Qingke Facilities Leasing: Strategic Decision-Making to Capture the Apartment Leasing Market

In April 2012, Qingke Facilities Leasing Ltd. (Qingke), a technology-based real estate management company, was founded to provide a long-term apartment rental service to young professionals in Shanghai and some other cities. The goal was to rent constructed but vacant apartments on the Shanghai market by leveraging information technology resources for all operations and by employing a model of standard apartment renovation.<br><br>A decentralized long-term apartment rental model was introduced to China’s market in 2014 by leading Internet-based companies and was booming by 2017. At the end of 2018, Qingke was one of the top ten brands in the long-term apartment rental market, running 100,000 renting units in coastal cities in China with revenue of ¥1.2 billion that year. However, to sustain rapid market growth and create a large-scale Internet economic model, Qingke would have to overcome many uncertainties and challenges, including capital acquisition; strong competition; constraints to its financial resources, team building efforts, work force development, and sustainability; and extension of the business model.<br><br>By the beginning of 2019, Qingke had come a long way; the US$100 million in funding he received in 2018 signified a major accomplishment in Qingke’s progress since its establishment in 2012. However, competitors were targeting Qingke with the aim of overtaking its market share. How could the recent funding strengthen Qingke’s position in the housing rental market and gain sufficient market share? Should Qingke increase investment in information technology to upgrade its data processing abilities and capacity, or should it build its brand to promote market exposure and awareness?

This case is suitable for fourth-year, undergraduate-level, strategic management courses and for strategic management courses at the graduate level. The case gives students an opportunity to analyze how technology affects a start-up company’s market expansion strategy. Specifically, students will analyze this in the context of Qingke, considering that in China, the property management industry has been shaped and transformed by government policies and population migration, as well as by rapid economic growth and massive technical innovation. After working through the case and assignment questions, students should be able to do the following:<ul><li>Identify and define the characteristics of a good start-up idea and opportunity.</li><li>Determine the actions to be taken to pursue an idea or opportunity, iterate and modify it along the way to create a start-up, and finally lead the start-up to growth and success.</li><li>Explain the foundational role of IT in the start-up and e-commerce value chain.</li><li>Explore options for leveraging IT and big data to transform incumbent organizations and markets.</li><li>Consider how to develop and continuously fine-tune new business models to gain and sustain a competitive advantage in new markets.</li><li>Understand the importance of long-term strategic planning.</li></ul>

• Rental Service, Internet Plus, Shanghai