A Q+A with Jason Lim, a successful Australian entrepreneur launching a service aimed at domestic Chinese apartment hunters amid ever-soaring housing costs
The city of Beijing is a place with rich culture, constant changes and a growing startup scene. As one of the more developed tech hubs in the country, Beijing is host to a large and growing number of foreign entrepreneurs looking to make an impact in China.
I sat down for an interview with Jason Lim, an Australian entrepreneur who’s been based here in the capital for the past three years. His newest project, Toujuwang, is an online platform with the goal of bringing transparency to local housing prices for domestic Chinese apartment hunters. With many existing housing websites posting false apartment photos and misleading prices, Jason hopes to win over the local Chinese market by providing an open alternative method for apartment hunting.
Toujuwang is a unique project not only in that it is attempting to provide a service inside the domestic market, but that it builds on Lim’s previous experience building an apartment search service for expats.
Can you tell us a bit about how you came up with the name and idea behind Toujuwang?
The idea from the start was to increase transparency in the residential real estate market in China. To achieve this, we want to build a network of renters in China and give them a platform to share and exchange information about their rental situation, like price and quality of property. We want to bring this information to the surface and give them an alternative to asking agents, looking at poor websites or asking a limited number of friends.
The name “Toujuwang” means “transparent living space.” It comes from the Chinese words tòumíng 透明, which means transparent, and zhù 住 (pronounced similar to ju), which means to live. We want to empower renters to share and have access to information that is otherwise hidden or controlled by people who are incentivized to keep the market murky.
Right now if you were to figure out the price of a rental property on your own, there are only a limited number of sources. If you think about it, all of these sources (besides your friends) are biased. Agents and landlords are incentivized to charge more rent to obviously make more money. Websites artificially list lower prices to attract customers, and then switch them to something that is really “available.” You can imagine how frustrating it is for people to hear so many vastly different quotes. We hope that Toujuwang will give people an idea of what the prices are in certain areas so that they can make an informed decision on where to live.
We’re hopeful that the product will impact the market by breaking open a lot of information that is otherwise hidden. From my own and my friends’ personal experiences, we know that property rental prices are extremely high now in China, and it’s squeezing a lot of money out of people who can’t afford it.
Not many people can afford to buy an apartment so they rent, but even renting is absurdly expensive right now. This ultimately affects their disposable income because more money has to go to rent compared to other important things like food or entertainment.
We’re hoping the transparency of prices will help to rebalance the rental prices more. With better flowing information, the market can ideally re-correct itself and eventually save people time and money.
Who are your primary competitors, if there are any?
The product that we’re working on is very new in China and there is no direct competitor. That being said, some indirect competitors are existing online housing platforms such as Soufun, Haozu, and Anjuke. These are listing-based, so they list properties on their site and connect them to agents. Other competitors would be online classified sites like 58.com or Ganji.com. Since they make money from advertising, they have no strong incentive to vet the accuracy of the information being posted. We believe up to 70-80% of listings can be fake, except for the agent’s phone number.
Seeing as the service is not yet launched, can you tell us about its current stage of development and target launch date?
Toujuwang is still in development and we aim to launch in the next few months. To be notified on its launch, you can sign up online.
Your previous startup, Koombah, provided a housing service for expats in Beijing, while Toujuwang will be a platform for local Chinese. What made you decide to create a housing product for the local market?
The main reason was that we wanted to move away from a service business for a small market (expats) that would take a long investment of time and require a heavy operational team to execute. We wanted to build something that could scale faster, is less people-intensive and has a bigger market. If we want to do a startup that can make it big, we have to go after a big market and build something that can grow quickly. We feel like Toujuwang can achieve that better than Koombah.
What do you think are the differences in dealing with foreign versus domestic customers?
Generally speaking, foreigners are more demanding than locals. Locals are accustomed to how things work and usually don’t push back or challenge something that isn’t working. They accept things and say ‘méi bànfǎ’ (it is what it is). Foreigners on the other hand know what things are like from the outside, so they expect things to be the same as in Western countries. Additionally, locals seem to care more about efficiency rather than quality but the paradigm shift towards quality has already started, as Chinese are becoming wealthier.
What do you anticipate as potential challenges in dealing with domestic customers?
One key challenge is preventing people from posting fake information, especially agents. However, we will implement a number of techniques to limit fraud. Another key challenge is how to drive the stickiness of the product, meaning how to keep users returning constantly.
What are some things you learned while launching your previous startup in Beijing, and how can you apply those lessons this time around?
One lesson that I learnt is to always be very focused about what your goal is and not to let that slip. For example, with Koombah we wanted to create an online product for an offline service. But since we didn’t have a product, we started working on how to create the best service. It made some money so we kept doing it. The problem was, we fell into the “service trap” and didn’t focus on building a great product.
Along the same lines, I would say another lesson is that building a great product is fundamental to a great tech startup business. You can spend a lot of time trying to make sure your financial projections, business plans, pitch presentations are perfect, but a well thought-out and designed product is what will win at the end of the day. This means there is a constant need to adjust plans while making sure the product is solid first and there is a product-market fit, meaning you are making the right product for the right users at the right time. Build a product that people want to use and will tell other people about.
When dealing in China, so many things can change last minute that it is important to have a back-up or other options. Especially when working with partners or vendors.
What advice would you give for other entrepreneurs trying to start a business in China?
For foreign entrepreneurs, I’d say it’s good to firstly understand China from both a cultural and market perspective. You can’t just apply whatever happens back home to China because things are so different. You have to be humble and be willing to learn and accept you are often wrong. It’s better to be wrong and move on than think you’re right and waste a lot of time. This is easier said than done!
Following on from just being in China and absorbing it, I think the research phase is very important. I think the first step is to research the market, get to know people in the industry, potential partners and existing competitors. The will give you clarity about what is really happening and might even surprise you. To know what you can, can’t or should do, it’s crucial to have a local Chinese person on the team or someone you can at least trust and reach out to when you need to. They might even be in the form of an advisor or investor.
Establishing a business is much quicker and straightforward in Western countries compared to China. In China, you have to go through a lot of procedures to create a business/company, especially a domestic company with local shareholders. The process can seem excessively long so don’t underestimate it.
The gray areas in China can complicate things, but it goes both ways. There are also a lot of situations where gray areas help you get things done quicker. It’s also easier to work with cash, since China is still a cash-based economy.
Michelle is a San Francisco native who has been living and working in Beijing for more than four years. She is a digital marketer & blogger with a passion for learning and sharing about business and personal relationships in China.