Change has already begun to unfold. KE Holdings announced this morning that starting in June, its "Boxue" training program will be upgraded into a comprehensive "Service Provider Certification System," establishing five competency levels from L1 to L5. The L1 level is designed for newcomers, and once the exam is passed, it does not need to be retaken. Levels L2 to L5 are optional, allowing service providers to voluntarily apply for upgrades based on their career development needs. All certification exams are free of charge. This certification is available to all 500,000 service providers on the platform, with the company covering annual operational costs exceeding 150 million yuan. The initial pilot will launch first in Beijing, followed by a gradual nationwide rollout.
"The level of detail in this reform is unexpected," remarked a Beijing Lianjia agent with eight years of experience, describing the recent changes within the company. Beijing is the primary focus for KE Holdings' current reform initiative. Recently, this agent noticed that repeated QR code scans for property viewings are no longer required, mandatory assessments for corporate WeChat addition rates have been removed, and even the daily "screenshot tasks" have been eliminated. "Suddenly, there is time to genuinely consider clients' real needs, rather than worrying about whether daily targets are met," the agent added.
These frontline experiences reflect a top-down organizational restructuring. At the end of March 2026, KE Holdings' Chairman and CEO Peng Yongdong issued a company-wide letter initiating the largest organizational transformation since the company's founding. The primary goal is to respond to evolving consumer demands, becoming a truly "consumer-centric" organization in the AI era, while also addressing issues of "big company bureaucracy." This transformation is akin to re-answering the fundamental question: "What kind of company is KE Holdings?"
"If we cannot fundamentally change this industry and improve the living conditions of service providers, our existence holds little value," Peng Yongdong stated during an internal communication last October, reflecting a profound existential inquiry. Recently, as the responsible leader, Peng issued eight documents announcing the most extensive organizational restructuring in KE Holdings' history. He personally leads the initiative as director, declaring, "I am fully responsible for this reform."
This reform is not superficial; it genuinely impacts both management and frontline personnel, aiming to reconstruct KE Holdings' collaborative processes and business logic. Why has Peng Yongdong, who once faced controversy over "exorbitant annual compensation," chosen this moment to step forward and lead KE Holdings in rediscovering its "raison d'être"?
A Reform with "No Alternative" Influenced by technological advancements, many industry norms are being rewritten, and the real estate brokerage sector is no exception. If AI tools can perform some tasks traditionally handled by agents, how can offline intermediaries build stronger competitiveness? Additionally, after five years of market adjustment, the property sector has yet to return to its previous peak. The new home market is shrinking, secondary home prices are declining, and property transactions are becoming increasingly complex. For agents accustomed to a rising market, the old "information intermediary" model no longer meets the industry's actual needs.
KE Holdings has already sensed this "crisis." Addressing such drastic market changes requires internal organizational adjustments. On March 29 this year, KE Holdings made a significant decision to launch its largest-ever organizational restructuring. For the first time, a Group Transformation Management Committee was established, a "General Cadre Department" was formed, "ineffective metrics" were reduced, and "non-essential positions" were streamlined. Beijing Lianjia also appointed three Chief Customer Officers for the first time. This large enterprise is dismantling internal barriers.
The reform aims to simplify various metrics, allowing those who create real value to get closer to consumers. The organization will revolve around consumers, becoming more agile and flat. All managers must engage more deeply with frontline operations, directly participating in business activities. This approach aims to drive KE Holdings' comprehensive transition from a transaction platform to a community living service platform.
Having emerged from the rough-and-tumble era of real estate, KE Holdings is no stranger to this kind of "internal surgery" style reform. In 2014, Lianjia expanded beyond Beijing; in 2017, it implemented a platformization strategy, leading to the launch of KE Holdings. Over the past two decades, from Lianjia to KE Holdings, this industry pioneer has, through initiatives like "Real Listings," "No Price Gap," and the "ACN Cooperation Network," helped real estate agents become respected service professionals. But as industry tides shift and the real estate market pie visibly shrinks, KE Holdings once again faces a critical juncture for reform.
