"58 city, a magic website." Yang Mi called out this advertising words let countless people remember 58 city. Nearly seven years after its listing, 58 city announced the completion of privatization merger and delisting from NYSE on September 18. Since its establishment in 2005, 58 has become the king in the field of classified information all the way. However, in the competition with houlang, it is not strong. 58 city, can it be "magic" again?
58 in the same city, the first in China and the second in the world
In 1999, Yao Jinbo graduated from Ocean University of China; in early 2000, he resigned from his position in the technical department of Shandong Branch of Bank of China and set up a business in the south. He felt that "simply doing technology is not in line with his ambition"; at the end of 2000, he sold his own website providing domain name trading services to China Wannet, seizing the first pot of gold.
In 2005, he resigned from the post of vice president of China Wannet and chose to leave again to start a business. 58 was born. At that time, Yao Jinbo believed that as long as there were enough users and traffic revenue as the support, 58 city could quickly become bigger and stronger.
58 the city has obtained the start-up fund of Softbank Saifu of 5 million US dollars. At the beginning of the venture, 58 was in a state of deficit for a long time. It was not until 2008 that 58 launched the paid member service that it was profitable. In June of the same year, Softbank Saifu invested another $40 million in 58 cities. Subsequently, 58 city successively received $75 million financing from Warburg Pincus investment, DCM China and Softbank Saifu.
With the power of capital, 58 galloped all the way to the city. By the end of 2010, 58 registered users in the same city exceeded 4million, and all indicators were in the leading position in the field of classified information. At that time, players in the same industry were either purchased by 58 cities or have already exited the market, and the catch-up network became Yao's only opponent.
In 2011, 58 city rushed into Google's list of the world's top 100 websites with 91st place, becoming the largest classified information website in China, ranking second only to Craigslist in the world.
At the same time, Yao Jinbo returns his main energy to the field of information platform, strengthening and deriving two profit models -- member services for individual fees, and online marketing for merchants' fees. By solving the problem of information asymmetry and serving both sides of merchants and users, 58 city has become a comprehensive website of classified information.
Merge to go to market net, "magical website" a dominant one
Many people, even if they have not used the 58 city, have probably heard of the slogan "a magic website".
In 2011, 58 Tongcheng and ganji.com, which had been fighting for a long time, launched highly consistent advertisements to tell viewers that they can search or publish housing information, recruitment information and second-hand goods trading information in their own websites. The only difference is that Yao Chen yelled out "go to market net, everything has", which was defeated by Yang Mi's "58 city, a magical website".
On the "58 magic day" in 2018, Yao Jinbo revealed why he asked Yang Mi to shoot advertisements. "Jiji.com invited Yao Chen and made an advertisement calling" Ganji net. ". We say this is no good, we have to find someone to shout Because the "Palace" starring Yang Mi has just been broadcast and ranked in the top of the list, Yao Jinbo's daughter also likes her, and finally decided.
"Go to the market net called again, it made the mouth very big. I thought at that time: you shout once, my method is very simple, I shout twice (58 city) Yao Jinbo said.
The two sides invested heavily in those years and launched an advertising war. "It costs 12.2 billion advertising fees every year, which has exceeded all our income, and it is estimated that the catch-up network is similar," Yao said of the money burning war at that time.
On October 31, 2013, 58 was listed on the New York Stock Exchange in the same city, becoming "the first stock of classified information", and the stock price rose 42% on the first day. After 18 months of listing, 58 companies in the same city have made large-scale mergers and acquisitions, investment layout, recruitment, real estate and other fields, including anjuke and Zhonghua yingcai.com. But the most eye-catching is the merger of 58 city and the old rival rush market network.
In 2014, Yao Jinbo returned Tencent's $736 million investment with 15% voting rights in 58 cities. In April 2015, 58 Tongcheng and Ganji net shook hands and made peace with each other under the help of investors and completed the merger.
According to the market data of fastway Research Institute at that time, the market share of 58 was about 47.5% in the same city, while the market share of Ganji network was 34.1%. After the merger of fastway, its market share exceeded 80%. 58 city is already the king of this track.
