Rightmove domination of the UK property could be about to end as its faces threats from multiple sources, says leading proptech blogger James Dearsley (pictured, below).
He and his colleagues at PropTech Consult have looked at Rightmove and say the company has all the characteristics of a successful company that could lose its market-leading position.
The consultants’ report says this includes Rightmove being at the end of its original growth strategy; having a large customer database; and delivering excellent returns for investors, including dividends per share that have risen from 22p in 2012 to 51p today.
Needs to act
Despite this apparently dazzling success, James says Rightmove now needs to act and start a second period of innovation to prevent its dominant position being eroded in the “medium to long term”. The main reasons for this include:
- The increasing number of new digital opportunities for agents making them less reliant on Rightmove for leads;
- Rightmove’s failure to develop new products or services beyond its core search facility;
- The rise of online agents such as Purplebricks who may become as well-known online as Rightmove;
- Contracting profitability among high street agents restricting Rightmove’s ability to increase revenue;
- The rising power of Zoopla and its bid to developer vertically rather than horizontally;
- The potential rise of a technology-based competitor that offers a new way to search for property.
“Rightmove is an excellent business which is about to come under serious pressure from multiple angles,” says James.
“It seems impossible that it can maintain financial performance or grow in the long term based on its current strategy for an indefinite period. Instead, it should now be looking to develop and implement a new growth strategy while it is in the Innovation Window.
Read the full PropTech Consult report on Rightmove.
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