After 14 years of natural growth, it has changed the underlying logic of the rental industry twice.

In the summer of 2011, a group of Chinese entrepreneurs flew to Japan and the United States.

They came from the real estate industry, which had just set a record in transaction volume. This time, they set their sights on the earlier - established and larger markets in Japan and the United States, aiming to learn from local brand - leading enterprises about the mature market paths that could be referenced.

Among them was Xiong Lin, who was preparing a new business at Lianjia.

Before 2011, the housing rental market was still in the C2C stage: intermediaries only facilitated transactions, and landlords only wanted to rent out their houses as a whole. Xiong Lin planned to enter the rental field and "productize" the individual rental housing sources scattered in the market. He organized a team, established an institution to "acquire houses" from individual landlords, then carried out product - oriented renovations, provided services, transformed the C2C model into a C2B2C model, and made the then - gray market more transparent.

American counterparts told him, "Your model won't succeed." Obtaining, renovating, splitting, and renting out houses from tens of thousands of individual owners in thousands of communities would result in extremely high labor, maintenance, and management costs due to the scattered housing sources and tenants.

"They may not understand this market well, nor our team," Xiong Lin and the founding team decided to stick to their own judgment.

At that time, both the supply and demand sides of the housing rental market entered the fastest "incremental expansion" period in history. Xiong Lin judged that this highly active market with great growth potential "had not been positioned as a business model or a worthy field by most commercial institutions. Everyone was still operating under the traditional real - estate development logic."

A few months after returning from the United States, the platform officially launched its first batch of housing sources and finalized the brand name: Ziroom. Thus, a new era in the long - term rental industry in China began.

Ziroom focuses its core operations on three aspects:

Firstly, in terms of products, it releases the originally scattered housing sources that were rented out as a whole in the form of individual rooms or suites. It also conducts unified renovations on the housing sources and equips them with standard furniture and household appliances, better meeting the needs of mainstream rental groups such as single people, couples, and small families, and significantly improving the utilization efficiency of housing sources.

Secondly, in terms of services, it provides services during the lease term, such as cleaning and maintenance, ensuring the controllability and stability of the rental quality, and turning "renting a good house" from a probabilistic event into an expected result.

Thirdly, in terms of technology, on the one hand, it digitizes all housing source information online, enhancing the house - viewing experience and efficiency. On the other hand, it optimizes the supply - demand matching process through big data and algorithms, enabling precise matching between tenants' needs and housing source characteristics. At the same time, it uses technology to drive the rental service from extensive operation to refined management.

Before the establishment of Ziroom, the "C2C" model in the traditional rental market had long been in a state of "scattered, chaotic, and inefficient." Ziroom showed the industry the value that the "B" side could play. Since then, the housing rental market has moved from the traditional inefficient and non - standard model to a new stage of scale and specialization. In China's first - tier and new first - tier cities, renting a house has become as simple as booking a hotel online. For the first time, the underlying logic of the housing rental industry has changed.

After Ziroom established the underlying framework for standardized operations and its market reputation and business model were verified, the long - term rental industry witnessed rapid development. However, Ziroom proposed that it was time for a change.

In 2021, Xiong Lin decided to abandon the model that had been used for 10 years and fully switch to the "value - added rental" model, transforming Ziroom into an asset management company.

"Theoretically, we regard each homeowner as the owner of a five - star hotel or an economy hotel. We will help you plan how to rent out this house in the next ten years, just like managing a hotel," Xiong Lin said. This was a change in the underlying logic.

The outside world was puzzled and, just like when Ziroom was founded in 2011, once again told Ziroom that it "wouldn't work." In the first month of the model switch, the number of houses acquired by Ziroom dropped sharply from an average of 5,000 per month to only 213.

However, the market soon confirmed Xiong Lin's judgment. After 2021, the rental market declined rapidly, and many rental enterprises couldn't withstand the pressure and went out of business. But because Ziroom had completed the model transformation in advance, it survived healthily. Currently, more than 70% of the housing sources managed by Ziroom have switched to the value - added rental model.

