58 access does not equal to successful diversion?

Zhao Na by reporter from Beijing

June 28, 58 joint Tencent holding company announced that Tencent will invest 736 million US dollars 58 city. Upon completion of the transaction, Tencent will own 58% of the city after the fully diluted 19.9% ​​of the shares and 15.2% of the voting power, surpassing the "Hello Chinese Company" controlled by Yao Jinbo and becoming the largest shareholder in the 58th city. Under the investment agreement, Tencent will subscribe 58,600,500 class A and class B ordinary shares of 58 cities in the same city at a price of US $ 20 / share. At the same time, Tencent's purchase price is equivalent to US $ 40 per ADR, as each ADR in City 58 is equivalent to two shares of common stock.

In response, E-commerce analyst Lu Zhenwang told the Daily Economic News reporter that in terms of the cooperation effect between the two companies, Tencent's stake in 58 is one of its steps to build an ecosystem of O2O and mobile e-commerce businesses. Combined with Wechat The payment is expected to form a closed loop; and as far as the formation of the 58 city is concerned, the classified information platform in which it operates is highly competitive. With the introduction of Tencent's traffic and financial support, the city's ability to expand into third and fourth tier cities will be obtained Enhance.

Lu Zhenwang also bluntly, renting, second-hand car and home economics and other non-standard local service features obvious, if the 58 simple city business into WeChat, its follow-up effect is worth observing; after all, the interface does not mean that the successful diversion.

Negotiation 10 days "flash marriage"

58 City CEO Yao Jinbo said in the news that microblogging microblogging that night, the deal "from the beginning to talk about finished 10 days."

It is understood that 58 cities through the above cooperation, will have the opportunity to get from Tencent QQ, WeChat, QQ.com and QQ browser and other platforms of traffic, to further strengthen the service in the field of leading position. Tencent will integrate 58 city local services on the above platform so that users can discover recommended merchants through social tools and better communicate with merchants and other users, thereby helping 58 cities to further expand user base and enhance user experience.

In May this year at the 2014 Global Mobile Internet Conference (GMIC), Yao Jinbo Netease Science and Technology in an exclusive interview revealed that the next 3 to 5 years, 58 city will be aimed at car rental, on behalf of the drive and home economics and other areas with potential for development, Invest $ 1 Billion for New Business Incubation and Investment M & A. From this we can see that 58 cities are stepping up their capabilities in upstream and offline vertical areas.

In an interview with the "Daily Economic News" reporter Lu Zhenwang said that as for Tencent, after investing in the public comment, dropping a taxi and Jingdong, the 58-share stake in the city is also one of the steps to build an ecosystem for O2O and mobile commerce , Combined with WeChat payment is expected to form a closed loop. In the future, Tencent may continue to access services such as tourism and extend its chain in the vertical area of ​​lifestyle services through a combination of superpositions. In addition, for the same city of 58, it is highly competitive with the market network in the field of classified information platform. The traffic introduction and financial support from Tencent is its obvious harvest, which is conducive to the expansion of the third and fourth tier cities in the future.

58 access does not equal to successful diversion?

Tencent's Q1 2014 results showed that as of the end of the first quarter of 2014, the combined monthly active accounts of WeChat and WeChat reached 396 million and the monthly number of QQ active accounts reached 848 million. At the same time, Yao Jinbo has said that although the 58 city on the PC side of the traffic is still growing, there are already 51% of page views from the mobile terminal.

Tencent and 58 city become "partners" of the opportunity lies in the local life service after implantation of a huge cake after the mobile terminal. The traffic in this area is not an easy task, requiring strong enough and professional offline capabilities to maintain business resources and user relationships.

In response, Tencent responsible person told reporters that the development of large enterprises also have boundaries, Tencent currently plays a role in many vertical areas is the platform side, need to establish equity relationships with different companies to expand. Therefore, for mobile platforms such as WeChat and mobile QQ, the current focus is not on how much revenue can be gained from accessing O2O services. Rather, it depends on integrating various life services and continuously improving user stickiness.

According to the Daily Economic News reporter's review of 58 city's earnings for the first quarter of 2014, its gross profit margin in the first quarter of this year was 94.9%, up from 91.8% in the same period of 2013. The number of paying members exceeded 440,000 , An increase of 77% over the same period of last year.

It is noteworthy that Yao Jinbo had pointed out in the interpretation of the above earnings report that 58 cities now have more than 5 million subscribers, paying members with only 8% penetration rate. In this regard, Lvwang Wang said the recruitment business, for example, small and medium enterprises and small and micro enterprises to access 58 city's customer volume has been "no problem", but these enterprises in the platform of liquidity is still weak. Therefore, the current test of 58 cities is how to "activate" the demand of SMEs for payment on this platform.

Lu Zhenwang further pointed out that the effect of the combination of a drop of taxi into WeChat is relatively good because taxi is a standardized service. Such as renting, used cars and domestic services and other local life services, non-standardized features are obvious, if the 58 city simply access to these businesses WeChat, the value is not large. After all, the interface does not mean successful diversion, even if the last successful diversion, but there is still a step away from the pay-for-cash.

In the opinion of Lu Zhenwang, the positioning of the 58 same-city user base is precise. Except for small and micro enterprises, basic users are mainly ordinary users. There is a strong and frequent need for such groups to change jobs and rent houses. Users are very sticky. Therefore, after the "same-city" marriage between Tencent and 58 in the same city, the pressure from Baidu and Alibaba from the other two BAT companies will not be great. Whether or not we can create a new business model through cooperation with WeChat is the core issue.