58.com Inc., through its subsidiaries, primarily engages in the operation of various multi-category online classifieds platforms and vertical listing platforms that enable local businesses and consumers to connect, share information and conduct business in the People’s Republic of China (the PRC or China).
The company’s business consists of 58 core businesses and incubated new businesses. The 58 core businesses include 58 and Ganji, its multi-content category online classifieds platforms, Anjuk...
58.com Inc., through its subsidiaries, primarily engages in the operation of various multi-category online classifieds platforms and vertical listing platforms that enable local businesses and consumers to connect, share information and conduct business in the People’s Republic of China (the PRC or China).
The company’s business consists of 58 core businesses and incubated new businesses. The 58 core businesses include 58 and Ganji, its multi-content category online classifieds platforms, Anjuke, its real estate listing platform, ChinaHR, its online recruitment platform that focuses on white-collar jobs and Jia Xiao Yi Dian Tong, an online platform for drivers’ license examination preparation and other related services. The incubated new businesses primarily include Zhuan Zhuan, an online used goods trading and service platform, and 58 Town, a rural version of 58.com. These platforms provide vertically integrated services to users in their respective content categories. Prior to incubating Zhuan Zhuan and 58 Town, 58 Home and Che Hao Duo were initially incubated within 58 or Ganji and had completed fund raisings from additional outside investors.
The company primarily conducts its business in mainland China. Its online services covered 338 cities, 382 counties, and approximately 13,000 towns and villages in mainland China. The company has its direct sales team in 70 cities in mainland China. Its users refer to all participants on its platforms, including consumer users and business users. Consumer users browse and search information on the company’s online platforms without the need to register an account with it. Business users are those who attempt to attract customer leads or recruit employees. Business users could post information on the company’s platform for free, however, they might choose to pay for its premium services to enhance the marketing effectiveness.
58 Core Business Service Offerings
58 core business services for consumer users
The company provides platforms for consumer users to browse, search and post information, get connected and communicate with services providers to address these consumer users’ needs for local services. The following platforms could be accessed through PC, mobile browsers, as well as mobile apps.
58 was launched in 2005 when the company was first founded. It is the major online classifieds platform in China. It contains various content categories, such as real estates, jobs, automotive, used goods, yellow pages and other local services categories.
Ganji was launched in 2005. It was consolidated into the company in 2015. It contains similar content categories as 58. Post the acquisition, Ganji has been strategically de-emphasized especially in terms of user acquisition, to maximize investment and return on investment for 58 and other major apps.
Anjuke was launched in 2007 and acquired by the company in 2015. It is a major real estate listing platform and focuses primarily on real estate sales, both secondary and primary, whereas the real estate categories on 58 primarily focus on rental and secondary real estate sales.
ChinaHR was launched in 1997 and acquired by the company in 2015. It is an online recruitment platform and focuses on white-collar jobs and offers career information and various other recruitment related services.
Jia Xiao Yi Dian Tong was launched in 2005 and acquired by the company in 2015. It is a platform that offer drivers’ license examination preparation and other related services.
58 core business services for business users
Business users use the company’s platform to upload and promote their services, attract customer leads and recruit employees. Business users could validate themselves through a range of individual and business background validation tools on the platform to enhance their profiles online. The company provides business users with a series of services for free. They could post information within certain limit for free. In majority of key categories, they have a basic storefront page and access to PC and mobile apps to manage their listings and communicate with consumer users for free. The company also launched category-specific mobile apps tailor-made for business users with more mobile-friendly features for them to manage listings on its platforms, get leads and communicate with consumer users. The company also generates more data insights on marketing effectiveness and provide relevant feedback to its business users to increase the efficiency of their online marketing effort and overall business activities. The company intends to continue to expand the features and enhance the user experience for these software as-a- service tools. The company’s mobile apps developed for business users primarily consists of the following:
Zhao Cai Mao is a recruitment mobile app particularly for small and micro business users. This app allows employers to upload descriptions of their business, post jobs and search for and chat with potential job seekers. Its location-based services help identify job seekers that are potentially more geographically suitable for the open positions. Its chat function provides an alternative to phone calls to conduct job search related communication. It enables employer to connect with job seekers on 58 and Ganji platforms. These features help in the hiring process and help employers recruit on the go. Business users could pay for more leads or enhanced online marketing services on this app. In addition to the Zhao Cai Mao app, business users also use 58 as an important tool to access and manage their listing and conduct various recruitment related services, which could be accessed through PC, mobile browsers, as well as mobile apps.
