There are signs that China’s job classifieds market may be heating up, with news of some new initiatives by one key player and the entrance on the scene of a new competitor.
Market leader 51Jobs.com is investing heavily in a new aggressive strategy. In February, presumably in an attempt to move into the area of executive recruiting, it launched the beta version of 51JingYing.com, a job-search platform that targets the higher end of the recruitment spectrum and provides a platform to connect headhunters and more experienced workers. (“Jingying” in Chinese means “elite”.)
Jingying’s features include more powerful search capabilities that better prioritize relevant positions and candidates, a private communication channel and a mobile app with a name card scanning function. The company reports it has been actively pursuing some important acquisition and investment opportunities. To this end, it recently signed definitive agreements with some target firms. M&As in progress include one with an established job-search site focused on fresh college graduates and another with a firm that provides professional assessment, training, and HR consulting services in China. These investments will be financed from existing cash resources and are expected to come to RMB 270 million (U.S. $43.5 million), subject to closing conditions and adjustments, if any.
51job expects these deals to be concluded in the second quarter of 2015, according to president and CEO Rick Yan (Zhen Ronghui). These moves may be aimed at protecting 51job from possible future challenges to its leading position. Among these challenges, some analysts speculate, is the unexpectedly fast growth of LinkedIn.
The professional social network, which opened a beta site in China in February 2014, already feels vindicated in its decision to enter the market. To obtain an operating license the company agreed to comply with Chinese laws (including censorship of content) but in return has been rewarded by a fast growing share of the recruitment pie.
Last year, LinkedIn’s chief executive officer, Jeff Weiner, mentioned the positive effect that China had had on his company’s earnings. Driven by its new business in China, LinkedIn’s revenue from its Asia-Pacific division grew by 64 percent in the third quarter, faster than from its operations in any other part of the world. China provided “particular strength,” Weiner said, with LinkedIn members in the country rising to about 6 million as of Sept. 30, up from about 4 million in February 2014. He attributed much of the Chinese growth to LinkedIn’s initiatives to enable local language profiles and content. “China has quickly emerged as a large contributor to network growth in recent months,” he said. The business has continued to grow. There are now about 8 million members, which means that membership has doubled since LinkedIn opened shop.
LinkedIn (“LingYing” in Chinese) has said that by entering the market, the company has been able to help China’s people connect to job opportunities located in China and across the world. “Extending our service in China raises difficult questions, but it is clear to us that the decision to proceed is the right one,” Derek Shen Boyang, president of LinkedIn China, wrote last year. “This is a very long-term investment. It’s not an experiment,” Shen wrote in April 2014.
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Of course, even 8 million members is small in Chinese terms, said Mark Natkin, managing director of Beijing-based Marbridge Consulting. Other Chinese Internet products, such as messaging app WeChat and payment service Alipay, have hundreds of millions of users in the country. Many of the new LinkedIn users might speak English and want to connect to career opportunities overseas, Natkin continues. But to woo non-English speaking Chinese users, the social network will, in his view, have to do more to develop its local services. Otherwise, “your user base will become limited to those who are well-educated, middle class and white collar,” he added.
Nevertheless, LinkedIn has demonstrated that in connecting Chinese job-seekers with foreign companies it has tapped into a huge potential market which, other companies in China are not as well equipped to serve, given LinkedIn’s superior ad platform and membership data. Recently, the company was granted an ICP license from Chinese regulators, allowing it to host Internet sites from within the country. 51job has certainly already taken note.
reprinted with permission of Classified Intelligence