Yahoo Finance Chinese Expats Looking for Safety, Luxury Apartments Turn to Ehomie
(Bloomberg) -- After viewing 40 apartments online and touring 10 in person in the spring, Sicheng Wan finally decided on a $3,000-a-month one-bedroom in a luxury building in Jersey City, N.J., a one-transfer commute from his graduate studies at Columbia. The rental platform the Chinese expatriate used: Ehomie.
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By offering an all-in-one internet service, Ehomie New York Inc. is like a combination of StreetEasy, Zillow, and Facebook Marketplace for Chinese renters, using an embedded application in the social media app WeChat and a separate brokerage service on its website. The company targets overseas Chinese students and new graduates looking to rent, sublet, or co-sign an apartment, as well as sell and buy second-hand furniture in 16 cities across North America, the UK, and Australia.
“We’re creating a community for overseas Chinese students,” says Ehomie’s founder, Felix Gui, during a tour of the company’s Times Square headquarters. Gui started Ehomie with $100,000 of his own money in 2016 and says it now brings in $5 million a year in revenue, with an average annual growth rate of 30%. The 100-person company sees up to 3,000 daily active users on its WeChat platform, and the brokerage service closes about 100 to 300 rental deals per month, Gui estimates.
Yet Ehomie’s future could be in jeopardy, as the US loses its allure for Chinese students because of Covid-19 travel restrictions and geopolitical spats between the US and China. In the first six months of 2022, the US issued 31,055 F-1 visas to Chinese nationals, down from 64,261 for the same period in 2019, according to data from the US State Department, reported by the Wall Street Journal.
“Compared to last year, we do see fewer Chinese students coming to the US,” Gui says, noting foreign students are an essential part of the company’s business strategy. “So while trying to do well on our existing business on the one hand, we’re developing new services.”
Ehomie now consults 500 to 1,500 customers monthly on buying real estate and plans to enter the communal living space, renting a collection of apartments and subletting the fully furnished rooms to short-term renters.
It’s also attempting to become a concierge of sorts of Chinese-speaking households. Under the name Shi Yi Da Dao, which translates to “ 11th Avenue,” Ehomie offerings include installing dividers for flex bedrooms, selling new furniture in sets, cleaning services, airport pickups and drop-offs, and international shipping between China and the US. “From a marketing standpoint, we want the 11th Ave. to be independent,” says Gui, so that even its competitors can refer clients to it.
These services are an essential pivot to garner repeat business, especially as Ehomie’s WeChat integration has proven to be a branding success but revenue failure.
If you click open Ehomie application on WeChat and set your location to New York, the company’s biggest market, you can scroll through hundreds of listings posted by Chinese-speaking users seeking subletters or looking for roommates to co-sign a lease. Users must speak Mandarin to navigate the platform. A typical listing includes a description of the property, a floorplan image of the apartment, and videos of the rooms, sometimes coupled with photos of the building’s lobby, gym, and rooftop swimming pool.
Once they’ve seen a listing they like, a user can contact the owner of the post by friending them on WeChat or sending a direct message via Ehomie. Yang Zhou, an electrical engineering Ph.D. student at New York University, has used Ehomie to both sublet from and to other people. He says the WeChat integration not only makes the whole process easier and smoother but also provides a safe space for subletters, allowing them to simplify the renting process, oftentimes by having a verbal agreement and skipping a sublease altogether. WeChat, the most popular messaging app in China, dominates almost every facet of a person’s daily online existence.
“The trust comes from the fact that people are posting their WeChat contacts in public,” says Zhou, who considers his WeChat account as a part of his personal information. The platform requires users to register accounts with a government-issued ID number and asks an existing user to verify the registrant’s identity. “Once you put it out there, it gives everyone the impression that you are serious about renting, instead of having some other motives.”
However, such trust can undercut Ehomie’s profit opportunities. As a free marketplace, the company’s WeChat platform isn’t bringing in revenue, because users can list their properties for free, sidestep the app, and make transactions on their own. Ehomie’s previous efforts to keep money flow on the platform and charging a small fee also didn’t catch on; only the brokerage sector has been profitable.
It’s too early to tell if Ehomie’s new endeavors will pay off. Still, by existing largely on WeChat and only available in Mandarin, Ehomie has, by default, become an exclusive go-to rental platform for Chinese internationals. Companies such as USWOO, owned by Overseas Student Service Corp., and Uhomes are also vying for the position, but Ehomie’s WeChat platform has amassed such a sizable following that some of its competitors also list postings on it.
“The properties listed on Ehomie provide the kind of rental information that hit the sweet spot for Chinese international students and those who just entered the job market,” says Zhou. Compared to Facebook rental groups, StreetEasy, and Zillow, Ehomie has fewer listings, but they’re more likely to be viable options for a Chinese student.
This “sweet spot” means luxury buildings, which make up the majority of listings on Ehomie, often with “flex” layouts where the living room has been sectioned off into a bedroom to reduce costs; in Manhattan a true one-bedroom can easily top $4,000 per month.
Over the past five years, Chinese students coming to the US have higher budgets, $1,500–$1,800 on average, which is a 25% increase compared to 2017, according to Gui. For them, a 24/7 doorman, mailroom, modern utilities such as a gym, a lounge, and basketball courts, and a safe neighborhood close to grocery stores and public transportations are all important—and sometimes necessary—for living.
Rising hate crimes against Asians “is having an impact” on where Chinese expatriates choose to live, Zhou says. “We like to live together in an area where there are other Chinese people.”
(Adds name and offerings of the 11th Avenue concierge service in seventh paragraph. A previous update corrected where Yang Zhou is getting his Ph.D.)
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