AP celebrates 25 years of continuous differentiation
“DIFFERENTIATION is the key.” These four words have been the mantra for AP’s managing director, Pichet Vipavasuphakorn, and me from the day we founded the company.
AP has grown from a small player with nine-figure revenue into Thailand’s fourth-largest integrated property development company, with a portfolio of more than 200 detached-housing, condominium and townhouse developments worth more than Bt196.8 billion baht.
As we reach our 25th anniversary, our mission is to become one of the industry’s top three players by continuing to develop innovative housing solutions for urban dwellers and create living spaces that fulfil every lifestyle need.
Our road hasn’t been an easy one. Naturally, this makes me quite concerned for the young people who think they see a gap in the market, only to find once they have jumped in that the gap is actually a black hole from which there is no escape.
When Pichet and I see a neighbourhood that lacks a certain housing type, we usually look at each other and say, if we go in and try to the fill the gap, we will either have a best-selling product or find ourselves in a black hole.
Townhouses, condominiums and detached houses can all replace one another. We have built townhouses and beaten a competitor who offered detached homes just 2 kilometres away for the same price because our townhouses do a better job of meeting the target group’s needs. We have also had a competitor’s detached homes beat our townhouses simply because they had a better location.
The property industry is very detail-heavy. In some neighbourhoods, people want value for money and good space utilisation, but the definition of “good space utilisation” can vary from one person to the next.
Multigenerational families usually want their home to have ground-floor bedrooms and bathrooms for senior family members who can no longer climb the stairs. Young homeowners living alone or with their spouse tend to prefer multipurpose spaces, with separate offices for husband and wife on the second floor and a top-floor master bedroom with adjoining walk-in closet.
Thai-Chinese extended families, on the other hand, tend to want separate living quarters for each family member as well as communal spaces where everyone can spend time together.
Adding to the complexity, residents of two neighbourhoods only 5km apart could belong to totally different customer groups.
A deep understanding of customer behaviour is vital for developers, and I don’t mean just their day-to-day living patterns, but their hidden needs as well. Only when you understand all these can you have true product differentiation.
Continuous differentiation is a concept that AP tries to inculcate in our employees. Whether something has been done before is not an issue; the important thing is to do it when no one else is doing it.
Many of you may be wondering what differentiation we can come up with after 25 years. My answer is this: As long as global mega-trends continue to evolve, consumers will continue to change their behaviour and lifestyles. A question that we developers should ask ourselves is: Can we catch up with changing consumer behaviour and discern their hidden needs?
We always tell our product design team that what consumers like today may fall out of favour three months from now.
A few years ago, the property industry was going through a very scary period. New trends were coming in at a fast pace, making developers struggle to keep up. Today, we don’t design our products to suit customers’ current needs; we base them on customers’ living behaviour. Not many people want to live in a large home far from the city centre, and consumers are willing to trade off space size for convenient commutes.
The Japanese know this better than anybody, which is why we have entered a partnership with Japanese real-estate giant Mitsubishi Estate, who is going to be a major force in AP’s product differentiation.
There are many behind-the-scenes stories from AP’s 25 years that I want to share with you. In my next article, I will share the second key success factor that has helped us achieve steady and stable growth.
Anuphong Assavabhokhin is chief executive officer, AP (Thailand).