NetworkNewsWire
Editorial Coverage: As China’s population nears 1.5 billion and
internet use is rising at an explosive rate, the prospects for SaaS
Enterprise Solutions and online marketing look brighter than
ever.
With a record number of people in China spending time online
reading new, playing games, shopping and participating in social
media, Software as a Service (SaaS) and digital marketing may be
more effective than ever. iClick Interactive Asia Group
(NASDAQ: ICLK) (ICLK
Profile) is among the leading providers of independent
online marketing and enterprise SaaS solutions in China, supplying
integrated tools for analyzing and improving advertising and
marketing performance. Shopify Inc. (NYSE: SHOP)
powers over 1 million businesses worldwide through its all-in-one
commerce platform that helps its partners start, run and grow a
business. Adobe Inc. (NASDAQ: ADBE) is online
platform that integrates eight marketing solutions and includes
professional services and support. A pioneer in offering online
services, DocuSign Inc. (NASDAQ: DOCU) has created
the world’s first “Agreement Cloud.” Zuora Inc. (NYSE:
ZUO) is the world's premier SaaS billing platform
optimized for subscription businesses.
- Chinese online users have tripled over the past 11 years,
creating impressive growth for an array of companies operating in
the SaaS space.
- Smart organizations are using big data, AI to effectively reach
target audiences.
- Strong portfolio of customers, partners driving these
developments across Chinese parts of the internet.
To view an infographic of this editorial, click here.
Robust Economic Growth Creating
Opportunities
China has a flourishing middle and upper-middle class, fueled by
its healthy economic growth over the past few decades. The
fast-growing Chinese wealth has created significant consumer
opportunities for both domestic and foreign companies to expand
their businesses to.
Along with that, software adoption has been increasing as well,
especially in the advertising and marketing sectors, as companies
around the world seek to effectively target and market to Chinese
customers, especially digitally where the Chinese consumers spend
much of their time. With untold potential online customers and the
growing wealth of businesses wanting to target them, tremendous
potential exists in the Chinese digital advertising industry.
Flourishing Marketing, Enterprise Software
Solutions
In this context, companies providing marketing and enterprise
SaaS solutions are flourishing. One of the rising stars of the
sector is iClick
Interactive Asia Group (NASDAQ: ICLK).
iClick is a proprietary, marketing-technology platform targeting
Chinese consumers. The company’s data-driven analytical approach
provides targeted advertising in a market that has historically
been underserved but is increasingly online and accessible to such
marketing.
iClick is riding a rising wave of internet usage in China, as
the general population steadily increases its standard of living
and China exceeds the West in internet usage. In 2008, internet
users in the country numbered 298 million; by the first half of
2019, that number had
reached 854 million — nearly triple in only a decade. And that
trajectory is expected to continue.
It’s a sign of the power of this market — and iClick’s ability
to take advantage of that power — that iClick has experienced more
than 30% year-on-year growth. The company is not only expanding
into a current market but exploring previously unknown online
market segments. Different companies approach this opportunity in
different ways. For iClick, success has come from a growth strategy
founded on two pillars: marketing solutions and enterprise SaaS
solutions.
iClick’s core business – marketing solutions – operates in a
different environment in China than in the United States. With
predicted CAGR of 23%, China’s digital advertising industry
significantly outpaces the 13% CAGR of its America peer.
Furthermore, digital marketing in the United States is largely
controlled by the big three — Amazon, Google and Facebook — while
in China, the market is fragmented. This situation presents
abundant opportunities for innovative companies to grow and benefit
from economies of scale and the fragmented nature of the
market.
This market also creates impressive opportunities for brands and
retailers, which is where iClick’s enterprise SaaS solutions may
become relevant. By providing full online-to-offline data
integration and analysis, enterprise SaaS solutions may help brands
increase repurchase rates and customer allegiance through building
a 360-degree detailed consumer profile. This leads to high gross
margins for companies providing SaaS solutions in this area, with
stable recurring revenues; iClick, for example, had a target of $10
million for enterprise SaaS solutions in 2019 and estimates its
revenues may double to more than $20 million in 2020.
Benefits of Big Data, Intelligent Analysis
With almost 1.5 billion people living in China — and many of
them becoming avid online users — marketers in the country stand to
benefit significantly from the deliberate use of big data and smart
analytics. If marketers can tap into the data these online users
are providing and discover ways to transform that information into
actionable insights or targeted marketing, they could see
impressive levels of consumer engagement.
iClick has a substantial advantage in this space. The company
currently has more than 820 million Chinese consumers’ datasets,
providing a solid basis for comprehensive data analysis. But data
is only as useful as the analysis that can be drawn from it. To
achieve this, companies are implementing AI-driven tech to identify
actionable insights. Manual approaches and old-fashioned software
can’t handle the sheer volume of data being gathered, nor can these
more traditional processes produce the level of insight companies
seek in order to target advertising.