58, big but not strong
2015 was a turning point for 58 cities. Before, most of the energy of 58 city was on the fight with the catch-up network, and after the merger, they felt "four eyes at heart" after the merger. "After years of fighting with the rally, he felt lost his opponent in the moment after his acquisition," Yao said
Also in 2015, meituan, which belongs to the field of life service, has successively entered the fields of hotel, takeout, film, travel, travel, new retail, etc. "Meituan has no boundary", and now it has become a life service giant with a market value of more than one trillion yuan.
The market value of meituan is more than one trillion yuan. Data from flush
58 compared with other Internet enterprises in the city, it seems that it is always slow. In terms of second-hand trading, Alibaba launched idle fish in 2014. After a year, 58 cities launched "transfer" to compete with it. But step by step, slow step by step, idle fish has become a leader in this field. In July this year, even the official flagship stores have settled in idle fish.
There is nothing in the same city, but "big but not strong" leaves a chance for competitors.
In the field of real estate, although 58 has acquired anjuke, other competitors are coming. For example, the chain family has been upgraded to shell, from the traditional offline real estate intermediary to the online platform, and from the direct marketing mode to the platform mode. At present, shell has been listed on the New York Stock Exchange, and its market value is almost 8 times that of 58 cities.
In the field of recruitment information, there are two old-fashioned agencies, 51job and Zhilian, and then there are the following: lagouwang and boss direct recruitment. 58 is under great pressure in the city.
Many factors are finally reflected in the financial report and stock price.
According to the financial report, from 2015 to 2019, 58's urban revenue was 4.478 billion yuan, 7.592 billion yuan, 10.07 billion yuan, 13.14 billion yuan and 15.58 billion yuan respectively, with the growth rate of 185.11%, 69.54%, 32.62%, 30.48% and 18.56%, respectively, showing a continuous decline in growth rate.
In terms of gross profit, from 2015 to 2019, the gross profits of 58 cities were 4.156 billion yuan, 6.885 billion yuan, 9.143 billion yuan, 11.7 billion yuan and 13.78 billion yuan respectively, with year-on-year growth rates of 169.34%, 65.66%, 32.80%, 27.96% and 17.76%, respectively, and the gross profit continued to decline. Its gross profit rate also fell to 86.4% from 92.8% in 2015.
In recent two years, 58 city's share price has been in a state of fluctuation, without excessive growth. 58 the closing price of $55.88 before stopping trading in the same city also dropped nearly 40% from the high of $89.9 in May 2018.
After privatization, where to go?
The privatization began in April this year. On April 2, 58 Tongcheng announced that the company's board of directors had received a non binding offer from gulling investment. After the privatization offer was exposed, Tianyan found that on April 3, Yao Jinbo, the CEO of 58 city, pledged part of the equity of Beijing May 8 Information Technology Co., Ltd., the main operating body of 58.
On June 15, 58 announced that it had signed a merger agreement with quantum bloom Group Ltd. Under the terms of the merger agreement, the buyer's investment consortium will purchase all of 58 city's outstanding common shares at a cash price of $28 per common share (equivalent to $56 per ads), with a total transaction value of about $8.7 billion.
On September 18, 58 Tongcheng announced that it would accept the privatization offer of the investment consortium and buy back American stocks at the price of US $56 per American Depository Share (ads) with a total amount of US $8.7 billion. However, the official did not explain the next step.
It is worth noting that the privatization merger and acquisition of 58 cities is the largest case of privatization of Chinese enterprises listed in the United States after Qihu 360. On July 15th, 2016, Qihu 360 announced the completion of the privatization transaction, with the final amount of 51.46 billion yuan, while the privatization valuation of 58 cities reached 61.7 billion yuan.
After privatization, where will 58 go with the city?
Kuang Yuqing, founder of lens research, said that perhaps 58 felt its valuation was undervalued in the United States. "58's platform is valuable, and its gross profit margin is also very high. It is true that the scale of operating profit and valuation is underestimated. Whether it is a return to Hong Kong stocks or a shares, such platform companies should give a valuation of 30-40 times or higher. " (end)