Interview Synopsis

Zillow Group – 2021 growth prospects

  • Public Equity
  • Consumer
  • North America

The American real-estate market has remained resilient in the face of the COVID-19 pandemic. The CEO of Zillow Group, an online property marketplace, described 2020 as a “rollercoaster”, and was a year in which the company’s revenue increased by 22%. Third Bridge Forum interviewed a former director from Zillow to understand what the future could hold.

A window into America’s online property marketplace landscape

They were first asked about the high-level trends affecting the industry, which includes Zillow rounding out its offerings. “Zillow wants to bring the real-estate transaction to a more digitalised, seamless one-stop-shop experience, hence the Flex partnerships and them actually becoming a brokerage, as well as buying a mortgage company.”

This could become reality within the next five years, but there are some obstacles to overcome first, according to the specialist. To make it work, the company needs to onboard more agents, either in-house or as partners. “Zillow has a massive amount of eyeballs that come to the site, they get a [massive] amount of leads, but there [aren’t] enough quality agents or partners to work with within the majority of markets.”

Looking at how the overall housing market affected Zillow, the former director commented that “throughout my years at Zillow, any trends within the housing markets never really  impacted the Premier Agent business.” They also explored the competition, including Realtor’s evolution as a competitor and Redfin’s comparative strengths and weaknesses.

Evaluating the main threats and opportunities for Zillow, the specialist noted the exodus of senior members over the past year. “There was a lack of internal communications to begin with, and now, with all new faces who don’t really understand the business, let alone the relationships, that’s where Zillow is struggling.” However, they ended on a positive note: “Zillow is just the brand everyone knows and loves because they were the first to do what they did. As long [as] they can keep the quality of the product and the quality of service up to a certain extent, you’re just not going to lose the customer base.”

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