Classified websites are nothing new in China. The first one emerged in 2004, and around 2005 there were already dozens in local market. Besides independent sites, many portals have added classified sections to tap into the trend. But by now only several websites, Ganji, and Baixing survived and got bigger, which means these services collectively have a user base of 200 million and a market size of RMB 60 billion (approximately US$ 9.26 billion). Classified website is regarded as one of the fastest-growing internet business sector.

Different than C2C

When asked about what is the difference between classified website and C2C services such as Taobao ( China’s largest C2C website), Ganji vice president Xu Chen claimed that there was no essential difference between them, but classified sites users enjoy more fun. “At present Taobao’s seller rating system is much better than those of classified sites. But second-hand trading is quite different from the transactions on Taobao. On classified sites, many buyers and sellers trade second-hand items for fun, not just for making some money, and trading process is simple. If you want to sell an item you don’t need anymore at Taobao, you have to apply for an account first, and then follow certain procedures. For those who are not regular sellers, that sounds quite complicated. So why not just come to our website, publish a post without even signing in? ”

Xu also mentioned that many people like the “one-stop” service on classified websites. For example, a college student can look for a flat to rent, sell his used textbooks and check job opportunities at Ganji.

Revenue Model

You may think China’s classified websites are similar to Craigslist. Well, in some way it is, but the revenue model is quite different. An analyst claims that China’s classified websites make big money with ad sales, paid placement (if you want your post to appear at the top of the page, you need to pay) and franchise fee (allow franchisees to operate in different cities). Actually, Ganji is expected to hit US$ 100 million revenue in 2012.

Ganji spent rmb 400 millions on its TV ads this year, and CEO Jingbo Yao once said “we have never been short of money.”

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