51Job Comments on Strategy of Competitor ChinaHR

During last night's 51Job earnings conference call Citigroup analyst Jason Brueschke asked about any plans to mirror the marketing strategy of Monster Worldwide (MNST) backed competitor ChinaHR:

Jason Brueschke – Citigroup

And if I could switch gears and ask one final, but related, question. We have seen ChinaHR, from our vantage point they seem to have spent a lot on marketing in the second quarter. You reference that in your prepared remarks that they have helped evangelize or educate the overall market.

I remember on the Q4 conference call you had indicated that there was a possibility, in anticipation of the big increase in marketing spend from ChinaHR and other competitors, that you might sometime during this year feel compelled to match, or at least counter, those moves by increasing your sales and marketing as well.

From what you’ve seen as to the effectiveness of this marketing campaign by ChinaHR or some other competitors, at this point do you feel you need to do anything different on your own sales and marketing front to counter this, or do you have such a strong market position and lead that you feel you can continue to do business basically the way you have been doing it recently?

Rick Yan - CEO, 51Job

So far this year we have seen a lot of advertising spend by ChinaHR on TV and other media. We have been monitoring their customers and also job postings, again on a weekly basis, very closely. We have not seen any meaningful change in our market position. In other words, I think our sales driven strategy proves to be very effective in terms of capturing additional demand or customers that might switch to online after seeing their ad, but actually the customer might actually place an ad with us rather than our competitors.

So I think at this stage we have no intention to match the – let me call the “above the line” -- advertising spend that our competitors are doing. We will continue with our sales-driven strategy and continue that. Now obviously, there might be a time lag between the impact of an advertising spend, we don’t know. But so far, up to now we have not seen a meaningful impact from the advertising spend that ChinaHR has done. We will continue to stick to our current strategy.

Related:

Latest Conference Call Transcripts from Seeking Alpha.

Why We Publish Transcripts of Earnings Conference Calls.