In Q3, 2019, the same-city revenue of 4.258 billion yuan, an increase of 17.4% year-on-year, this growth rate is the lowest since the third quarter of 2018.
On March 3, news about 58 city layoffs (WUBA) began to appear on multiple social platforms. Among them, a netizen named “One Commissioner” publicly stated on Weibo that 58 people in the same city have begun layoffs recently, with a proportion of up to 20%. At the same time, 58 cities also unilaterally forced employees to suspend pay for two months and only paid 80% of their basic salary.
In response to the above rumors, on the 5th of March, the same city side responded to “21st Century Business Herald”, saying that the company’s relevant personnel are still making arrangements in accordance with normal business, and the news of layoffs is not true.
The rumor of layoffs may reflect that the 58 cities are facing pressure from slowing revenue growth. In Q3, 2019, the same-city revenue of 4.258 billion yuan, an increase of 17.4% year-on-year, this growth rate is the lowest since the third quarter of 2018 .
Mapping, data source: 58 same city financial report
58 The city’s main business is online advertising, which contributes more than 60% of revenue. However, as the advertising market has continued to decline since the second half of 2018, 58 online advertising businesses in the same city have also come under pressure. In addition, the growth rate of membership service revenue, the second largest business segment in 58 cities, has also shown a slowdown since Q3 2018. The income of 58 members in the same city mainly comes from paying merchants in the housing and recruitment industries, while the two industries have performed weakly in the past two years, which has led to the growth of 58 members in the same city Slowdown.
In order to get more traffic, 58 city in recent years has made great efforts to sink the market, and launched a 58 city town information distribution platform covering the fields of recruitment, real estate, second-hand cars and other areas for the township market. In addition, 58 cities are also exploring the transition to an integrated service platform. On February 19, SkyEye data showed that 58 areas of the city had changed their business scope, adding artificial intelligence application software development, cultural and entertainment brokerage services, and digital cultural creative software development.
for 20The results of the fourth quarter of 19, 58 guidance given earlier by the same city showed that its total revenue range is expected to be 4.05 billion to 4.15 billion yuan, and the year-on-year growth rate will continue to decline, 12% -15%. In a report released in November 2019, Guotai Junan believes that due to the uncertainties in real estate and macroeconomics, 58 the growth pressure of online advertising and membership business in the same city is not small. 58 The same city is expected to sacrifice profit margins in order to seek new growth drivers and retain existing customers, and its full-year profit margin is expected to decline in 2019.
For Chinese companies in the epidemic, in the first quarter of 2020, due to the short-term impact of the epidemic on job hunting and real estate promotion demand, 58 city performance may be affected to some extent.
(title source: 58 city official website)