Interviewed on April 6, 2020
Interviewed by Yingying Zhu
Alice Guo was responsible for product innovation at Ping An Urban-Tech. At Ping An, she held strategy and business development roles to help drive strategic partnership and new technology initiatives in urban tech community in China. She co-founded UrbanLab, China’s first corporate accelerator program that focuses on property technology, aiming to foster and further develop promising tech companies and creating innovative technology solutions for the real estate industry in China. Her focus is smart city, construction tech and digital real estate technologies, and she is excited about how technology is disrupting the built world. Prior to Ping An, she worked at Fifth Wall, a venture capital focuses on property technology. She also worked in real estate debt financing at Trez Capital in Canada. She graduated from Columbia University with a Master in Real Estate Development, and received her Bachelor degree in Finance from the University of British Columbia
You co-founded China’s first proptech accelerator UrbanLab in 2019. Can you describe for us UrbanLab’s focus area when selecting startups? UrbanLab was founded by three corporate partners – Swire Properties, Jones Lang LaSalle and Ping An Urban-Tech. Each one of us has specific innovation needs that we are looking to fulfill using open innovation and collaboration. Through screening more than 100+ digital solutions, each of us selected 4 startups to partner with in this accelerator program. Swire as an owner-developer focuses on startup ideas on smart building, retail innovation, energy management, e.g. Giga IoT (giga.build). JLL as a service provider focuses on building operations and data analytics. Ping An Technology has an important pillar focusing on smart city and construction tech and has therefore partnered with a few technology companies in these fields such as XKool Map (xkool.ai), who uses AI to automate zoning analysis and assist master planning and concept design, and Palmap (palmap.cn), who provides indoor mapping and orientation services to buildings including hospitals and parking lots. We have a few general criteria when selecting cohort companies, to name a few, these startups must have commercial-ready products or services, existing customer and implementation in Mainland China, and sales, engineering, and operational capabilities. Our goal is to build a platform to allow fast sourcing, testing and adoption of new technology in real estate industry in China.
“We felt that we have reached the goal when our senior leaders concluded that, ‘we need to engage in more technology collaboration in the future.’ ”
What impact has UrbanLab made? The first cohort of UrbanLab which consists of 12 startups were selected and went through a successful three-month accelerator program, essentially these 12 startups all completed a successful PoC (proof of concept) with the corporate partners. We held a Demo Day last December and invited a wide audience of market players, including top VC firms and real estate firms in China, to share our results. Through UrbanLab, we have seen hundreds of tech companies across every aspect of the commercial real estate lifecycle. These companies exist to improve revenue or efficiency or to gain customer satisfaction and growth. However, among everything, the biggest impact comes from the changes happened within our organizations. We not only have raised the awareness of our internal business units, who become more educated on the latest tech trends and understand how technology creates value for their work, but we have also garnered more support from our senior management. We felt that we have reached the goal when our senior leaders concluded in our recap meeting, “we need to engage in more technology collaboration in the future.”
What was the key to promote the technology application within real estate companies, and within government clients in some cases? For real estate companies, the key is to deliver value. From generating more rental revenue, saving operational costs, meeting evolving consumer demand, to making buildings more efficient and more valuable in the long run, technology has to, in a way, create additional value in the physical assets to incentivize real estate firms to innovate. For urban planning and smart city technologies, the clients are usually government agencies. The financial metrics don’t necessarily apply to them the same way so the key is to visualize the impact for them and make sure the digital solutions help achieve the strategic goal. In either case, it is important to test a few small-scale initiatives, such as PoCs, early on for quick returns in order to build scale.
“In China, government is the invisible hand. There are a few policies acting as the key drivers for the tech scene in China. Smart City… Made in China 2025… and Internet +.”
What role does Chinese government play in the proptech industry? This is a great question because people from the western world sometimes do not necessarily realize that this is one of the key differences between Chinese tech ecosystem and the US tech ecosystem. In China, government is the invisible hand. There are a few policies acting as the key drivers for the tech scene in China. Smart City – China’s urbanization rate has edged up to 60% in just over a few decades, a same process took the western world centuries. Because of the rapid transformation in urban life, the cities are motivated to promote innovation to combat its negative side effects such as air pollution and traffic congestion. Alibaba has been working closely with the city of Hangzhou, where they are headquartered at, to develop a smart city system called “ET City Brain” to optimize the traffic light system and monitor traffic accidents and violations. People who I know made business trips to Hangzhou said the congestion has been greatly reduced. China has plans for approximately 500 smart city pilot projects, the highest in the world, not to mention that the central government is building a smart city Xiong’an New Area near Beijing from the ground up. Made in China 2025 – China has been making great strides in transforming its economy away from just being the hub of low-level manufacturers. The mandate of “Made in China 2025” focuses on high-value high-tech manufacturing sectors including the pharmaceutical industry, automotive industry, aerospace industry, semiconductors, IT and robotics. E.g. Building IoT technologies would fall into this the areas encouraged by this policy. Internet+ – This policy means to integrate the internet with the traditional industries such as “Internet+ Finance” or “Internet+ Agriculture”. The governments support startups working on these initiatives from the perspectives of funding, government purchase and tax policies.
