On July 24, Shell Group, a real estate trading and service platform, submitted a prospectus to the US SEC and plans to list on the New York Stock Exchange under the stock code BEKE. Zuo Hui, the founder of Shell Group and chairman of the board of directors, issued an open letter to investors in the prospectus.
Reading through the full text, even if you never knew Zuo Hui before, you would put him in the folder of “Ideal People” in your brain. This open letter was reposted by many founders and friends in the circle of friends, or low-key acquiescence to his character, or highly praised his talent, but there is a consensus that dare to submit the prospectus to the US Securities and Exchange Commission at this time of internal and external heat. People must be true and true.
There are almost no sensational words in the whole article, only simple theory and practice, but it can make people look at it word by word, and never look at it at a glance, and feel awe. I have not met the founder Mr. Zuo Hui, but I believe that he must be a person with firm conviction, extreme persistence, and extreme stubbornness.
“Non-virtual Composition 2002~2020” is the title I customized for this open letter. When I removed the duplicates, I found that the work of the same name is also the first book work of TF BOYS. Regardless, the following is the full text of the open letter to investors from Zuo Hui, the new IPO board owner and founder of Shell Group, to share with you.
Click the picture to view the Chinese version
Thank you for taking the time to understand the story of shells. I want to share with you our views on the industry, our organization and the future. We have profoundly changed this industry through the power of the Internet and big data.
We are an organization that combines China’s leading real estate brokerage brand chain home with a history of more than 18 years and China’s leading online and offline housing transaction and service platform Shell with a two-year history. With years of industry experience, we are well aware that China’s housing transaction and service industry is still in the “pre-industrial” stage. Through the power of the Internet and big data, there is still enough space and opportunities for transformation. In the past 18 years, we have changed the industry by reshaping and building industry infrastructure and standards, which paved the way for the rise of shells with new and innovative business models.
Our industry transformation revolves around three key themes
1. The lack of industry standards, infrastructure, and professional service providers with experience and tenure has led to the “pre-industrial” stage of housing transactions and service industries that are dissatisfied with housing customers. By establishing service agreements and industry standards for digital infrastructure, we strive to solve deep-rooted industry pain points and transform the industry through three transformations: housing data standardization, service provider specialization, and transaction process standardization.
2. Digitization. Using powerful data capabilities, we took the lead in establishing a real, real-time and huge house listing and information sharing system in China, providing us with a wide range of online touch points and high-quality customer traffic, which is a very low purchase price Frequency is the representative industry. At the same time, we digitized the decentralized offline data and made the entire housing transaction process online, which not only changed the transaction process, but also changed the post-transaction stage, such as mortgage and property rights liquidation. With these profound changes, traditional brokerage service providers are facing the challenge of effectively adapting and competing in the digital era of housing services. We have redefined the qualification standards of service providers and invested heavily in recruiting and training college graduates to provide brokerage services in the new era.
3. Digital transactions and services encourage buyers, sellers and service providers to actively interact and share information to provide us with valuable data insights, which in turn helps to improve service efficiency and customer experience. This improvement promotes more meaningful interactions and forms a virtuous circle. Therefore, our understanding of the industry and professional skills develop rapidly along with the accumulated data insights, enabling us to create more value for our customers.
Even if there are difficulties, do the right thing
We have seen repeated themes in many industries in China, which are characterized by: 1) complex industries, long value chains, lack of infrastructure; 2) low service efficiency, poor customer and service provider experience, and 3) market size Large but still growing rapidly. Industry participants are often attracted by “huge” short-term opportunities, while 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 “quick success” type of things, because we believe in the long-term benefits of the shortcut to rapid success. We understand that doing the “right” thing is inherently challenging, because in the long run, we need to spend time reforming industry infrastructure, improving service efficiency and consumer experience in order to create greater shareholder value.
We believe that the only way to success is to build on doing the right thing even if it is very difficult. The most difficult part is that before long-term growth and greater results are achieved, doing the “right” things is often accompanied by short-term economic sacrifices. We believe that the initial challenge paved the way for long-term success, even though the organization faced obstacles in the so-called “investment stage without economic returns”. Over the years, we have cultivated a large management team with this core mentality, and we are proud of it. Our team has gone through the difficult “investment phase without financial return” time and time again, which ultimately led to our long-term growth and positive customer experience. Our firm belief in doing the right thing for long-term success is further reaffirmed.
As our IPO is just around the corner, we especially want to share our firm belief with investors that it is doing the right thing for long-term success. Although we are confident in our recent financial performance, we will work harder to develop and invest in our long-term capabilities, even if these investments may take time to achieve financial returns. In fact, the longer the time and the greater the difficulty, the more excited we are.
