Now, Liu is betting his patience will be rewarded. He's gambling that the Internet will be a powerful competitive tool as China's embryonic private property market finally opens up. The strategy: A clicks-and-bricks business model that combines a Web site and newspaper with real estate agents toting handheld computers. The free weekly newspaper insert provides mass exposure in a country where media outlets remains under government control but advertising packs a powerful punch. The Web site covers more properties than any of Liu's competitors, most of whom are small players. And the real estate agents piggyback on the New Media/Old Media strategy to help drive sales.
In a country where buying a home of one's own is the latest rage, the Net strategy could make Liu a standout. Last year, $4.4 billion of residential properties changed hands in Guangdong province's booming market, compared with virtually none a decade ago. Thanks to an aggressive government program that sells state-owned housing to employees, Liu estimates about 70% of Guangzhou residents now own their own apartments or homes. Most of these are buildings of mediocre quality, at best, that were sold to employees at rock-bottom prices by the state. Liu is betting that many of these first-time owners will trade up, and that the secondhand market, which accounted for just one-seventh of the total last year, will boom.
LURING TRAFFIC. Some prominent backers share Liu's vision. In May, the Hong Kong-based Hang Lung Development Co. property group invested $4 million for 50% of Liu's venture. "We're investing in the team and the person," says Ronnie Chan, chairman of Hang Lung Development. "We like to back people who know the market." Certainly, few people know the exploding property market in the southern province of Guangdong, adjacent to Hong Kong, better than Liu. His unparalleled database, built in the course of doing projects for government and private clients, includes virtually every project in the metropolitan Guangzhou area.
Together, Liu and Hang Lung have set up Guangzhou Top Home Technology Limited. A Web site, mytophome.com, woos Net surfers with everything from mortgage information to bank referrals to tips on interior decorating. This in a country where mortgage finance is still something of a novelty.
But Liu isn't counting just on a Web strategy. He's also set up a newspaper. It's a weekly free insert in a local business newspaper. Like the Web site, the paper has listings on virtually every major property development in the Guangzhou area, a city of 7 million people. Its aim: to drive traffic to the Web site and, above all, to the traditional real estate agency.
PAPER AND PIXELS. China is no different from the rest of the world, with advertisers rethinking the value of Internet advertising. So Liu's mytophome.com site is bundling Web and print advertising and selling them together. The paper started in March and is already break-even, thanks to property advertising. Liu figures that the Web operation will at least pay its own way by the second quarter of next year. "If the Web site were required to survive entirely on its own, it would be very difficult, if not impossible," says Liu. "But by bundling it with the newspaper, it does very well."
The final leg of the three-pronged plan -- the one where Liu expects to see real money -- is a traditional real estate agency that was set up in June. The biggest private agency in Guangzhou (there's a bigger state-owned agency), with 55 agents, it plans to grow to 80 or 100 agents by yearend. When some final software bugs are ironed out over the next month, all agents will have wireless handheld computers.
While handheld computers for Chinese real estate agents may sound like technological overkill, Liu figures that the wireless devices will cut his costs while allowing faster, better service. That's because the machines will help create a virtual office and obviate the need to give each agent a desk. As China's property market matures and the country lurches toward a market economy, Liu is convinced that he can use the Internet to transform the real estate business and put his company at the front of the pack.
ILL WIND BLOWS GOOD. The rough-and-tumble of bustling Hong Kong is a long way from Liu's commercial base in Guangzhou. Though he lives with his wife, a Hong Kong civil servant, and two children in the exclusive Peak district high above Hong Kong's harbor, Liu spends most of each week 100 miles away in Guangzhou. In Hong Kong, he is a university lecturer and the occasional author of scholarly articles on real estate issues. "He's an honorable man," says Hang Lung's Ronnie Chan, who has known Liu for many years.
Chan marvels at the memory of seeing Liu trying to find a taxi in a typhoon so that he could make it to the Kowloon train station for the early-morning commute to Guangzhou. Braving the storm paid off: Chan's offer of a ride paved the way for Hang Lung's investment. In Guangzhou, Liu often rises before dawn to play a quick round of golf before heading to the office. If mytophome.com pays off, he may be able to indulge in the luxury of a later tee time and to spend more time back in Hong Kong with his family. But for now, there's work to be done. Liu looks like he'll be rising early for some time to come. Clifford is Business Week's Hong Kong bureau chief.