Why Classified is NOT Popular in China, Yet

Today, when I talked with EnjoyChina‘s founder Daniel, I mentioned about my observation about why classified is not popular in China yet. It may also provide some hints to people who don’t know too much about China’s recent history.

Current Status of Classified Market

I am in the classified business in my professional life. Today, classified is still an unfamiliar word for most people. I bet 99 out of 100 people never posted classified ads of any kinds in their entire world – even in Shnaghai. Why?

The 30 Years of History

It is not fare to say, China don’t have classified. We do have a booming classified market in 1930s. I personally went to the Shanghai Library and found there are many pages of classified on the local Shanghai newspaper – Shen. People sent many marriage announcement, business opening, and all kinds of things there. If you bring that to people today, I believe they will be surprised about how advanced the classified industry in 1930s are. The newspaper exists from 1890s to 1940s, before it was closed by the “New China” government.

After 1949, the society went through many changes. The core is, it is prohibited to own private property. Since everything is owned by the “state”, or “the People”, basically people don’t own anything, trading simply distinct in the planned economy system.

1980 – the Opening Up and Reform Policies

At the end of 1970s, and early of 1980s, with the “Opening Up and Reform” policy, trading started to get back to people’s life. There are huge change during the last 20 years. In as short as 20 years, China changed dramatically and is on the way to get back to its original position in the world.

Daniel asked a very good question here:

Why all kinds of trading and business boomed, but not classified?

House

With the Opening up and Reform policy, many things changed, but house, for example, is still in the old system. It is as late as 1998 when the government stopped house allocation. Before that, most of the houses were built by “Unit” (you may think it as a factory, a company, or any kind of employer), and the “Unit” will allocate the house to individual. No one buys houses, and to be more exact, no one actually owns a house, even if he/she is luck to stay in a house.

In 1998, the reform reaches houses. The original house allocation system was abandoned, and “Unit” start to give money, instead of houses to their employees. It took a long way to today’s situation – many units don’t give people money for houses. There is only salary. This “house allocation” may sounds strange for foreigners, but it is true 10 years ago.

So, after 1998, people start to buy houses maybe for the first time after 1949. Very soon, real estate agents start to appear and boom. This is the history of Houses. That explains why there are no real estate classified before 1998. Today, real estate classified has already been a big portion in newspaper – although it is still published by real estate agents, not house owners.

Job

Job is also a big category on classified. Let’s take a look at what happened to job.

There are also job reform starting from 1980s. Before that, there were a period of time (called Culture Revolution) that all schools, universities were closed, and all scholars were sent to far villages or even sentenced to death. “Job? What does this word mean?”

At the end of 1970s, university resumed, and people start to enter university again. However, for a long time, all the jobs were allocated. When someone graduates, he/she will receive a letter to tell him/her to go to xxx provinde, xxxxx city, and xxxx factory. That is. You just need to obey the assignment. This kind of “graduate allocation” lasted for a long time. It ends as late as 1990s. When I entered my university in 1995, there are still people who graduate that year follow this kind of allocation process.

In this case, it does not make sense for any kinds of classified.

As House, after a series of reform, currently, at least in Shanghai, job market is similar to the other part of the world, and the good thing is, job classified starts to appear.

Car?

Car is not something impact by policy. It is very new since people just get rich enough to buy a car at the end of 1990s. 2000 is the year many people starts to buy cars – I bought my car in 2004.

So, no surprise, car classified started to boom, and second hand car classified will boom after 5 years of the first round of car boom, when people start to sell cars.

This is China

So, this is why the major categories of classified does not exist in China, and why they just started to boom. That is the reason I am so confident about classified business, although the current market is still in its early stage. It is not because China is not the place to start classified, or people don’t need it. It is just because of historical reasons and when the negative factors have been eliminated, it must have a boom.

This is China. So, there must be a historical reason for many things that many foreigners don’t understand. Some, like in this article, are because of the recent 100 years, and some, like culture stuff, are because of what happened 1000 years ago.

8 thoughts on “Why Classified is NOT Popular in China, Yet

  1. dezza

    i think if you took the word ‘classifieds’ and substituted it with ‘BBS forums’, then you’d have the same thing. In China, BBS forums serve a lot of the same functions classifieds do in the west, especially when it comes to buying/selling stuff (maybe not as big as houses/cars but everything else).

  2. elliottng

    Interesting. In the US, newspaper classifieds (including online) seem to be increasingly on the decline, replaced by Craigslist.org, Ebay, Match.com, AutoTrader, and other vertical solutions that are online. Do you think that the future is about solutions that are highly verticalized? Or a generic classifieds listing model like Kijiji / Taobao / Craigslist?

  3. elliottng

    BTW, is there any way to merge an old username with a new one? I used to post under elliott5 (elliott wu3, but ng in Cantonese) and wanted to get the comments tied to my real name. If not that’s ok. I like your comment history feature!

  4. Jian Shuo Wang

    @elliottng, unfortunately, there is no such a feature now. I just want to keep the comment system as simple as possible, but simple comes with costs. I don’t have authentication, so the user name is not very important in this comment system – anyone can choose to be anyone. :-) However, that works very well so far.

  5. Jian Shuo Wang

    @elliottng, my answer for your vertical or horizontal questions is: both. There are different needs for vertical or horizontal. Someone may need many features and services to hire a GM, but it may not be so to hire a waiter. So people with different needs go to different sites.

    However, my bet is, as you can imagine, the number of people who needs simple and free solution (although not so good) is bigger than specialized vertical. Just like general search or specialized search.

  6. Liam

    Just out of interest, where do you go for a second-hand car in Shanghai?

    I see advertisement boards etc but no clues for where they are, where to go to see them. Plus, how do we gauge the price here for them (this may sound a silly question but when you need to include the plate, insurance etc it makes it harder to appreciate “depreciation”). What’s the rate of depreciation in Shanghai? 30% initially and then 5% each year?

  7. oncerest

    second hand car, I guess, can be bought from car dealer. I would say this is a market which is not mature and with high risk, because of lack of credibility and trustworthy

  8. cintia

    A good read, Wangjianshuo :) In fact I relied on classifieds very much when I first came to Shanghai. With no friends and no network back then, all my jobs were found through classifieds: Chinahr and That’s (it used to be a very good one). enjoyclassifieds’ interface is good, but most of the listings are crap.

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