Previously, in order to obtain higher returns, rental enterprises continuously competed in scale and capital, trying to control as many rental resources in an area as possible to gain market pricing power. But four years ago, Ziroom took the lead in exploring the operational value and built a stable model with the value - added rental, becoming a new benchmark for the healthy development of the professional housing rental market in China.

Xiong Lin believes that all trends are the result of continuous accumulation, and running a business cannot rely on luck. "Whether a business grows can be evaluated from three dimensions: one is scale, the second is quality, and the third, which most people don't value today but I do, is the age of the enterprise."

Enterprises also have their own growth rings and life cycles. Experience, capabilities, and risks are all the results of continuous accumulation.

On October 13th, in a courtyard house of Ziroom with a century - old ginkgo tree, Xiong Lin, the chairman and CEO of Ziroom, and Feng Dagang, the CEO of 36Kr, had a conversation, sharing Ziroom's growth and transformation over the past 14 years.

These 14 years have also been a period of ups and downs in the Chinese real estate market. In this grand narrative, as a core participant in an important field, Ziroom, like a tree, records the wind, rain, and seasonal changes with its growth rings, transforming them into its own growth and resilience.

The following is the transcript of the conversation between Xiong Lin, the chairman and CEO of Ziroom, and Feng Dagang, the CEO of 36Kr (edited and abridged):

01

14 Years Ago, Doing What Others Didn't, Ziroom Changed the Underlying Logic of the Rental Market for the First Time

Feng Dagang: Is Ziroom the largest landlord in China?

Xiong Lin: That's not an accurate way to put it.

Feng Dagang: Then what is Ziroom?

Xiong Lin: It is a technology company that provides high - quality housing products and services.

Feng Dagang: Why emphasize that it is a technology company?

Xiong Lin: From the very beginning, Ziroom has been focused on products and services, using technology to provide a more convenient rental experience.

Feng Dagang: When you started this brand 14 years ago, there must have been a vision of what kind of business and business model you wanted to create, right?

Xiong Lin: Mr. Zuo and I got to know each other through a consulting project. Our thinking patterns are very similar, and we would prepare for a long time for one thing. First, we went to the United States and Japan to see the external situation, to understand the forms of companies in this industry and at what stage they started. On the other hand, from the perspective of a consulting advisor, it's easy to spot such opportunities.

Feng Dagang: Before Ziroom, were there any similar companies doing similar things in the market?

Xiong Lin: No.

Feng Dagang: Why didn't they do it?

Xiong Lin: In the housing field in China, for a long time, rental was not regarded as a business model by most commercial institutions. Everyone was operating under the traditional real - estate development logic. What we saw was the growth of the stock and second - hand housing market in China. A large number of houses had been built, and most of them were for sale. However, some houses had started to be rented out, and we judged that this trend would become more and more prominent.

In the Chinese rental market, there are two types of supply: one is the part of the 350 million houses in thousands of communities that we see today being rented out. The other is the hotel - like and commercial - like models. There is a large supply and also a large demand, but there is a huge mismatch between them.

02

Ten Years to Make Renting as Easy as Booking a Hotel

Feng Dagang: How did you view the scattered housing sources in various communities? The quality of the houses and services was not very good at that time, right?

Xiong Lin: This is where the value of professional housing rental institutions lies in the industry.

Firstly, and most importantly, it is to truly understand the needs of users and landlords and carry out corresponding product - oriented renovations and packaging between the supply and demand sides.

For example, Ziroom's first product, "Ziroom Shared Apartment", rented out the most typical and hardest - to - rent three - bedroom apartments in Beijing and Shanghai by individual rooms. At the same time, there was a mismatch between the housing quality requirements of landlords and tenants. The house you wanted to rent was not the kind I wanted to rent. So, not only product renovations but also quality improvements were needed.

Secondly, an important factor is service. Emphasizing service is because real estate needs to be well - maintained throughout its long - term cycle through services, ensuring that each house can still be rented out in good condition after the tenant moves out.

Thirdly, technology application is given great importance. Today, there is a huge difference in the efficiency of renting a house in China and in the United States. In China, renting a house has become as easy as booking a hotel. Through products, services, and technology, high efficiency and high occupancy rates have been achieved.

