China Is Next Frontier in SaaS Revolution - Seite 2

The SaaS Tsunami

Beyond structural trends and increased business acceptance of cloud services, the Chinese government also advocates for cloud adoption, issuing Guidelines for Promoting Enterprises to Move Business to Cloud Platforms in 2018. Cloud migration also accelerated with the emergence of COVID as work became remote. One million new Chinese companies planned to conduct business with cloud computing services last year alone. A transformational disruption is underway, evidenced by the CMIIT forecast that China's cloud market would experience a dazzling 30% compound annual growth rate through 2023.

Even that stellar forecast could be a low estimate. As the idea of digital transformation sinks in and rises to become the hottest topic across industries in China, mid-to-large and leading enterprises in various industries have a high tendency to try out new digital and cloud-based solutions such as customer-engagement solutions, enterprise resource planning (also known as ERP solution) and operation solutions. At the same time, well over 90% of companies in China are still small- to medium-sized enterprises (SMEs), which contribute roughly 60% to China's GDP. Normally SMEs don't have sufficient cash reserves to invest in hardware and software upgrades, but millions of SMEs can afford the SaaS subscription model to improve their customer service, reduce costs and increase revenues.

This together represents an enormous underserved and untapped market, while tapping this burgeoning market also presents a real challenge for most SaaS companies in China. Chinese SaaS companies face challenges on how to achieve better balances on the mid-to-large enterprises and SME markets, as mid-to-large enterprises tend to have various customization needs but with potentially larger and more stable revenue contribution to the company, while SMEs mean smaller and less stable revenue contribution but also lower customization needs. Yet the market is there, and whoever can best solve this balance dilemma and quickly expand the market with standardized solutions will emerge as the next industry leader.

Riding the Wave

Infobird Co. Ltd. (NASDAQ: IFBD) is one of the few SaaS companies in China that has the capability to transition into a standard SaaS business model and to serve both the mid-to-large enterprises and SMEs under its standardized platform by leveraging its no-code development platform. A leading SaaS provider of patented, innovative AI-powered, customer-engagement solutions in China, the company earned its stripes by creating and delivering customized SaaS solutions for some of the largest commercial banks in the nation. Coming off a successful IPO, Infobird is now expanding its target market and rolling out standardized SaaS modules to service a myriad of other enterprises.