China today lost the billionaire entrepreneur who pioneered modern brokerage services for millions of home buyers in the world’s largest residential real estate market.
KE Holdings announced that founder and chairman Zuo Hui had died “due to unexpected worsening of illness.” Zuo ranked No. 128 on the 2021 Forbes Billionaires List published in April; his fortune was worth $14.8 billion on the Forbes Real-Time Billionaires List today. KE’s New York-traded shares plunged by nearly 12% in pre-market trading today after the company announced his death. His age was listed as 50 in the company’s annual report last month.
In a cover story published in Forbes Asia in November 2020, the businessman shared insights about the impact of COVID-19 on the real estate market that have been present in the U.S. as well. “We were initially worried [about Covid fallout] but found that customers now spend more time at home and pay more attention to having a comfortable home,” Zuo said in an interview.
Mainland China, home to the world’s second largest number of billionaires today, didn’t yet have a single one back in 2000 when Beijing entrepreneur Zuo struck upon the then-novel idea of selling homes to individual buyers. It was a bold move, as the average GDP per capita was around $1,000 and a government policy that allowed private property ownership had been launched only two years earlier. “At the time, there weren’t many people buying their own homes,” Zuo said.
China has since become the world’s largest residential property market, as measured by gross transaction value, according to an estimate in a KE IPO prospectus last year, and KE has been in the middle of many of those transactions. While the global real estate industry is often split into distinct silos—brokers, developers, contractors, listing sites—KE is close to a one-stop shop, with hundreds of thousands of agents across the country. Its Housing Dictionary is China’s largest site by listings of residential properties—with over 220 million in its database as of last year, including maps showing details such as the location of hospitals, schools and shopping.
Last August KE raised $2.4 billion in an IPO and listed its ADRs on the New York Stock Exchange. From an IPO price of $20, the ADRs at one point went on to nearly quadruple to nearly $80. They were changing hands at close to $44 today upon news of Zuo’s death. KE investors include Sequoia China Capital, Softbank and Tencent.
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Zuo earned a degree in computer science in 1992 from what’s now called Beijing University of Chemical Technology—training that would help later when he went online with KE. After graduation, he took a series of sales jobs in insurance and other industries. In 1998, Beijing introduced reforms that encouraged individual ownership of property. In 2001, Zuo founded Beijing Lianjia, at first just a traditional brokerage. As a pioneer in the nascent real estate market, Zuo had an early-mover advantage, and was able to grow Lianjia into one of China’s largest brokerages. By 2018, Lianjia had offices and agents in 29 cities across China. That year Zuo also launched Beike, its flagship online platform, and created KE Holdings, into which he put Beike, Lianjia and another company, Yiju Taihe, which he had started in 2010 to offer property-related financial services.