Mobile Real Estate Agent is a mobile app for individual secondary and rental real estate agent users. It helps real estate agents to upload and manage listings, contribute content to the platform and connect with consumer users.
Wei Liao Ke is a mobile app for individual primary real estate agent users. It helps real estate agents to upload and manage listings, contribute content to the platform and connect with consumer users.
Shang Jia Tong is a mobile app for yellow page business users. It helps business users to upload and manage listings and connect with consumer users.
Che Shang Tong is a mobile app for used car dealer users. It helps used car dealers to upload and manage listings, access useful information, such as maintenance or pricing through integrated third-party tools, and connect with consumer users.
Paid Premium Services to Business Users
A majority of the company’s paying users are business users as opposed to consumer users, even though consumer users could also pay for enhancement of their listing exposure. The paying users include members who used its subscription-based membership services and other paying users who have not used its subscription-based membership services but have purchased at least one type of its various online marketing services or other services.
Subscription-Based Membership Services
Even though business users could participate in the company’s platforms for free, some business users pay for additional premium services to enhance their marketing effectiveness. The company’s subscription-based membership is a basic service package primarily consisting of merchant certification, display of an online storefront on its platforms, preferential listing benefits, such as daily priority listings and a higher limit for daily listings, and access to its customer service support team and online account management system. Members who subscribe to its membership could get access to services. 58, Ganji and Anjuke offer subscription-based membership packages that include similar types of services, although the specific details of the services, such as the quotas for daily listings, might vary from platform to platform. In some cases, the company merges memberships on multiple platforms into a single subscription-based membership package, which enables business users to market on multiple platforms.
The company offers memberships of varying lengths across different content categories. Memberships in the yellow pages, jobs and used auto categories are primarily 12-month packages. In China, due to relatively high employee turnover among migrant workers, majority of businesses have ongoing hiring needs. Memberships in the real estate category are primarily one-month to three-month packages, because membership services are provided on an individual real estate agent basis and the turnover of real estate agents is quite high. The company acquires a majority of subscription-based members through its field sales teams and its sales agent network, even though it has started to make more membership services packages available online and encourage business users to select and purchase them online. The company’s centralized and tele-customer service team supports its members during their membership period to enhance the marketing effectiveness and improve membership renewals. The majority of its subscription-based paying members are small and medium-sized local businesses.
Online Marketing Services (OMS)
The company’s OMS primarily include real-time bidding, priority listing, various other lead-generation services and display advertising. Some types of online marketing services are similar across different content categories, whereas others are tailored to one or some specific content category based on the nature of the content category and its insights and know-how.
Business users use the company’s real-time bidding services to bid for the most prominent placement of their listings in specific categories and locations on a cost-per-click (CPC) basis. The company has developed a bidding system through which business users could create text- and graphic-based descriptions for their listings and bid on the placements of their listings. In some categories, instead of a dynamic market-based bidding pricing system, the company sets fixed CPC price that is subject to regular reviews and adjustment. The company made decisions as to which bidding systems to use based on its experience and know-how about each specific content category. Business users also purchase the company’s priority listing services, which place their listings below real-time bidding listings but above the area where regular paying business users' listings are displayed. Business users could purchase listing placements of varying durations ranging from hours to days to weeks depending on their needs.
The company provides display advertisement primarily for major business users, such as primary real estate developers on on Anjuke platform, companies who hire more white-collar staff on on ChinaHR platform and auto manufacturers on its 58Che platform. These business users purchase display advertisements to enhance their brand recognition and attract consumer attention. These display advertisements are either text- or graphic-based displays for varying time periods ranging from days to months.
Incubated New Businesses (Consolidated Businesses)
Zhuan Zhuan is an online used goods trading and service platform launched in the fourth quarter of 2015. Zhuan Zhuan has featured online marketplace rules and developed customized service capabilities, so that small business users could provide individual buyers (also known as C2B buyers) with diversified goods and better values. Zhuan Zhuan allows buyers to search and trade various used goods and features picture-taking and video-shooting to make listing used goods much easier. The payment solution for Zhuan Zhuan is a WeChat payment-based escrow payment process co-developed by 58 and Tencent. This is a payment method with an escrow payment process. Under this process, funds transferred through online payment would not be released to the sellers until the buyers confirm receipt. The use of WeChat account log-in and exclusive WeChat friends’ relations data has given the platform an extra level of security and social interest. Users could opt to transact offline face-to-face as well as using Zhuan Zhuan to arrange logistic service providers to come to sellers’s place to pick up the goods and track shipment status through a user interface.
