In order to succeed, OnTheMarket will need to have at least the same number of listings as Zoopla.
And there is a warning that Zoopla could go “direct to the seller”.
The huge scale of the challenge facing the new portal has been emphasised in a blog by guru Simon Baker –who was at one time in charge of the UK portal that has since morphed into Zoopla through various acquisitions and the adoption of its all-important branding.
Baker, looking at both OnTheMarket and its Australian challenger equivalent Squiiz, concludes that neither will succeed.
He said OnTheMarket is unlikely to make much of a dent in Zoopla’s traffic – although conceding that Zoopla’s content could dwindle.
Baker’s blog talks only about challenger portals in relation to the number two portals, not the number one sites – in Australia, Domain and in the UK, Rightmove. Dislodging a number two site will be very difficult, he says.
Baker said: “Success needs to be more than just forcing the market leaders to drop their prices.
“These two new sites … need to operate profitably (or at least at a break-even level) and they must deliver results for their end customer –not the agent, but the home seller and the landlord.
“What we know is that in a mature market (such as Australia and the UK), you need to be the leader or in #2 place to operate either profitably or break even (and deliver results).
“In short, Squiiz needs to knock off Domain and OnTheMarket needs to knock off Zoopla. Can they do it?”
Baker continues: “When consumers visit a property portal, first and foremost they want to see listings.
“For either OnTheMarket or Squiiz to perform better than Zoopla and Domain, they will need to have at least the same amount of content as these two sites. Without having this same level of content, the consumer will simply look at other sites to get a full view of the market.
“OnTheMarket is taking the aggressive approach of requiring its members to only have one of Zoopla or Rightmove as a second site. Most agents are likely to select Rightmove and therefore Zoopla is likely to have a drop in content.
“Of course, Zoopla is not going to lie down and take this without a fight. It is likely that they will increase their marketing efforts and target home sellers with a message about “you are not on Zoopla and you are missing out on quality buyers for your house”.
“They may even take the hyper aggressive approach, as we did in Australia in 2002/3, and write directly to the home sellers encouraging them to talk to their agents to put their listings on the Zoopla site.
“In some cases, Zoopla could even go direct to the home seller –clearly not what the industry wants.”
It’s interesting stuff, here