How should startups best take advantage of these government initiatives? There are pros and cons in everything. The pros are startups can get funding and grants from the government and sometimes the government can even become a client. But often times, due to the scale of the government project, it is hard for the startup to work directly with them. For a startup with a ToG (to government) solution, the best way is to have a corporate partner like Ping An and pitch to the government clients together with more comprehensive solutions. In many of our smart city projects, Ping An acts as a general contractor, and many startups are our sub-contractors providing different types of services. For example, in a construction tech project, we sub-contracted Kiwi Information (kiwiinc.net), a startup develops IoT platform for construction and engineering management, to provide drone services for construction surveying.
What is the competitive advantage of China’s proptech or general tech industry? Chinese tech giants such as BAT (Baidu, Alibaba and Tencent) are no longer copycats of their US counterparts. On the contrary, it has become apparent that US companies are starting to learn certain business models from Chinese tech companies such as the “super app” concept introduced by WeChat. With many people returning to China like myself with overseas experience, China has exposure to global knowledge and technologies, but also more importantly – an open mind. China is leading in a few emerging technologies such as facial recognition and big data due to wider adoption and therefore more iterations from numerous use cases. Hardware tech, e.g. IoT, is definitely one of the strong areas for China. Companies from US and other countries all come to China to source their supply chain because it is more efficient and cheaper to manufacture here. Tesla set up their factory in China and their production tripled immediately. In terms of proptech, US still leads. But companies like Ziroom (ziroom.com), who has built a one-stop rental platform for services from apartment searching to moving to home cleaning to payment, is what I have not seen in the US yet. I am really impressed by Chinese companies’ ability to build ecosystem around their core businesses.
What did you learn from the experience of co-founding UrbanLab? The No.1 thing I learned about corporate innovation is the importance of the leadership’s conviction in innovation. Implementing tech solutions often requires close collaboration across various internal business units, top-down commitment makes sure we can engage employees at all levels to act. When we planned for UrbanLab, we knew early on we had to engage our senior leaders as much as possible. The best way is always to prove the value of technology through real-life cases. Ping An has spent billions in R&D and has been a pioneer in tech innovation, especially in fintech and insurtech. We have an Innovation Center located in our headquarters in Shenzhen where we showcase our cutting-edge technologies. Our CTO invited the COO of JLL China and Swire’s office director to visit our Innovation Center. That helped our partners realize that we are committed in innovation and want to partner to push things forward in real estate. Also, the perk of having partners is to learn from each other. Swire has already built a New Ventures team to help internal innovation, and JLL is investing heavily on proptech globally, not to mention it held a few large-scale proptech forums in China. It was truly an open collaboration for innovation – the three co-founders of UrbanLab constantly shared our approaches and best practices. Personally, UrbanLab has been a rewarding experience. I learned a lot of important lessons on how to facilitate communication between internal teams and technology firms. I am excited about the journey ahead as we all know real estate remains to be one of the least digitized industries. [i]
What have China’s proptech companies done in response to the coronavirus? I can speak of examples from our cohort companies. QuantUrban (quanturban.com) does data visualization and analytics for cities by collecting information online. They mapped out where the infection cases were within the cities as the pandemic spread. Users are notified of the risk exposure of a building or a community. Palmap specializes in indoor navigation and mainly for hospitals. They utilized their connections with the hospitals nationwide and developed a platform where patients could consult with doctors virtually first about their symptoms and then be matched with a hospital with available proper treatment. Turing (turingvideo.cn) is a video analytics firm who developed mask recognition algorithm to detect and alert users when people did not wear face masks where it was mandatory.
How did you get into PropTech investment? I used to work in real estate finance as an underwriter in Canada. I came to New York, the center of real estate, to study my master’s degree in real estate at Columbia University. Zach Aarons, one of the co-founders of MetaProp, was one of my professors. He led me into the industry through his class on proptech. I was intrigued by how much value technology can unlock for real estate. I later took an internship with MetaProp and helped them do some research about proptech landscape in China. I also had the opportunity to attend their cohort meetings and meet with tech founders and investors. After I graduated from Columbia, I interned with Fifth Wall. At Fifth Wall, I received a full exposure of the business – outreach for fundraising, underwriting proptech startups, providing innovation strategy consultancy to their LPs. I appreciate to have learned real estate innovation from the top down approach, i.e. what pain points the end users have and what solutions could help. While I was cultivating business relationships for Fifth Wall, I got in contact with Ping An, who was building their digital real estate team. I decided to join and to see the Chinese tech market with my own eyes after conducting extensive research in the US.
What resources do you follow to keep up with the latest technologies? Being bilingual, I have sources from both sides. My go-to news and deal sources are TechCrunch, Fortune’s Term Sheet and 36Kr (36kr.com) in China. For proptech in particular, I used to write articles for Propmodo and I still follow their news. I also follow proptech-focused VC firms and read about their thought leadership. A lot of the intelligence comes from speaking to people as the proptech industry is still relatively small in both the US and China. Through my job, I was fortunately enough to visit many real estate firms in China to get first-hand information. Top-tier Chinese real estate companies have started to undergo digital transformation internally. For example, Vanke (vanke.com) has built in-house data analytics system to inform land and property investment decisions. Country Garden (bgy.com.cn) is spending billions to build various types of construction robots. Evergrande (everagande.com) is investing in new energy vehicles.
Edited and condensed for clarity.
[i]On June 23, 2020, UrbanLab published a white paper “Unlock the possibilities in PropTech: An Overview and Lessons from UrbanLab” where more details and lessons from the first proptech accelerator in China has been shared.