With its proprietary AI-driven, end-to-end marketing solutions,
iClick stands at the front of the market. These unique solutions
not only accurately identify and engage potential customers, they
also provide actionable business decisions based on the analyzed
consumers’ behavioral information. This is the sort of effort that
provides the backbone of SaaS — a specialist company providing
services on a scale and level that most businesses are unable to do
in-house. Its exclusive approach has won the company accolades,
with CEO and co-founder Sammy Hsieh winning an EY Entrepreneur of the Year China 2019 Award in
Technology.
A Strong Portfolio
Companies grow best in this space when they build a strong
portfolio of customers and partners that produce not only revenue
but also valuable data. Work completed for customers feeds into the
analytical engines, creating a situation where strong relationships
become self-fulfilling prophecies as key partners provide a company
with the influence and credibility it needs to attract new business
and build more relationships.
This powerful process is evidenced in iClick’s strong roster of
customers and partners. The company serves more than 2,500 top-tier
clients, including Nike and eBay. In addition, iClick is a platinum
partner of Tencent and the largest overseas partner of Baidu.
Not surprisingly, these partnerships have proved beneficial for
iClick. The company has developed an admirable cash position along
with the chance to pursue fund support from HSBC for increasing
business growth. As both its partnerships and the pool of online
users expand, iClick eyes continued expansion of its SaaS work.
The value of these Chinese-focused companies appear
underappreciated in the eyes of many. iClick is trading at a
fraction of comparable prices of many of its SaaS competitors.
Realization of innate value will come with the recognition that the
population of China has moved online and marketing to this group
can produce outstanding returns. With marketing automation in the
massive country presently only at 10–15%, compared with to more
than 50% in the United States, a remarkable opportunity exists to
increase data-driven smart marketing — an opportunity that iClick
appears ready to monetize.
Selling to the Online Market
Offering online services is clearly a burgeoning market, with
many savvy companies entering the space.
A SaaS pioneer and now a leading global commerce company,
Shopify Inc. (NYSE: SHOP) has seen significant
growth, recently reporting total
revenue for FY 2019 of $1.578 billion. “2019 was a milestone
year for us,” said Shopify CEO Tobi Lütke. “We’ve earned the trust
of more than one million merchants, and we are motivated more than
ever to keep lowering the learning curve so anyone, anywhere can
become an entrepreneur.” Shopify provides tools for its
one-million-plus merchants in more than 175 countries to start,
grow, market and manage a retail business of any size. Shopify’s
platform and services are designed to deliver a better shopping
experience for consumers around the world.
Recognized as a leading digital marketing suite, Adobe
Inc. (NASDAQ: ADBE) offers an online platform that
provides its customers with everything from support and community to partners and consulting.
Through its support services, Adobe delivers tutorials, manuals and
troubleshooting. The Adobe Marketing Cloud community allows
customers to talk with each other and find help from Adobe experts.
The platform includes interactive agencies and consulting firms as
well as a network of consulting partners that provide expertise and
best practices tailored to a customer’s specific needs.
With 500 customers and hundreds of millions of signers around
the world, DocuSign Inc.’s (NASDAQ: DOCU)
Agreement Cloud automates and
digitalizes the entire agreement process. A pioneer in
electronic signatures, the company offers a suite of applications
allowing companies to send and sign with eSignature, automate
agreement workflows and management, streamline agreement generation
and approval, and even use AI to search and analyze documents by
legal concepts.
Zuora Inc. (NYSE: ZUO) has recognized that the
subscription economy is forcing companies to adopt new core enterprise systems to support SaaS billing
models. Traditional ERP solutions aren’t equipped for these new
billing models. Zuora Billing is the world's premier cloud-based
billing platform optimized for subscription businesses regardless
of the size or industry. ZUO is capable of supporting a range of
needs, from a single company with one monthly subscription service
to an enterprise with a large product portfolio and complex
usage-based pricing.
SaaS plays a powerful role in online marketing, and as Chinese
internet use grows, so will the role of SaaS — and companies
operating in that space. iClick appears to be well positioned to
take advantage of the growth and scale of these industry
opportunities.
For more information on iClick Interactive Asia Group, visit
iClick
Interactive Asia Group Ltd. (NASDAQ: ICLK)
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