This time, however, the situation is different. If past reforms occurred during the industry's "wild" but upward-trending phase, aimed at expanding the pie and reshaping the sector, the current transformation is a necessary response to a major turning point in real estate and internal organizational challenges. Without proactive change, the company risks being more deeply affected by industry cycles.
"Consumers are changing, the industry is changing, technology is changing. If we remain stuck in the past, we will only drift further from consumers and from our original purpose," Peng Yongdong stated bluntly in his internal letter. "We have no choice."
Relieving the Burden on Frontline Agents As a leading national living service platform, Lianjia has been established for 25 years, and the KE Holdings platform has been operational for 8 years. By the end of 2025, the number of employees reported in financial statements was nearly 120,000, not including external cooperative agents. As the organization grew, some issues became "typical."
Frontline agents were the first to feel these problems. A Beijing Lianjia agent noted, "Before this reform, we had to clock in three times a day, report our location with a photo at noon, and maintain watermarked records for the entire viewing process. Many metrics had limited impact on closing deals but were mandatory." A more direct complaint was: "It felt like we were serving metrics, not clients."
Behind these voices lies a recurring phenomenon in large corporations: metrics replacing goals, and processes substituting for judgment. In the short term, metrics are controllable. Long-term, however, this reflects a strategic laziness. A Beijing Lianjia store manager indicated that under such mechanisms, agents prioritize "completing metrics" over "completing transactions," resulting in declines in both new and secondary home business at their store.
A KE Holdings insider直言: "When an organization increasingly relies on rules to patch problems, each fix adds new complexity. Over time, the system becomes bloated, and the organization tends toward mediocrity." This seems an inevitable fate for large organizations, but for Peng Yongdong and KE Holdings, it is a puzzle that must be solved.
KE Holdings has taken the first step in its transformation: relieving the burden on frontline agents, reducing middle layers, and shortening the distance between the organization and its customers. KE Holdings' management at all levels has also begun "moving down." In some cities, regional directors have started creating property introduction videos themselves; Shanghai Lianjia's new head, Huang Yueping, set up a "Lao Huang Mailbox" with contact information posted in stores, allowing direct feedback from frontline agents.
A Shanghai Lianjia store manager commented, "I see this as very positive. It shows agents that the organization is willing to listen and provides an open channel for expression. I understand many have already written to Lao Huang."
Betting on Long-Termism for Significant Results Currently, to ensure that "doing right by consumers and agents" does not become an empty slogan, KE Holdings must first challenge its own vested interests and choose between "immediate gains" and "long-term planning." This is not the company's first such endeavor. In its previous self-reinvention, despite facing skepticism and opposition, the heavily offline-focused Lianjia ultimately transformed into the industrial internet platform, KE Holdings. As the driving force behind KE Holdings—a role akin to a founder—Peng Yongdong reaped substantial rewards from that "long-termism."
The current market environment means KE Holdings can no longer rely on favorable conditions. The effectiveness of this reform will take time to assess. For real estate agents, professional and even survival challenges will persist in the short term. Amid various discussions, the contrast between the high-salary controversy surrounding KE Holdings' executives and the survival situation of agents has been amplified in public discourse.
However, before questioning whether KE Holdings' executives are "profiteering from power," two key issues regarding management compensation need clarification. First, the so-called "exorbitant compensation" for KE Holdings' management primarily stems from shares granted before the company's Hong Kong listing, a compliance measure to meet HKEX standards. HKEX regulations for WVR structures explicitly require that controlling shareholders with super-voting rights hold at least 10% of economic interest—a core regulatory threshold. At the time, as Peng Yongdong held only a 3.6% economic interest through original shares, below the exchange's requirement, KE Holdings granted him 71.824 million restricted Class A shares, while Shan Yigang received 53.87 million restricted Class A shares, totaling 126 million shares.
