Beike Chairman Peng Yongdong: True leadership does not come from scale

On March 16, during the Shell 2025 performance teleconference, Shell co-founder, Chairman, and CEO Peng Yongdong delivered a speech outlining his latest strategic thinking for Shell’s future development. Combining signals from Peng Yongdong’s internal letter at the start of the year, it can be predicted that Shell will gradually introduce more transformative initiatives in 2026.

Peng Yongdong stated that China’s residential market remains one of the largest and most valuable markets globally, but the underlying logic of industry development has changed. The era of relying on resource scale expansion driven by “people, stores,” etc., is coming to an end. The industry is entering a new stage centered on efficiency, professional capabilities, and customer value. Shell will also iterate itself around consumers’ higher-level needs.

In 2025, due to the overall industry environment, Shell’s business faced certain challenges. However, thanks to strategic foresight and continuous positive efforts in operations, the platform maintained stable growth. Financial reports show that Shell’s full-year net revenue increased by 1% to 94.6 billion yuan, with a net profit of 2.99 billion yuan. Under industry pressure, this performance reflects Shell’s business structure shifting toward more diversified, resilient, and higher-quality development. In Shell’s real estate transaction business, second-hand transaction volume grew by 11%, reaching a record high. The “non-real estate transaction business” reached a historic high of 41%, home renovation revenue surpassed 15.4 billion yuan, and leasing operations achieved profitability for the first time in a full year.

Reconstructing Products, Upgrading Real Estate Transaction Service Models

Shell’s strategic upgrade is a natural result of changing market conditions, shifting user demand structures, and platform development stages.

The core of this upgrade is that, based on data and AI, Shell will reform its service logic around customer value, creating more value to improve overall resource conversion efficiency and unit output. Moving away from the past model driven by the scale of people and stores, toward sustainable growth driven by efficiency and value creation.

In real estate transactions, Shell aims to upgrade transaction services into full-process “decision-making” services, encapsulating complex transactions into “settlement services” to enhance professionalism and certainty.

Specifically, in the existing housing market, Shell last year iterated its opportunity allocation mechanism, optimized service stratification, and provided better matching professional services for high-quality clients. In 2025, the platform completed 2.15 trillion yuan in existing home transactions. Second-hand transaction volume increased by over 11% year-on-year, reaching a historic high, with non-Lianjia transactions growing by 15%. These figures reflect the resilience of demand in the existing market and the platform’s model.

In terms of efficiency, non-Lianjia agents’ average second-hand transactions per person increased by 6% year-on-year, rising from less than 2 transactions in 2022 to over 3. In the direct-operated Lianjia business, Shell proactively optimized store networks and agent structures in 2025, focusing on high-efficiency capacity and core city operations. Shell is forming a more balanced and healthy structure between scale control and efficiency improvement.

In new home sales, Shell has begun shifting from “channel dividends” to “structural efficiency.” On top of expanding inventory and channel sales, Shell is driving sustained growth through structural efficiency improvements, including optimizing customer source structures, project structures, and service provider structures, as well as enhancing precise matching capabilities. In 2025, Shell’s platform achieved a GTV of 890.9 billion yuan in new home transactions, outperforming the market amid volatility.

Beyond real estate services, Shell’s home renovation and leasing businesses are increasingly focused on profitability quality and establishing sustainable, replicable operating models. Peng Yongdong believes this is a prerequisite for Shell’s new businesses to truly scale.

In home renovation, over the past year, Shell emphasized modular product systems and digital design, gradually consolidating design capabilities into systematic capacity, reducing service variance, and improving design efficiency. It also promoted supply chain integration and standardized delivery, improving customer experience and profitability. As a result, revenue grew steadily by 4.4% year-on-year to 15.4 billion yuan, with substantial profit margin improvements. Gross profit margin increased to 31.4%, up 0.7 percentage points year-on-year, and operating losses significantly narrowed.

