Chinese Classified Sites Need a Change

The fever of Chinese classified sites started in 2005 when numerous Craigslist imitators flocked in. By 2007 there had been over 3000 classified sites. Not surprisingly, just in a year most players died of the fever and only 200 survived. Ganji, 58.com and Baixing weathered the ups and downs and now became the leading ones, but the “postwar landscape” is still tough for all of them.

Transition after the Group-buying wounds

In 2010, people saw opportunities in group-buying and very soon various Chinese Internet companies jumped into this game for it was regarded as a business with low entry barriers. Ganji and 58.com launched their own effort, but had never expected the competition to be this fierce that during which they scrambled for money and then raced bleeding them.

The two, namely Ganji and 58.com have been competing with each other since founded, and now they both look pale and badly need a turn-around for the downturn after the group buying frenzy. Some of Ganji’s management team abandoned the ship and Yang Haoyong CEO of the company was busy denying the rumor of bankruptcy. Now the company’s group buying operation has been taken over by 55Tuan. Ganji has also made some expanding efforts to launch dating service and an airbnb-like business mayi.com, both with little outcome.

For 58.com, the company just won another round of funding late last year, meanwhile the group buying service has been gliding all the way. These days Yao Jingbo CEO of 58 talks a lot about the transition of the company, and he stressed that 58.com was not a classified site any more.

The wounds will be cured eventually, but how? Yao said that 58.com would pivot itself to the model of O2O or online to offline. “58.com will be like a O2O site for life services”, said him.

Coincidently, Ganji also resorts to another new wave of O2O – vacation rental service – with the launch of Mayi.com. This new Airbnb-like effort, which was launched in 2011 and won investment from Sequoia Capital is strongly supported by the company. Of course this time Ganji is not the quickest either, the first Airbnb imitator is Airizu. And according to a staff from Airizu, the model of Mayi was almost the same as Airbnb for it is turning into a pure platform, which might not work in China under different social environment and lifestyle.

Ganji’s slogan “Ganji Has it All”

Does Chinese Craigslist really works here?

When Ganji and 58.com are struggling for the group buying market and for the transition of new models, another player Baixing does not follow suit. Speaking of group buying, CEO Wang Jianshuo said: “I never think it’s a good idea. I don’t see any necessity for Biaixng to do so, because it has nothing to do with what we’ve been doing.” Sounds so wise. Actually Wang is happy with the current state of Baixing, he held a different view of developing the site, “Every entrepreneur starts their company with a big dream, but many would forget that dream along the way.” Right now Baixing’s team is still less than 40, which is similar to Craigslist’s. And Baxing is still focusing on classified sites with the aim of letting people helping one another in a friendly, social and trusting communal way, which is the same as what Craigslist has been conveying.

All thees Chinese classified sites originally were all honest imitators of Craigslist. However, when they open the door to business, one problem emerged soon, that is credibility of information. False or inappropriate information crammed the sites and it was not an easy job to get rid of them. Wang Jianshuo once revealed that this is critical to a classified site and the main job of Baixing’s engineers is to ensure the credibility of postings and be sure to remove false postings.

For 58.com, this is also their big concern. Yao said that the company hired hundreds of staff to remove the false information. An insider pointed out, “Classified sites are hard to survive here in China. In the US, individual users are active in posting in a mature society. But in China the users are mostly small and medium merchants, and to let them join can cost much.”

Craigslist was founded in 1999, though it’s not a listed company, it generated $100 million in revenue in 2009 and its traffic also surpassed eBay and Amazon. More importantly, the team has never expanded too much. It seems like the Craigslist model is popular in China but does not really work in here, the imitators still need to change and find their own ways.