Shulou(Shulou.com)06/01 Report--

58.com reported total revenue of 4.258 billion yuan in the third quarter of 2019, up 17.4% from a year earlier and exceeding expectations, while its third-quarter net profit was 791.6 million yuan, up 9.0% from a year earlier. At first glance, 58.com 's performance in the third quarter was steady and there was nothing wrong with it. But compared with 58.com 's second-quarter data, the growth rate of net profit of 509.75% is only a fraction of that of the previous quarter, and it is not too much to say that it is a cliff decline.

The dark tide of decline in sound financial results

Founded 14 years ago, 58.com 's business has spread to every corner of people's lives. On the encyclopedia, 58.com has a wide range of materials: "58.com is the leading life classification information website in China, which publishes a large amount of life information free of charge." provide a variety of life information services, such as house search, job search, second-hand goods trading, second-hand cars, 58 group purchases, business yellow pages, pet ticketing, travel, making friends and so on. "

58.com is ambitious, but he is like a snake that wants to swallow an elephant. In the end, the loss outweighs the gain.

At the annual meeting in early 2019, 58.com CEO Yao Jinbo said, "the layoffs of Internet companies are a sign of not managing their emotions well." In the middle of the year, "will be demoted by the end of the year or 10% of the vice president will be hired." Obviously, 58.com 's "big and comprehensive" offensive has been unable to support the ambition of a middle-aged information classification website.

Recent financial report data also exposed the bottom of 58.com. According to the financial report for the third quarter of 2019, 58.com 's total revenue reached 4.258 billion yuan in the third quarter, up 17.4 percent from 3.6268 billion yuan in the same period last year and exceeding the company's forecast of 4.2 billion yuan. The net profit belonging to common shareholders was 791.6 million yuan, an increase of 9.0 percent compared with 726.2 million yuan in the same period last year.

Judging from the revenue in the third quarter alone, 58.com 's performance in the third quarter is satisfactory, but if you look at other data, you can see at a glance the weakness and tiredness of middle-aged 58.com.

First of all, 58.com is confined to the dilemma of traffic acquisition. As an information classification website, the number of members of the website is closely related to 58.com 's revenue, the more active members, the more income of the website. In the third quarter's financial results, 58.com and Anjuke had about 3.6 million paying members, up only 3.0 per cent from a year earlier. The income from member services was 1.1927 billion yuan, an increase of only 1.0% over the same period last year, and only 0.75% month-on-month growth.

Secondly, the decline of ultra-high gross profit margin year by year is also an inexplicable situation for 58.com. 58.com has maintained a gross profit margin of around 90% since its listing, while 58.com 's gross profit margin has been declining since 2019, from 90.2% in the first quarter, 89.5% in the second quarter to 88.2% in the third quarter. Compared with the gross profit margin of 89.5% in the same period last year, although the gross profit margin in the third quarter of 2019 can be maintained at more than 80%, it is a fact on the table that it continues to decline.

At the same time, 58.com 's revenue growth is also gradually shrinking. Although 58.com 's total revenue reached 4.258 billion yuan in the third quarter of 2019, there was a 17.4% growth rate compared with the same period last year. But revenue grew by no more than 30% in the year to the third quarter of 2019, which is clearly slower than the previous growth rate.

Under the circumstances that all the data are not satisfactory, the dilemma faced by 58.com is far more difficult than imagined. The "loopholes" under the steady financial report have made 58.com 's long-term accumulation not easy to solve, and the muscles and bones that support him are not as healthy as they seem.

58.com, "plagued by all kinds of diseases"

58.com rang the bell on the New York Stock Exchange on October 31, 2013. In 2015, 58.com acquired Anjuke and Zhonghua Talent one after another, and merged with Ganji.com in April of the same year. After a long conversation between Yao Jinbo and Yang Haoyong, founder of Ganji.com, Yao Jinbo finally got what he wanted.

Yao Jinbo stayed, and Yang Haoyong led his team to run away to create Guazi. Strong competitors become their own family, and after the merger with Ganji.com, 58.com has become the leader of the information classification website, and the scope of business is constantly expanding.

However, it is not a good thing for 58.com to sit alone. 58.com 's "big and comprehensive" offensive in recent years has expanded his volume, but due to inaccurate user positioning, blind expansion has led to increased marketing spending. In the third quarter of 2019, 58.com 's sales and marketing expenses were 2.1771 billion yuan, an increase of 13.4 percent over the same period last year.