In leasing, based on lightweight product iteration and refined operations, core service providers’ efficiency improved markedly, and single-unit profitability models were enhanced. AI capabilities are gradually embedded into key processes such as property inspection decisions, pricing support, rental management, and operational strategies, reducing operational risks, improving turnover efficiency, and optimizing cost structures.

With continuous platform efforts, leasing is gradually forming more stable profitability and cash flow characteristics. By year-end, managed rental properties exceeded 700,000 units, a 62% increase year-on-year. The business achieved profitability for the full year, with profit contribution rising to 8.6%, up 3.6 percentage points, significantly improving profitability.

“Human-Machine Collaboration” AI Strategy

Peng Yongdong believes that AI’s rise is becoming a new factor in upgrading the housing service industry. He states, “AI cannot be ignored; humans cannot be replaced.”

Real estate transactions are not standardized commodity trades but complex decision-making processes where rationality and emotion intertwine. In his view, AI will not replace high-value service providers; instead, it will amplify the value of those with high judgment, professionalism, and trustworthiness.

Therefore, Shell has chosen a “human-machine collaboration” AI strategy—maximizing AI’s role in handling rational tasks, allowing humans to focus more on emotional communication and strategic judgment.

Currently, AI is embedded in Shell’s core operational scenarios. For example, in real estate transactions, AI marketing assistants help agents automatically generate marketing materials and simulate real customer interactions to enhance professional skills.

In the future, AI will serve as a “co-pilot” throughout the customer lifecycle, including demand recognition, precise matching of buyers and properties, pricing support, and process automation. AI will help encapsulate professional capabilities, making them more generalizable and reusable.

Peng Yongdong also revealed in the internal letter at the start of the year that Shell will reform training and the “battle exam” logic to build a capability system for mastering new technologies. The company will allocate greater resources to support service providers willing to evolve and develop new skills.

Organizational Restructuring: Bringing Managers Closer to Consumers

In line with strategic changes, Shell is simultaneously optimizing organizational structure and upgrading capabilities. Peng Yongdong stated during the performance call that 2026 will be a year for Shell to refine service and organizational capabilities.

He believes that organizations exist not to manage metrics but to improve customer experience. Therefore, Shell is streamlining its organization, simplifying non-value-adding management layers, and pushing management down to better perceive and create customer value.

In his start-of-year letter, Peng Yongdong mentioned that Shell maintains an annual turnover rate of no less than 5% for senior management. This is not only to keep the organization lean but also to ensure resources are always in the hands of those who can truly create value for consumers.

He also emphasized the need to eliminate bureaucratic red tape that constrains frontline staff, truly empowering frontline partners with resources and “weapons.” The future organization must be consumer-centric, agile, and flat. Shell’s organizational structure, performance assessments, incentives, and resource flows will all be rewritten around the consumer.

All these efforts aim to improve organizational efficiency, bring the organization closer to consumers, and respond more sensitively to changing demands.

On the other hand, as the creator of the agent collaboration ecosystem, Shell has begun iterating and upgrading its platform’s ACN collaboration mechanism since the beginning of this year, including removing “transfer restrictions” to better support agent development. Peng Yongdong believes that the traditional top-down ACN management model has caused “entrapment,” and therefore, ACN must be iterated and upgraded. Shell must promote industry movement toward a new, harmonious, and open modern business ecosystem.

He firmly states that this path will challenge many deeply rooted interests and be extremely difficult, but it is unstoppable. Only by establishing a harmonious, open, and organically symbiotic system can the industry achieve sustainable development.

At the end of the performance call, Peng Yongdong reiterated that in 2026, Shell will continue to maintain a neutral market outlook: “In the face of China’s vast real estate market and the continuously evolving demand structure, what truly determines long-term value will no longer be simple traffic investment or manpower accumulation but a deep understanding of customer needs and the systemic service capabilities built around the customer’s entire lifecycle.”

“In this new cycle, true leadership does not come from scale but from capability. And the foundation of capability, we believe, is only one thing: continuously creating real, verifiable value for consumers,” Peng Yongdong concluded.