New York-listed 58.com (NYSE: WUBA), often described as China’s Craigslist, reported $382.8 million in total revenues for the second quarter, growing at a 33.3% year-on-year increase and exceeding the higher end of the company’s guidance.
“A magical site” (一个神奇的网站), as its slogan claims, 58.com provides classifieds platforms in diverse categories, from second-hand goods, second-hand automobiles, recruitment to real estate, the last two being the company’s main revenue drivers.
“Among all our categories, jobs continued to deliver the fastest year-over-year growth and increasingly accounts for a larger proportion of total revenues,” says Chairman and CEO Michael Yao (Yao Jinbo) in the company’s financial report. Yao said in May that the company has for the first time outpaced its “online recruitment peers in China” in revenues.
In 2016, real estate outpaced recruitment to become the biggest traffic driver for 58.com. Housing market headwinds in China, however, are heavily dependent on government policies. Yao said that real estate was the company’s focus in 2016, and 2017 would the year for recruitment.
Historically, 58.com is known for its big blue-collar user base. As China’s economy moves away from manufacturing, 58.com has planned to move into the white-collar recruitment market, where competitors Zhilian Recruitment (NYSE:ZPIN) and 51job (Nasdaq: JOBS) are strong. In 2015, 58.com acquired ChinaHR.com, a recruitment site founded in 1997 with a focus on the middle to higher end job market.
The lucrative recruitment business in China has been a hotly debated topic in the past month due to a death of a university graduate. Li Wenxing, 23, was found drowned months after being recruited online by a pyramid scheme posing as a software company via Boss Zhipin, a direct hiring site. The news sparked a public outcry over the recruiting industry’s lack of vetting in order to more easily attract employers.
58.com’s hiring arm and its once-rival, now owned, Ganji were listed the top two out of eleven recruiting sites involved in the largest number of criminal lawsuits, according to a survey (in Chinese) by local media The Mirror (法制晚报). In July, state media Xinhua published an article (in Chinese) chronicling a rural migrant worker who fell victim to 58.com’s loosely managed recruiting platform.