As an information classification website, having a large amount of accurate information is the basis for the formation of 58.com 's core competitiveness. While the source and release of information often require a large number of user groups, 58.com 's early strategy of exchanging money for traffic obviously does not work when the Internet traffic ceiling has peaked, and the problem of getting customers is in front of them.

It never rains but it pours. 58.com, who urgently needs a large amount of traffic, the supervision and service of the website are not in place, resulting in 58.com 's high complaints. 58.com, as an information classification website, is gradually losing his reputation.

58.com, whose "foundation" is not reliable, is also having problems with his large and complete business.

1. Online recruitment deadlock

Recruitment business can be said to be an important part of 58.com, Yao Jinbo once made it clear: "in the future, 58.com 's two core business housing and employment will continue to deepen services." In the "Quarterly Monitoring report on China's Internet recruitment Market in the third quarter of 2019" released by Analysys, 58.com 's market share reached 37%, still up from the second quarter, ranking first in the recruitment industry in a row.

It is true that 58.com 's recruitment business does occupy the leader of the market at present, but in the long run, it is difficult to say whether 58.com 's recruitment business can continue to occupy the throne of the recruitment market.

First of all, 58.com recruitment business is currently mostly oriented to the blue-collar market, and most of the recruitment positions on its website are more basic positions. While job seekers in the blue-collar recruitment market tend to apply for jobs offline or introduced by acquaintances, there is still a certain threshold for Internet recruitment among the blue-collar class.

Secondly, the cake of the blue-collar market is attractive but difficult to eat, and the problems of information asymmetry and how to ensure the true information are inextricably solved. As a result, job seekers are often difficult to get in direct contact with recruiters, but are charged a lot of service fees by offline intermediaries and labor dispatch companies. 58.com 's recruitment products occupy a traffic advantage in the blue-collar recruitment market, but the false information of its platform is also affecting the trust of users.

At the same time, compared with other recruitment markets, the blue-collar recruitment market still has the problem of how to increase the payment rate. The added value of 58.com 's recruitment business is simple compared to established online recruitment platforms such as 51 job and Zhaopin. In the face of the difficulty of charging for small and medium-sized enterprises, 51 job chose the Up-Selling strategy and did not gnaw on the hard bone of sinking the market. How to improve their own recruitment value and increase users' willingness to pay is also a difficult problem that 58.com urgently needs to solve.

As a leg of 58.com 's progress, it is very important whether online recruitment can break the deadlock faced by the blue-collar recruitment market.

two。 The problems in the real estate business have accumulated for a long time.

Yao Jinbo's original intention to carry out 58.com 's real estate business stems from the anger that he was cheated out of money by a real estate agent when he was a foolish young man, Beijing drifters. Unintentionally insert willow, now the real estate business has become 58.com 's income structure in addition to recruitment another important business. In the third quarter of 2019, 58.com and Anjuke had about 3.6 million paying members and a member service income of 1.1927 billion yuan.

58.com 's real estate business has grown into a beast, but the interior of the beast is being eroded bit by bit. 58.com Cheng Ye flow failure also flow, the rapid expansion of the number of members has brought it a huge flow and revenue, but it is also followed by the multiplication of post messages, audit supervision is not strong enough to appear false housing information.

The current development of 58.com 's real estate business is likely to run counter to Yao Jinbo's original intention.

At the same time, with the strict supervision of real estate-related policies, some real estate companies continue to have problems. In December last year, Fujian Pan-Union Real Estate was poorly managed and filed for bankruptcy; in February this year, Phoenix Zhongke Real Estate Agency was exposed for defaulting on customer deposits; and in August, Fuzhou Dawei Real Estate went bankrupt.

With the gradual rectification and reform of B-end companies, the number of cooperative enterprises with 58.com has decreased, while the corresponding usage of C-end users is also difficult to pick up.

The fatal flaw of 58.com 's real estate business also lies in the business model. 58.com 's real estate business mostly depends on real estate intermediary companies, and its own industry is almost non-existent. The consequence of highly relying on intermediaries to drive traffic is that 58.com has to pay a huge amount of advertising fees to attract B-end companies. In addition, the current trend of combining offline services and online traffic in the real estate industry has also had an impact on 58.com 's business model.

3. Financial business is easy to step on mines.

When there were difficulties in both online recruitment and real estate business, Yao Jinbo began to pin his hopes on another carriage to pull 58.com 's huge body.

