2022 China’s Enterprise SaaS Industry Report

Source:iResearchJanuary 04,20233:19 PM Overview

In 2021, the size of China's enterprise SaaS market was 72.8 billion yuan. Its YoY growth rate dropped from 48.7% in 2020 to 35.2% in 2021. The macroeconomic downturn has led to great pressure. The reduced total demand for enterprise SaaS will cause a sharp decline in the industry's growth rate. It is estimated that in 2022 the growth rate of the SaaS industry will fall below 10% for the first time. The growth of the SaaS industry in the next three years will rely on the speed of macroeconomic recovery. According to neutral expectations, China's enterprise SaaS market is expected to reach 120.1 billion yuan by 2024, with a compound annual growth rate of 18.1% from 2021 to 2024.

With deepening businesses and the accumulation of service experience, the boundaries between SaaS products in some tracks are increasingly blurred. SaaS vendors begin to deploy multiple product lines at the same time. Business growth SaaS vendors start to expand their business layouts in marketing and CRM. Finance and taxation and HRM tracks gradually mature. Vendors accelerate their integrated layout. SaaS tools penetrate horizontally and are integrated with specific business scenarios to exert their value.

In the future, the opportunities for the SaaS tracks will lie in tapping demand and technological dividends and taking advantage of hybrid office, policy reform, and productivity reshaping. The Covid-19 pandemic leads to the fast popularization of products such as enterprise collaboration and mobile office. Such products have low thresholds and application scenarios with rigid demand. Once the business model is formed, it is expected to grow rapidly. SaaS vendors also need to focus on improving their own competitiveness mainly in four aspects: PLG subtractive thinking, enriching sales forms, accumulating industrial background, and exerting non-scale network effect.

Overview of the Development of SaaS Vendors in China

Digital transformation is necessary for contemporary enterprises if they are to survive.  However, most of them don‘t have a plan for effectively carrying out digital transformation. From top-level design to implementation, digital transformation faces many difficulties such as high investment, high risk, and long cycle. Thus, SaaS with characteristics such as subscription payment, agile deployment and fast verification is worth a try. According to iResearch, in 2021 the size of China's enterprise application software market was 259.2 billion yuan, of which SaaS accounted for 28.1%. SaaS plays a key role in the application scenarios in enterprises' digital transformation. It is usually the direct starting point for the digitalization of specific links. Numerous enterprises in all kinds of industries find the value of digital technology/tools in actual business scenarios, Maximizing the role of SaaS as a digital scenario incubator.

Size and Forecast of China's Enterprise SaaS Market

According to iResearch, the size of China's enterprise SaaS market reached 72.8 billion yuan in 2021. The  YoY growth rate dropped from 48.7% in 2020 to 35.2%. The SaaS industry benefited from remote work at the beginning of the outbreak of Covid-19. However, it is now affected by the macroeconomic downturn and the reduction of total demand. Its growth rate is estimated to drop below 10% for the first time in 2022. The growth of the SaaS industry will rely on the recovery of the macroeconomy in the next three years. Under neutral expectations, the scale of China's enterprise SaaS market will reach 120.1 billion yuan in 2024, with a compound annual growth rate of 18.1% from 2021 to 2024.

Size of the Enterprise SaaS Market Segments in China 

In 2021 the size of the business vertical SaaS market in China reached 38.9 billion yuan, increasing by 33.2% year on year. In the category of business growth, CRM/SCRM benefits from businesses' open source needs and obvious benefit advantage. Tax and finance management in the category of operation and management benefited from paperless policies. Collaborative synthesis in the category of collaborative office has entered the stage of commercial monetization. Their growth rates are higher than the average growth rate of the business vertical segment.

China’s Enterprise SaaS Market Structure and Forecast 

According to iResearch, in 2021, the business vertical segment and industry vertical segment accounted for 53.4% and 46.6% of the scale of China's enterprise-level SaaS market, respectively. With the increasing uncertainty of the macroeconomy, some industries have experienced large fluctuations due to the pandemic or policies since 2021. Business vertical products have strong versatility among different industries. The industry vertical SaaS products are weaker in handling systemic risks. It is forecasted that the proportion of the industry vertical segment will continue to grow in the next three years but at a lower rate.

China's Enterprise SaaS Industry Map

China's Enterprise SaaS Industry Map

The Convergence Trend of SaaS Tracks 

With the deepening of businesses and the accumulation of service experience, the boundaries between SaaS products in some tracks are more and more blurred. SaaS vendors have begun to deploy multiple product lines at the same time and connect service links. Since the SaaS products for business growth are more mature and mostly target to increase the sales conversion rate directly or indirectly. This form of cross-track product line layout is obvious among business growth SaaS vendors. For example, some CRM, SCRM, enterprise livestreaming and content creative vendors expand to the marketing field, and some CRM vendors develop intelligent customer services or call center business to increase customer reach rate.

Business Layout Ideas of SaaS Vendors

Comprehensive cloud vendors try to better match market supply and demand through the form of cloud service complex

Table of Contents of the Full Report

Abstract


1 The Chinese SaaS Market is Closely Related to the Global SaaS Market
1.1 Overview of the Global SaaS Market
1.2 Status Quo of the SaaS Market in the U.S.
1.3 valuation of the SaaS Market in the U.S.  
1.4 Enlightenment from Overseas Markets: India
1.5 Enlightenment from Overseas Markets: Deel
1.6 Overseas Performance of Chinese SaaS Vendors
1.7 Overview of the Development of Chinese SaaS Vendors

2 Industry Chain Analysis 
2.1 Size and Forecast of China‘s Enterprise SaaS Market
2.2 Size of Enterprise SaaS Market Segments in China 
2.3 Enterprise SaaS Market Structure and Forecast in China  
2.4 China’s Enterprise SaaS Industry Map
2.5 Integration Trend of SaaS Tracks
2.6 Valuation of Enterprise SaaS in China  
2.7 Investment and Financing of Enterprise SaaS in China


3 Analysis of the Core Players in the Industry Chain
3.1 Value Positioning of Channel Systems of SaaS Vendors

3.2 Cooperation between SaaS Vendors and Channel Providers

3.3 Benefit Distribution Between SaaS Vendors and Channel Providers
3.4 Application of SaaS in the Cloud Market
3.5 Analysis of Models in the Cloud Market 
3.6 Alternative Relationship between SaaS and Low-code

3.7 Combined Development of SaaS and Low-code

3.8 Complementary Development of SaaS and Low-code

4 Case Study of Typical SaaS Vendors in China
4.1 2haohr
4.2 360 Enterprise Security Cloud
4.3 Authing
4.4 Lingque
4.5 Qianmi
4.6 SUNKE.COM
4.7 Tencent TAPD
4.8 Wangshang Guanjiapo
4.9 Xuanwu Cloud


5 Development Trends in China’s SaaS Industry
5.1 Opportunities for SaaS Tracks
5.2 How Can SaaS Vendors Improve Core Competitiveness  
5.3 SaaS Vendors’ Business Layout  


Contents

The development of the SaaS market in China is closely related to the advancement of the global market. In the past year, the development of global SaaS has slowed down. SaaS giants in America face problems such as weak growth, losses and low stock prices. But some new vendors in emerging countries are rising, such as those in the Indian market. Chinese enterprises need to realize that overseas listing is no longer a key to success. They need to work on the digital transformation demand of Chinese enterprises to survive.

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