The battle between property site Zoopla and its new competitor, the estate agent-owned OnTheMarket is hotting up. Today Zoopla announced that it has lost 11% of its estate agent branch members over the past year as its younger rival has sought to lure them away.
OnTheMarket has a 'one other platform' rule, which means its estate agent members can only list their properties on that portal and one other. Given that Rightmove is the largest platform, it was anticipated that this would hit Zoopla the hardest, and that certainly looks to be the case now - OnTheMarket says 90% of its agents have chosen that option.
But Zoopla's CEO and founder, Alex Chesterman, certainly doesn't seem too worried. 'We believe that Agents' Mutual remains a short-term event and that its success will be determined by whether consumers engage with it,' he said. 'So far it appears to have got off to a very slow start with consumers.'
Whether that's based on a cool appraisal of the facts or just a symptom of die-hard entrepreneurial self-belief remains to be seen. What's certainly true is that Zoopla's appeal to consumers is appears to be growing – with a 14% year-on-year increase in traffic the four months to January, including a record 50.5 million visits in that month alone.
'According to Hitwise, over the last two weeks OTM has averaged 14,000 hits a day, compared to Zoopla's 1.4 million,' Anthony Codling, a property analyst at Jefferies, told the Telegraph - although OnTheMarket disputes these figures. 'Zoopla has more hits per day than there were housing transactions in 2014; whilst a number of agents may have left Zoopla, for now, it appears that the home buying public remain convinced of Zoopla's attractions.'
MT doesn't see any reason for that to change. Beyond some 'Early Bird' listings, OnTheMarket doesn't offer anything radically different to entice consumers and it's hard to imagine its marketing budget outstrips that of Zoopla, which is after all effectively a marketing business at heart. But OnTheMarket's having none of it.
'We are confident in becoming the number two portal within a year to replace Zoopla,' said its chief executive Ian Springett. 'Zoopla's reference in this morning's trading statement describing the launch of OnTheMarket.com as a 'short term event' demonstrates just how out of touch it is with the commitment of our member agents to create a superior market-leading, mutually-run, property portal.'
A big vote of confidence for Zoopla came from UBS, which said in an analyst note, 'If OnTheMarket fails (likely in our opinion) then a somewhat conservative upside case sees the [Zoopla] stock double from here.'
Codling did offer a caveat, though. 'In our view listings are key. Listings drive traffic, which in turn drives monetisation,' he said. But if Zoopla can hang on to enough estate agents to keep consumers coming back, then it seems likely that it can weather the storm.