58.com 's financial sector was established in 2014, and Yao Jinbo said in 2015: "if we want to integrate finance into 58 business scenarios like air and water, it is the users who will eventually serve." Then, 58.com made efforts in Internet finance. In July 2018, 58 Finance received 400 million yuan in round A financing.

With the support of capital, 58.com has successively produced P2P network loan, used car phased business, loan supermarket and other business through self-management or equity participation. Corresponding to the launch of 58 loans, 58 car installments, 58 credit cards, 58 cash cabinets for financial management. In August 2018, it launched a cash loan product 58 easy to borrow, claiming that 3000 yuan is the maximum amount, which can be borrowed and repaid as well as ant flowers.

Under the huge layout, 58 Finance did not succeed in pulling 58.com as Yao Jinbo expected.

On October 17, 2018, 58.com announced the early settlement of 58 cash cabinets on his own P2P platform, saying that third-party institutions would be introduced to dispose of existing assets. And the participation of another P2P platform, "look at the wallet", has not improved much. And with the "three downwards" policy chutai of the financial industry, many P2P platforms have been withdrawn, and P2P platforms will be completely banned in Chongqing, Sichuan, Hunan and other places.

In addition to the related policy implications, 58 the operational problems of finance have pushed itself to the brink. It is easy to borrow 58 on the black cat complaint platform, and the number of complaints has reached 84, of which words such as "violent collection", "false propaganda", "difficult to repay" and "misuse of interest fees" appear frequently. In addition, the incident of violent collection of 51 credit cards and impersonating public officials in October this year has been investigated many times by the police.

58 how does finance go on? Can we go on smoothly? 58.com needs to think about it.

4. The second-hand trading business is drifting away.

Yao Jinbo said before: "if you have an excellent competitor, you dare not relax." fortunately, Haoyong is the best competitor I have ever seen. Thanks to Hao Yong and going to the market, he let me know what I didn't do well. "

After 58.com and Ganji.com merged, Yang Haoyong led his team to founded Guazi, in which 58.com holds a 46 per cent stake in Guazi, and the two go hand in hand. But in the face of interests, the friendship that once made the sea difficult for water has also turned into nothingness.

58.com disclosed in his 2018 annual report that he had signed an agreement on February 28, 2019 to sell part of his stake in Guazi parent company to a third investor for a total price of US $713.6 million, and instead reached a cooperative relationship with Guazi's longtime rival Youxin.

With the used car industry surging, Guazi's C2C model has become cautious in front of Youxin's B2C model. "buyers spend less, sellers make more money" can be seen in the advertising words, Guazi's profit point is very limited, whether to achieve profit is a difficult problem. And Youxin from the B2B model to the B2C, B2B model, last year is to launch a "national purchase" this very popular business.

58.com 's investment in Youxin takes a fancy to the growth space of the national purchasing business and the development of Youxin Finance. Youxin once declared: "National purchase is the business model that is most in line with the current development stage and characteristics of the domestic second-hand car market, and can bring value to second-hand car consumers." in Youxin's view, the most important thing at present is to "make use of all available resources and opportunities" to promote "national purchase".

In addition to Guazi, 58.com also has a personal second-hand trading platform "Zhuan".

However, whether the "turn" can continue to operate has little to do with 58.com. First, it is difficult to win in the face of strong rivals 58.com, second-hand trading platform, there are Ali as the back of Xianyu, and JD.com reached cooperation with the love of recycling. Compared with the two, it will take a long time to fight an uphill battle on how many markets you can get. Second, at present, the transfer has been transferred to the big financier Tencent, which received an investment of US $200 million from Tencent in 2017. In other words, in the competition of the second-hand trading platform, it is already a war between Alibaba, Tencent and other giants, and the relationship with 58.com has become weaker and weaker.

Encircling and suppressing 58.com

58.com is the leader in the comprehensive classification information platform, and there is almost no comprehensive classification information platform equal to its volume. But such a strong look more like "virtual strong", 58.com traffic mainly depends on the 58.com website as the main platform and APP, while 58.com split out of 58 to home, good rent, wealth cats and other products are difficult to shoulder the responsibility.

In each subdivision track, 58.com has to face a lot of competitors, especially in online recruitment and real estate business.

On the one hand, in the online recruitment industry, old players fly up, and new players emerge one after another.

According to the data of the National Bureau of Statistics, of China's 900 million working population, about 400 million are blue-collar workers. The market size of blue-collar recruitment is twice as large as that of white-collar recruitment. The market valuation of blue-collar recruitment in 2018 exceeded 300 billion yuan. At present, the proportion of blue-collar workers born in the 1980s and 1990s has exceeded 56%, and the proportion of accepting online recruitment is increasing.

