58.com CEO Tells Employees "Unprofitable Businesses will be Shut Down in 12 Months"

July 24, 2023
Share this Post: 

58.com has stated in no uncertain terms that unprofitable businesses have a year to turn things around under the penalty of being shut down.

Yan Jinbo, chairman, founder, and CEO at Chinese classifieds giant 58.com, wrote to the Group's employees last week warning that the company's goal this year is to make 12 unprofitable businesses across the horizontal, profitable—and that the offending businesses will be "100% cut off" if they do not at least break even within the next 12 months.

The marketplace's struggles also reportedly led to 10,000 redundancies representing 30% of its total workforce in May—but 58.com has yet to respond publicly to either of these bombshells.

The Group needs to "dig deep and accumulate grain", said Jinbo, warning that the company will start focusing on different metrics to determine whether a business segment qualifies as viable for the future vision of 58.com—a three-year plan to transition its strategy to a service-based revenue model instead of today's traffic-based revenue model.

In his letter, Jinbo alluded to the 'opportunity' of AI, drawing comparisons to the internet boom of the 1990s.

And he said 58.com will also crack down on business operations that have led to misinformation and scammers posting fake ads across multiple marketplaces—a problem that is hitting customer retention and causing serious reputational damage across 58.com's horizontals.

It's an ongoing issue that has led to ugly headlines for "China's Craigslist"; in February 2022, the marketplace become embroiled in a human trafficking scam when a man responding to a job posting was smuggled into Cambodia and enslaved as a one-man blood bank!

58.com has yet to publicly respond to the 12-month profitability push or the redundancy claims, but it wouldn't be surprising. Internal letters are nothing new for Jinbo, who penned a similar letter in October 2022 contextualizing the business' underperformance to employees amid macroeconomic headwinds in China.

58.com lost two members of its senior staff in November, with Senior Vice President Jeff Ye Bing and Vice President Chen Huicong (Sophia Chen) voluntarily leaving the front lines to join the company's 'honorary retirement program'.

And the Group went public in October to say that it wasn't laying off 20% of employees from its real estate subsidiary Anjuke—which 58.com acquired in 2015.

July 24, 2023
Harvey is an experienced property journalist and copywriter. He has written about the property industry since 2015, starting at The Property Franchise Group in the UK, before moving to Spain to work for Spotahome. He has blogged for the private rented sector, ghostwritten for UK property experts and written case studies for franchise owners around the UK. Harvey joined Online Marketplaces as a News Editor in 2022.

Subscribe to our mailing list to get the famous, free Friday newsletter!

News and analysis to help build better online marketplace businesses, in your inbox, every Friday

Related News

Dutch Houses Netherlands
Mediahuis Shuts Dutch Portal Jaap Citing Fierce Competition

The Dutch real estate portal Jaap quietly shut down earlier this year after seeing its profits evaporate in the face...

Read More
Costar Vs Zillow Cowboys
CoStar's Homes.com May Not Need to Win Traffic Game to Out-Earn Zillow

It might be growing fast (and shouting about it) but CoStar-owned US  challenger real estate portal Homes.com is still a...

Read More
Untitled Design 10 1
Schibsted Successfully Detaches Media Business, Leaving Standalone Marketplaces Segment

The Norwegian media and marketplace operator Schibsted has had a busy month, with transactions worth approximately NOK 50 billion ($4.7...

Read More
Idealista Cinven
Private Equity Firm Cinven Takes the Lead in €3Bn Idealista Tug-Of-War

London-based, private equity firm Cinven has reportedly signed an exclusivity agreement to acquire Idealista for an estimated €3 billion. The...

Read More

Editor's Pick