Feng Dagang: What did you think was the scale of the Chinese rental market at that time?

Xiong Lin: To be honest, we didn't look at it that way. Sometimes, the so - called large - scale in business has little to do with oneself. Like most startup teams, in the early days of entrepreneurship, Ziroom hardly set any goals. We always felt too busy, and there were never enough people.

03

In 2021, the Actively Evolved "Value - Added Rental" Brings Resilient Growth

Feng Dagang: How does a typical homeowner cooperate with Ziroom?

Xiong Lin: There are two stages, ten years ago and after ten years, which also represent the biggest changes in our company. Ten years ago, our simplest model was to tell the landlord that we would manage your house, and we would pay you a certain amount of money on time every month. We called it the "worry - free rental" model.

The model transformed in recent years is called the "value - added rental" model. Theoretically, we regard each landlord as the owner of a five - star hotel or an economy hotel. We believe that this house is an important asset for the owner, and we will help the homeowner plan how to rent out the house in the next ten years, just like managing a hotel.

Through professional stewards, we provide continuous service and maintenance over a period of 5 - 10 years. Whether the homeowner finally chooses to live in the house, sell it, or continue renting it out, they can obtain stable and better returns.

In the real - estate field, there are good models in the hotel and commercial office building sectors that have matured over time. In terms of business models, Ziroom hopes to complete the model transformation by referring to these large - scale and mature asset management methods.

Feng Dagang: At the beginning, especially when the brand was just starting, people may have thought it was unreliable to hand over their houses to others for five years, right?

Xiong Lin: One of our investors asked me why he should invest in our company. I asked him if he rented out his house, and he said yes. I asked if his house would get older, and he said yes. I asked if he would be busier in the next ten years, and he said yes. I asked if he would spend more time and be willing to spend more time on managing the house, and he said no. I told him that's what we do.

Feng Dagang: But he might also say that his house will become more valuable because housing prices are rising, and he might suffer a loss if he leases it to you for five years.

Xiong Lin: Let's not discuss the level of housing prices today. Instead, let's explore the top - level value of real - estate assets during their life cycle. After the land is developed into a house, from the first decoration, it will be renovated every ten years over a period of 30 or 50 years. So, for Chinese houses over 30 years old, it's hard to imagine that they will be easier to rent out when they reach 40 years old, just from the perspective of rental.

Feng Dagang: Of course.

Xiong Lin: So, you need to continuously invest in the house.

Feng Dagang: Then who will bear the renovation cost?

Xiong Lin: In the first ten years, I believe there was little consensus on investment. So, in the first ten years, almost all the investment was made by Ziroom. Our business model was that we made this investment, and we would get the value - added part. However, after the new transformation in 2021, we clarified the value of this service and charged corresponding fees based on the management performance. So, in the new model, the landlord actually bears this cost.

Feng Dagang: Can this be quantified? As a landlord, is there a figure showing how much more I can earn by renting my house through Ziroom compared to renting it out on my own?

Xiong Lin: We've made a calculation. For the same house, if you rent it out on your own, we hope to increase the landlord's income by at least 15% over a five - year period.

Feng Dagang: I think any platform has the problem of balancing the interests of buyers and sellers. Which side should it lean towards? For example, tenants want the rent to be as low as possible, while landlords want it to be as high as possible. How does the platform balance these two sides?

Xiong Lin: I think the most important thing in the business model of all two - sided platforms is to see how much value you create in the middle. That is, where does the 15% additional income for the landlord come from? Does it come from the higher rent paid by all the tenants? This is a crucial question.

Feng Dagang: Isn't it?

Xiong Lin: Let's look at it this way. The core reason for the additional value lies in several aspects. A house is a product of time and space. That is to say, the most important factor is vacancy. When the average rental period of a house is 45 days compared to 30 days, the 15 days saved is the value created by the platform.

Feng Dagang: Agreed.

Xiong Lin: So, I believe that every platform can be accepted by the market because it creates additional value, and it is not simply a matter of sacrificing one side for the other.

Feng Dagang: What was the main reason for Ziroom's transformation to the value - added rental model? Was it because the service was becoming too burdensome and unsustainable, or