For some specific product categories, such as mobile phones, tablets, laptops, consumer electronic devices and books, Zhuan Zhuan provides further value-added services to enhance confidence and trust in transactions. Zhuan Zhuan has a technology team specialized in mobile phone authentication and quality control.
Zhuan Zhuan also developed varieties of tools to further promote transactions. It developed auction and bidding platforms so that a seller could sometimes sell a Zhuan Zhuan authenticated mobile phone in one hour with a price premium of approximately 20% to his/her starting price. It leverages live streaming technology to help business user to promote their non-standard goods, such as used phones, tablets and jewels. The company also developed online marketing tools for used goods business users, through which such users could post and manage their traffic of a used goods listing in real time. These value-added services help to boost transaction volume and strengthen the company’s brand recognition through word of mouth marketing among users and merchandise network. At the same time, Zhuan Zhuan charges fees for authentication services provided to buyers, as well as online marketplace services provided to sellers.
The company owns 63.5% of equity stake in the Zhuan Zhuan Entities on an issued and outstanding basis and continue to consolidate the financial results of Zhuan Zhuan in its consolidated financial statements.
58 Town is a rural version of 58 in smaller towns and rural areas in China that the company launched in the summer of 2017.
58 Town intends to provide users in those areas an online platform to access local information that is useful and interesting. The company sends its teams or leverage distributors to visit these small towns, recruit local ‘town partners’ and provides them with apps to upload and manage information. These town partners are not its full-time employees, but they are typically people who show an interest in and have the basic skills for helping the company to develop local users and manage content mostly on part time basis. The company also offers individually relatively minor monetary incentive to town partners to reward good results. The content categories it covers on 58 Town are similar to those on 58. Local community forum, jobs, real estate, auto are the major ones. 58 Town app was launched in 2018. During 2019, the company focused on growing the app. Approximately 15 millions of users accessed 58 Town app in 2019.
Incubated New Businesses (Deconsolidated Businesses)
58 Home is a platform that enables users to search and purchase various home services, including domestic services, freight delivery services and platform services. Consumer users could select individual service providers online without going through middleman agency companies. For its core service categories, in addition to its online platform, 58 Home engages various offline operations, such as finding and certifying individual service providers and providing them with a mobile app tailor made for them to receive order and connect with consumer users. 58 Home also operates a training program for services providers in an effort to raise the quality of their services and provide certification for their skills. 58 Home has customer service call center teams that collect customer feedback to enhance its customers’ operations. 58 Home also partners with other third-party vertically-dedicated service companies in order to widen its content categories. There are approximately 400 cities and counties in China where majority of 58 Home’s online services are available.
As of December 31, 2019, the company held 68.8% of equity interests in 58 Home on an as-converted basis, including 87.9% of the total outstanding ordinary shares and 5.0% of the total outstanding preferred shares.
Che Hao Duo, previously known as Guazi, is an automotive retail groups in China. Its business primarily consists of Guazi, an online C2C used car trading platform, which was launched in 2015 and Mao Dou, an online new car trading platform, which was launched in 2017. These platforms provide consumers with a selection of used and new car inventory and a hassle-free one-stop-shop experience with various post-sales maintenance services, financing and insurance solutions.
Content Categories
The company organizes listings on its platforms by content categories in a directory to facilitate browsing and viewing. The major content categories in terms of number of listings and user traffic on its platforms are the following:
Real estate: Real estate is sorted into subgroups of residential rental, secondary and primary property sales, office space, retail space and industrial real estate rental. 58 and Ganji platforms have mainly rental and secondary property sales listings, while the company’s Anjuke platform has primarily secondary and primary property sales listings. Listings are uploaded by real estate agents, although consumers could upload their own homes for lease or sale as well. The format of the listing includes text, picture and increasingly video, virtual 3-D depiction or bird’s-eye view of the property and neighborhood. The company also provides tools, such as maps, property pricing index, mortgage calculators, housing policy interpretations and industry news to further assist consumers’ decision-making. Besides, the company also provides insurance coverage for both consumers and real estate agents. In 2019, the company upgraded the process of displaying the housing resources on its platforms to improve the listing efficiency and developed new product features to allow real estate agents to share the listings among their private WeChat social network to grow their businesses.
