Rumors had it that Ganji, the Chinese Craiglist will be cutting off its group buying arm with a downsizing of more than 600. In response to that, the Beijing-based company just rebutted the claim, saying will retain the business while some of its staff will be transferred to its new short accommodation service Mayi.com.

We first wrote about the debut of Mayi.com in last November. Ganji claimed then to invest US$ 20 million into the vacation rental service. Yang Haoyong, founder and CEO of Ganji seemed to have strong belief in the business, “It’s a typical O2O (online to offline) service as you pay online and then consume offline. We believe in the future of combining O2O and short-term rental and that’s why Ganji will be investing heavily into the market”, said Yang.

Both the group buying and short rental arms fall under Ganji’s ecommerce division. Ganji has repeatedly implied that it would put more focus on the Airbnb clone while playing down the importance of group buying effort from the inception of Mayi.com on. Wang Liantao, VP of Ganji once revealed that the marketing budget for the company’s group buying effort will be cut down to 60% – 70% lower than before.

According to the group buying market stats released by Tuan800.com, the daily deals aggregator slash market observer, Ganji Tuan made it to the Top 10 Chinese group buying services in terms of sales with a transaction volume of RMB 47.2 million in January of this year, but came 10th in the list, lagged behind its arch rival 58’s group buying business (8th, RMB 75.5 million).

Ganji’s move speaks to the dilemma in the market, everyone is working on it, none is making a penny yet. Zhang Tao, founder and CEO of Dianping said the Shanghai-based social rating site still has a long way to go before making money off of its daily deal service. Nuomi.com, the Renren subsidiary incurred a loss of over US$ 24.3 million in last year. Reading all the numbers, it seems that Ganji.com made some sense to shift its focus but doesn’t totally lose grab for the business.