There is still room for digging in 58.com 's blue-collar recruitment market, and the huge market makes capital ready to move. According to the data of Yiou.com, the number of blue-collar recruitment companies in China reached 103 in 2018. It is reported that another life service giant, Meituan, is testing a product called "steamed bread direct hire". It uses its original business advantages to carry out relevant recruitment services for businesses in catering, hotels, leisure and entertainment and other industries. 58.com is the biggest competitor in the future.

On the other hand, online recruitment experts such as clouds and in the real estate business, 58.com 's pressure is not small.

In June 2018, 58.com established the Real Estate Alliance with 21st Century Real Estate, I Love my Family, Central Plains Real Estate and other real estate brokerage companies. But Lianjia did not join them, but its product "shell looking for a house" expanded rapidly, and the main "real housing" feature dealt a heavy blow to 58.com. In April, Anjuke sued the shell for finding a house, demanding compensation of 90 million yuan. The competition between the two is extremely fierce. And recently, a number of real estate companies have been listed in the United States, 58.com wants to live in peace, it is no longer possible.

In April this year, 21st Century Real Estate announced that it would cooperate with Shell to find a house, which affected the cooperative relationship of the "Real Housing Alliance" led by 58.com. Then in early June, the news that 58.com and Anjuke banned 21st century real estate came out. Soon after, Zhang Zhihong, COO of Fangtian, said, "We were the original match for 20 years, and finally found that it was still the original match." It implies that the relationship between real estate and real estate in the 21st century has regained. Then, the 21st century real estate and real estate world officially announced cooperation, 58.com 's partner and one less.

Open branches and scattered leaves and add to the sea

58.com involved in many fields, but also split out a lot of products, but there are many products, 58.com can really add new vitality still failed to appear. In the face of the embarrassing situation, 58.com first chose to follow the trend: sinking the market. But 58.com chose to sink far more than other Internet giants, townships rather than third-and fourth-tier cities. Sinking the market can dig gold, but it is not so easy to pry.

With the sluggish situation in the sinking market, 58.com chose another way out-- going out to sea.

On Sept. 11, 58.com announced that Zhou Hao, the first financial officer, would be transferred to president of international operations. Zhou Hao will be fully responsible for all 58.com 's international business, covering overseas strategic planning, team building, market opening and other tasks.

Yao Jinbo said: "with the sustained and steady development of 58.com 's domestic business, we hope to make use of our deep understanding of classified information business models and leading technological advantages to strategically develop our business in key overseas markets. Zhou Hao has groundbreaking vision and rich international experience, no one is better suited to play a leading role in overseas development."

This is the first time that 58.com has established a key position in the international business, but can going to sea really allow 58.com to break through the siege?

In the face of different regulatory policies abroad, the policy support that foreign-funded enterprises can get is generally not comparable to the difficult problems of local enterprises; and in the face of countries with different markets, cultures, and systems, 58.com should also think about how to open overseas markets. after all, the problem of "disobedience" among overseas enterprises can be found everywhere.

Ofo ofo went to Australia and was ordered to clear the scene within 60 days. BellaBuy once made a high-profile bid for wish, positioning the European and American women's market as a high-end brand, but it stopped operation at the beginning of 2016; in the hot domestic "Arena of Valor", the European and American operation team of the international version of "Arena of Valor" was dissolved in May this year.

Going out to sea has become a craze for Chinese Internet companies, but how many can really stand firm in a foreign country? Middle-aged 58.com, how much courage to face overseas storms, whether to break through the siege is still unknown.

Conclusion

As a giant of domestic information classification websites, after the merger and acquisition of Ganji.com, 58.com can be said to be seeking defeat alone. But it is precisely because of this that 58.com lost his fighting spirit when he was tired. From 2015 to the present, 58.com 's business structure, in addition to online recruitment and real estate business, has not been able to hatch a powerful carriage.

On the contrary, 58.com 's own internal problems are accumulating more and more. From the "magic website" to the "fraud website", how many points can Yao Jinbo have left when he founded 58.com? While 58.com is looking for a new way out, it is also urgent to solve the old diseases, otherwise long-term accumulation will not be easy to solve, and disasters and blessings will only happen overnight.

Article / Financial Foreign Reporter Lin Yafan, official account ID:jrwaican

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