Under accounting standards, these shares are amortized annually using the "straight-line method" and recorded as compensation expense. Therefore, the core nature of this "massive equity incentive" was a mandatory pre-listing compliance action, also serving as a mechanism to align management's long-term interests with the company's and ensure governance continuity. The compensation figures in KE Holdings' financial reports represent non-cash accounting expenses, not actual cash outflows.
Furthermore, both Peng Yongdong and Shan Yigang received "restricted shares." Excluding share-based compensation effects, Peng's cash salary for 2025 was approximately 9.378 million yuan, within normal industry levels. As of end-2025, within KE Holdings' overall equity structure, Peng held about 4.9% of shares and approximately 22.0% of voting rights; Shan held about 2.8% of shares and 10.0% of voting rights. Combined with the voting rights authorized to Baihui Partnership from Zuo Hui's family trust, core management controls about 49.9% of voting rights, indicating a stable ownership structure and governance model.
Currently, as KE Holdings transitions from a property transaction platform to a community living service platform, advancing AI technology empowerment and deepening ecosystem synergy, management must maintain strategic focus and avoid short-term profit-seeking. The current ownership structure helps shield management from external capital pressures, allowing concentration on businesses requiring "patient effort."
Returning to the current reform, Peng Yongdong, as the lead, has not chosen to "rest on his laurels" despite holding significant equity. Instead, he confronts industry realities head-on, initiating a long-term oriented reform. For KE Holdings, years of equity design have deeply aligned senior management with the company's fate: the reform's outcomes will directly impact company performance, stock price, and management reputation.
Seeing Every "Individual Person" Being good to clients and good to agents has always been a emphasized principle for KE Holdings. But in today's rapidly changing real estate landscape, how can consumer needs be better met? How can agents provide more professional, long-term oriented service? These are questions Peng Yongdong continually ponders and the初衷 behind KE Holdings' recent actions.
On the company's anniversary day, April 23, KE Holdings announced details for the executive donation of 10 million shares (equivalent to over 400 million yuan in cash) to the "Healthy Home Shell Guardian Fund." It also issued one-on-one exclusive guardian cards to over 500,000 KE Holdings and Lianjia employees and industry service providers. This marked the formal implementation of the donation pledged earlier this year. By April 25, more than twenty industry service providers had submitted applications, with two already approved and receiving 20,000 yuan critical illness funds. One Beijing-based provider was diagnosed with non-Hodgkin lymphoma in March and is still hospitalized; a Chengdu Lianjia provider, besides the critical illness fund, also qualified for the "Family Warmth Support Fund" and "Children's Education Fund," with the remaining 180,000 yuan guardian fund under review and expected within 10 working days.
In April 2025 and February this year, KE Holdings' co-founders announced donations totaling 800 million yuan in shares over two consecutive years—equivalent to donating the amortized value of their shares from those two years' compensation. These funds provide health coverage, children's education support, and assistance for recent graduates within the living industry service provider community. Offering a safety net for frontline providers' health, family, and education helps ensure stability during industry fluctuations, allowing agents to focus on their careers with greater peace of mind. Through these substantial donations, the two leaders have once again demonstrated the shared destiny between KE Holdings' management and its agents.
Today, this large living service platform and its connected agents are learning to see every "individual person." In the past, KE Holdings' development might have focused on short-term transactions: number of clients, market share, average order value... analyzing operational results through these metrics was a natural mindset for a large publicly-traded company. But as KE Holdings reorients towards being "consumer-centric," community and long-term services related to "home" become increasingly important. Agents on the platform must also keep pace with change, moving towards greater professionalism and long-termism.
The tech wave will not replace traditional agents but will foster more specialized roles, such as buyer advisors, seller representatives, cloud-based property managers, and school district experts. KE Holdings' management is now focused on helping agents adapt to these trends and achieve professional transformation. As the organization shifts from a "transaction platform" to a "service platform," it recognizes that its true core asset is no longer just property listings or traffic, but the hundreds of thousands of individuals providing services on the front line.
For KE Holdings, this reform is far from over. But at least for now, it has made a choice: to return its most important resources—people, time, and decision-making authority—back to the places closest to its consumers.