Established a broker cooperation network and achieved full industry coverage
People are increasingly demanding higher standards of living conditions, and this demand has been further strengthened by the COVID-19 pandemic. Our business relies on community-centric stores and brokers, who deliver valuable market information to housing customers every day and help them achieve a “better life” (one of our missions). With the development of information technology, the Internet and big data, we can build a more complex and efficient broker cooperation network. We analyze the personal characteristics of brokers and match their abilities and unique relationships with appropriate communities to create more roles for brokers in transactions, so that multiple of them can effectively cooperate in a single transaction. We usually see 5 or more brokers cooperating in housing transactions. This is a favorable model that enables brokers to actively participate in more transactions, establish a longer-term presence, and commit to serving the community Service, which brings more long-term opportunities.
What does the broker cooperation network believe? We believe that enhanced cooperation will expand the scope of each participant. By transforming the zero-sum game between brokers into a win-win game, the broker cooperation network makes it possible to cooperate between brokers and provide high-quality services to housing consumers. We believe that better service quality will bring a positive customer experience, which in turn will inspire service providers to further improve service quality. Once established, this virtuous circle based on quality will become extremely powerful. We believe that the basic agreement of the broker cooperation network is built on the strong support of the platform, and we can win the trust of customers through mutual trust between brokers and between brokers and the platform. We also believe that our core assets, the core team of the management team with more than 10,000 highly qualified professionals, are critical to our success. They have worked with us for more than 7 years and have the same value.
We divide the entire industrial chain of the residential real estate industry into four areas: construction, transaction, life and supporting services (such as financial services). We believe that by developing a unique model that combines the promised services of offline brokerage networks and deep online data insights into consumers, we have the potential to create new value along the industry value chain.
The value of service providers and A+E
As the digitalization of traditional services advances, we believe that the value of service providers will continue to increase. With the support of data and tools, service providers will be able to provide customers with more professional services in integrated online and offline scenarios. We call this innovative service model “broker + engineer” (A+E). In this model, engineers collect and edit data as a tool to train and empower brokers to serve customers in a better way.
For many years, we have regarded brokers as our customers and achievements. On the one hand, we encourage and support them to serve customers in a professional and ethical manner. On the other hand, we continue to invest and train brokers to improve their knowledge base and protect their rights. We are eager to bring professional recognition and respect (the second part of our mission) to our brokers-distinguished service providers. We believe that only dignified service providers can provide customers with valuable services.
Based on our deep understanding of the complexity of the industry, we firmly believe in the combination of massive online investments and deep offline connections. Companies that simply connect with offline service providers cannot create a customer-oriented self-reinforcing cycle, nor can they influence the way services are provided, nor can they successfully realize the full potential of the platform.
Never stop to create more value
During the global COVID-19 pandemic, we submitted confidential documents to the US Securities and Exchange Commission for the initial public offering. We did not postpone the listing process, but proceeded as planned, which also reflects our belief in focusing on endogenous factors and minimizing external influences. We believe that the basic value of a company, not the external environment, is a key factor in a successful listing.
Looking ahead, we believe that the company can create indispensable value for the industry, rather than changing the competitive landscape or the external environment. This will promote the company’s long-term growth and development. For this, we never stop.
We continue to think strategically and guide the growth and development of our organization by finding out how to develop from the current point A to point B within five years, and excluding the easiest way to reach point B. Despite the cost, we still guide the growth and development of our organization through an unwavering and sincere commitment to our customers. We guide the growth and development of our organization by expanding into unknown areas and conquering difficult new markets with great potential. We inspire offline service providers to use online tools to grow and develop, and at the same time promote online engineers to dig into the industry.
We are committed to technology, but we also seek to understand our service providers and customers; we are committed to reshaping the industry through technology. We strive to understand the essence in a rational and scientific way and improve efficiency. At the same time, it is equally important that we have the desire and ability to understand the ideas and needs of service providers and customers, and pay attention to all details when providing services, especially considering that we are facing a huge service offering Business and customer groups and a typical service cycle of more than 100 days.
Create value for the community
Our business is deeply rooted in many communities. We have established an extensive offline service network and cultivated a large team of service providers. We are committed to providing more social value and achieving a “better life” in the community. Our brokers teach seniors to use smartphones, provide free printouts, and help with package delivery and storage, old book collection and donation services in the community. During the new crown pneumonia epidemic, we even helped guard the gate and patrol the neighborhood. We strive to help platform participants understand and complete our mission.
Thank you again for reading this letter. Today, many popular companies seek to quickly change the world without shaking their fundamentals. In our view, we are an organization with game-changing ideas and methods to fundamentally transform and improve a traditional, difficult, and laborious industry. We are an organization that encourages traditional industries to transform into a new business world. We believe that we are a leading company in our vision for the future.