A Research On The Transition Of WK Group Asset-Light Business Model

The real estate industry,as the major contributor to the nation’s development,has been risen for 40 years since the Chinese economic reform from the 1980s.However,based on the recent government policy and the narrowed market gap,traditional real estate company is facing severe pressure from the turnover ratio,land expense,tax expense,etc.Most of the companies are seeking for the asset-light business model.WK group,the leader of the real estate industry in China,has started the transition of the asset-light business model.There’s an excellent opportunity for other companies to learn from the analysis and research of the WK group’s transition.This research uses the case study method,include but not limited to the reason of the transform and implementation of the asset-light business model,The reasons include in business credit incitement,financing channel expansion,profitability upgrade,and value chain value-added,the specific implementation methods and requirements.The research summarizes four primary methods of WK group’s primary model,including funds offer a financing method,small share capital to control management rights,construction of supporting urban operators,and custom city service provider,and how these different methods affect each other.Also,this research also analyzes the result of the implementation from the accounting perspective and non-accounting perspective.Based on the research,WK group has already fulfilled the initial requirements of the implementation.WK group’s asset-light business model is combined with the foreign advanced operation model and the specific Chinese market.They have successfully achieved the transform from the real estate developer to the real estate operator This research could provide significant help for building the theory of the asset-light business model.And a guideline for the transform and implementation of the asset-light business model.