’s long-term strengths, even though these investments may take a long time to see a return. But the fact is that the longer the time, the more difficult it is, the more excited we are.

we believe that our data insight and technology are our core strengths. We collate and leverage a large amount of unique data from our years of online and offline operations on the platform, which gives us unparalleled insight into the entire value chain of housing transactions and services.

we further use our massive data to run our proprietary algorithms to optimize products and solutions, guide efficient operations, and develop local market insight for service providers on our platform. We also improve customer experience and service efficiency through new technologies such as virtual reality (VR), artificial intelligence (AI), big data and the Internet of things, and create and develop real use cases and applications that benefit all platform participants.

for example, we use big data and artificial intelligence algorithms to analyze transaction and behavior data, recommend high-quality housing sources that are more likely to sell successfully, so as to collect more high-quality data, so as to further improve the accuracy of our recommendation and accelerate the transaction cycle. We have also collected activity data of agents and established various data models for agents to improve the conversion efficiency of potential customers of agents

our revenue mainly comes from the handling fees and commissions of housing transactions and services. We have experienced substantial growth since we started operations and our management team has a good track record in implementing our strategy. Our revenue increased by 60.6% from RMB 28.6 billion in 2018 to RMB 46 billion (US $6.5 billion) in 2019. In the first quarter of 2020 as of March 31, our revenue was 7.1 billion yuan, down 12.7% from 8.2 billion yuan in the same period last year, mainly due to the decline in demand for housing transactions caused by the epidemic.

according to CIC’s report, China has the world’s largest housing market based on GTV and the volume of existing and new housing sales and housing rental in 2019. After a period of obvious growth, the market is expected to enter the era of stable growth. The CIC report also shows that the existing housing market will become more important, with a compound annual growth rate of 12.4%, from RMB 8.4 trillion in 2019 to RMB 15.1 trillion in 2024. [8