Jobs: Jobs covers a range of job categories, such as sales, customer service, manufacturing, human resources and administrative, homecare, cleaning, security, logistics. Employers on the company’s platforms come from various industries, such as dining, recreation and entertainment, internet, retail and e-commerce, healthcare, education, finance and insurance, real estate, renovation and construction. The company also has recruitment agencies, which represents a minority of all listings under the jobs category. Its 58 and Ganji platforms have largely mid-to-lower-level income job listings and resumes. ChinaHR, on the other hand, focuses on white-collar jobs from larger and reputable companies. Job applicants could prepare a resume online, browse open positions and apply for jobs online. They could also join an online community to share job search experience and access career advices or industry news. Employers could upload job listings, purchase resumes and use its background check and assessment services. Job applicants and employers could communicate in various ways on the company’s platforms through various consumer and business facing mobile apps.
Automotive: Automotive includes listings of used and new cars, car leasing services, driving school services, automotive repairs and maintenance services, and other car-related services. The company’s platforms primarily focus on listing of used cars. Listings are uploaded by either used car dealers or individual consumers. In 2019, the company improved its dealer credit system. By collecting consumers’ real-time feedback by calls, messages, and visits on the used car dealers, the company developed a performance-based credit-rating system, which affects exposure opportunities and pricing scheme of the dealer’s listings. The company’s platform also provides insurance coverage for consumers, regarding online listing information and offline transaction. For selected vehicles, the company also provides vehicle valuation and inspection services, quality guaranty and extended warranty solutions, as well as financial services, mostly through qualified third-party partners, in an effort to better facilitate the used car transaction. Consumer users and business users could communicate on its platform through various tools, including phone calls, instant messages, and video chats. Besides, the company provides advertising services for automakers to help them with brand and sales promotions. Furthermore, by acquiring certain assets of a used car auction business, the company expands the business of its platform from used car listing to used car transactions. On top of internet traffic services, this new practice provides the company’s customers used car sourcing services.
Used goods: Used goods covers a range of used consumer products, such as computers and peripherals, mobile phones, digital cameras, furniture, household appliances and goods, books, artwork, sporting goods and musical instruments. On 58 and Ganji platforms, listings are uploaded by either professional used goods resellers or individual consumers. On Zhuan Zhuan, listings are uploaded by individual consumers. Consumers could browse and communicate with businesses or other consumers on 58 and Ganji. In addition, consumers could directly transact on Zhuan Zhuan.
Yellow pages local services: This category covers various services, such as homecare, enterprise services, renovation, education and training, vehicle rental, franchise licensing services, wedding and filming, and travel. On 58 and Ganji platforms, consumer users could search and browse local services information. Listings are primarily uploaded by business users and communicate with business users or other consumer users. The company engages user reviews and develops information tags on businesses and their service offerings to further facilitate decision-making. For certain categories, the company also launched enhanced services named ‘Premium Home Services’, which focuses on partnering with service providers to further standardize their service quality and integrate service protection plans while establishing closed-loop transactions through its platform. Premium Home Services allow consumers to directly purchase services from the company at fixed prices and receive services from the company’s certified service providers.
Strategy
A primary element of the company’s strategy is to continue to develop its online platforms and services for mobile devices to capture a greater share of the growing number of users that access online marketing services and other internet services through smartphones and other mobile devices.
Sales
The company’s direct field sales force provides it with direct access to local business users and helps the company understand local needs. As of December 31, 2019, the company’s field direct sales teams and sales support teams consisted of 13,561 employees and they covered 70 cities in mainland China.
Research and Development
In 2019, the company’s research and development expense was RMB2.1 billion.
Intellectual Property
As of March 31, 2020, the company held 91 patents and had applied for the registration of 878 other patents, which cover various technologies, including those relating to data processing, search, distribution and publishing. As of March 31, 2020, the company had registered 366 computer software copyrights and 140 artwork copyrights in China, and had registered 43 domain names that are material to its business, including www.58.com, www.58.com.cn, www.ganji.com, www.ganji.com.cn, www.anjuke.com and www.anjuke.cn, and 2,173 trademarks, including Graphic, Graphic and Graphic, in China, excluding those relating to 58 Home.
History
58.com Inc. was founded in 2005. The company was incorporated as a limited liability company in the Cayman Islands in 2011.
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