Will Douyin's real estate business abandon the CPS model?

Is there a major change in Douyin's real estate business? The business is being adjusted again, and this time the focus is on CPS.

Recently, Future Keqi heard from industry insiders that Douyin's real estate business is about to abandon the CPS model it once focused on and transform into a new lead - generation model. Since its launch, the CPS model has only been in development for a little over a year. According to the data released by Douyin's real estate business, its performance is not bad. For example, in 2024, there were more than 86 cooperating service providers, 35,000 new influencers were added, and the transaction GTV increased by 8 times compared with 2023. This year, there were more than 1,200 cooperating projects, the cross - regional transaction rate increased by 30%, and it covered 50 cities.

Source: Douyin Real Estate Ecosystem White Paper

Why is the CPS model, which has good results and is still developing rapidly, being abandoned at this time? To figure out this question, let's first talk about what CPS is.

01

CPS stands for Cost Per Sale. Simply put, it is an online trading model where commissions are paid based on actual transactions. Different from the traditional offline model, it is based on the short - video and live - streaming ecosystem, integrates resources from multiple parties such as developers, influencers, and service providers, and is mainly targeted at the new - home market.

In the case of Douyin's real estate CPS model, it cooperates with local service providers (channel companies, platform companies) in the city, promotes projects through anchor influencers, and distributes commissions at a certain ratio after the transaction is completed.

In the entire transaction process, it uses the platform's algorithm to first accurately push real - estate content to users with housing purchase needs, and then achieves its goal through a process including uploading housing sources, acquiring customers through content, reporting leads, conducting on - site visits, and settling commissions. In terms of commissions, the ratio ranges from 1% to 3% depending on the city and the project. Moreover, a segmented commission system is set up, where the higher the transaction amount, the higher the corresponding commission ratio.

Source: Douyin Real Estate Ecosystem White Paper

The emergence of this model is closely related to the current information - acquisition habits. In the past two years, although housing purchases are still mainly offline, it has become the mainstream trend for homebuyers to understand the basic situation of housing sources through online short - videos, live - streaming, and other content. According to statistics, from 2022 to 2024, the proportion of online customer sources in the real - estate industry increased from 25% to 63% in three years, and more than 60% of homebuyers use online channels as the starting point for decision - making. Therefore, for both major platforms and developers, embracing homebuyers online seems to be an inevitable path.

The emergence of Douyin's real estate CPS model a little over a year ago was also timely. Judging from the data, the CPS model seems to have passed the test. Throughout 2024, the total number of Douyin real - estate creators increased by 33.1%; the number of opened cities, the number of cooperating service providers, and the scale of influencers increased by 140%, 274%, and 994% respectively, covering nearly 200 million fans; users actively searched for real - estate information on Douyin more than 350 million times, almost doubling compared with two years ago...

So, is Douyin's real estate CPS model just a sales model that improves transaction efficiency?

Actually, it's not.

02

Looking at the real - estate transaction market in recent years, industry pain points such as the lengthening of the buyer's decision - making cycle, the monopoly of the market by leading brokerage institutions, and the intensification of differentiation have become more prominent. Douyin's real estate CPS model seems to provide some answers to these problems. Under this model, developers and homebuyers on both sides of the transaction can complete the purchase and sale with a more efficient process and lower costs. Influencers and service providers who provide services not only solve the "last - mile transportation problem" of online housing purchases but also make the transaction more transparent through full - process online tracking, purifying the industry ecosystem.

For example, in the past, when developers sold houses, there were only two ways to acquire customers through marketing: one was offline and online advertising, and the other was relying on channels such as Lianjia. Due to several intermediate procedures, the customer - acquisition cost was high, and they were also a bit passive in connecting with customers. Under Douyin's real estate CPS model, with the help of data algorithms, developers have more advertising channels to choose from, acquire customers more accurately, and reduce costs. For example, the average daily customer - acquisition cost of Poly Developments' pilot "24 - hour digital human live - streaming room" is only 58 yuan per person.

In addition, real - estate enterprises can also use the platform's public - domain traffic pool to maximize the project's exposure. Relying on the platform, they can form their own marketing teams, set up self - operated live - streaming accounts, and build private - domain traffic pools. They can directly connect with homebuyers, shortening the transaction cycle. Moreover, they no longer need to prepay high advertising fees in the early stage as in traditional marketing, and only need to pay the corresponding commission after the transaction is completed, reducing the cost risk. Driven by this, real - estate enterprises are also accelerating the layout of online marketing systems. Taking Douyin as an example, among various real - estate creators, the growth rate of real - estate developer creators exceeds 90%. The real - estate industry is gradually shifting from "channel - dependent" to "content - driven".

For influencers, relying on the Douyin platform, its traffic support, training opportunities, etc., they can create more and more professional content, attract potential customers, and improve their monetization ability. Then, through live - streaming house sales and offline cooperation with developers, they can provide home - purchase services for customers and ultimately achieve profits. Real - estate content creators can become real - estate sellers with these two identities. In addition to broadening the profit channels, they also open up more sales channels for developers and diversify the home - purchase experience for consumers.

In addition, for homebuyers, it is easier and more convenient to obtain housing - source information through Douyin's real - estate CPS model. They can also accurately match relevant housing sources according to their own housing - purchase needs. By using Douyin's Juhaofang system, they can track the progress of each home - purchase process, which is not only worry - free but also maximally guarantees the safety of home purchases. Therefore, Douyin is favored by many homebuyers. Last year, the annual search volume reached 4.5 billion times, and more than 60% of on - site visits were completed through live - streaming rooms. It is worth mentioning that through the self - operated platforms of developers or the platforms of influencers, homebuyers can also get exclusive discounts and benefits such as parking - space vouchers and decoration packages, reducing the home - purchase cost.

Source: Douyin Real Estate Ecosystem White Paper

Actually, we can see that there is an indispensable role in this ecosystem - the service provider. It is similar to an "intermediary", which can connect with influencers and customers on the one hand and housing - source projects on the other. Different from traditional intermediaries, they are under the control of Douyin's real - estate business. To avoid monopoly and provide better services to customers, Douyin requires that there be at least two service providers in core cities. Under such restrictions, the industry ecosystem can develop in a healthy way.

In the current era of high - speed Internet development, any industry wants to catch the traffic express to seek its own development. Needless to say for daily - life categories such as clothing, beauty, and food, large - value commodities such as real estate also want to get a share. However, due to factors such as high unit price, complex process, and strong dependence on offline, it is actually very difficult for the real - estate industry and the Internet to achieve 1 + 1>2.

At present, the CPS model launched by Douyin is undoubtedly an effective attempt, which has opened up a closed - loop path for online real - estate transactions.

So, the question is, why does Douyin's real - estate business, which has shown signs of success with the CPS model, want to abandon it?

03

Let's start with the industry. From SouFun, Anjuke, Tencent to today's Douyin and Kuaishou, at different times and stages, the real - estate industry has triggered major changes in marketing models. From the initial advertising sales, to the era of channel dominance, and then to today's short - video and live - streaming, as the times progress, models that do not conform to the development of the times are gradually phased out.

Looking at the models of several major platforms in the industry today, we can see some clues. For example, Tencent Real Estate adheres to the advertising model. Different from previous real - estate advertising, it relies on the advertising resources of multiple Tencent platforms, including Video Accounts and WeChat. Douyin Real Estate is content - driven, using the CPS model to complete sales through the link of "acquiring customers through content - converting leads - offline transactions".

Of course, this attempt has not been smooth sailing. It is understood that Douyin's real - estate business once included Xingfuli and Douyin Real Estate. In 2020, Xingfuli entered the new - home and second - hand home transaction markets, while Douyin Real Estate charged fees from intermediaries and real - estate agents through ports, allowing them to post information on Douyin to acquire leads. Later, Xingfuli withdrew from the offline transactions of new and second - hand homes. At the end of 2023, Xingfuli and Douyin Real Estate were merged into the Douyin Real Estate business platform and transformed into the CPS model.

After nearly two years of promotion, with many twists and turns and the investment of resources from multiple parties, just when the online closed - loop was about to be achieved, suddenly abandoning it means that the sunk costs of relevant parties such as the platform, service providers, and influencers will all be wasted.

In the short term, the model transformation may directly lead to a decrease in the trust of developers and homebuyers in the Douyin platform. How many developers will continue to cooperate with Douyin in the new, unclear - development model? The income of influencers who originally relied on the CPS model to obtain commissions will definitely be affected in the short term. Will these creators in the Douyin ecosystem transfer to other platforms? In the long run, this move by Douyin is not a way to encourage good content and good creators. Instead, it is more likely to cause a loss of resources. By then, the amount of good content on the Douyin platform will surely gradually decrease. How will Douyin Real Estate re - establish its industry influence?

Observing the industry's actions, Future Keqi can't help but wonder if Douyin is doing this to learn from Kuaishou. After all, the latter first experimented with the CPS model and then abandoned it last year to switch to the lead - generation model.

The "lead - generation model" that Douyin Real Estate is about to transform into is rumored to still use the previous port model, that is, real - estate agents obtain relevant leads by paying fees. In essence, it is still a pure advertising model. Looking at the development trajectory of the industry, it is not difficult to find that this is an outdated model. From the perspective of Douyin's real - estate business, this is also a model that was abandoned before 2023. Now that Douyin Real Estate wants to revive it, what is the probability of its success? Moreover, in many cases, going backwards also has risks. After all, the times are different, and the industry ecosystem has undergone many changes. Some paths cannot be retraced.