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Chinese SaaS Providers Jockeying for Position

China’s SaaS (Software as a Service) market is a buzz in 2021 with a sharp rise in investments and public offering since the beginning of the year. The sector has seen more than CNY 1.8 Billion in financing since January.

Two of China’s leading SaaS providers — Weimeng’s stock, the operator of Weimob, a WeChat-based CRM solution provider that helps businesses to build m-commerce platforms, rose by more than 140%; , and Youzan, a provider of e-commerce SaaS for WeChat stores, saw its stock price rise by more than 100%.

Although this increase of interest from investors have also created sharp fluctuations in stock prices and increase volatility, the sector itself seems to be on the rise. This does not mean, however, that all companies in the market are currently on a stable footing. The market is characterized by thousands of small and upcoming service providers with only a handful of SaaS giants – and virtually all domestic.

As investments into the sector are expected to flow, I believe we will see the market coalesce around a few leading companies in each subsector with the usual affiliations to the China’s tech giants such as Alibaba, Tencent, and Jingdong. And, as in other internet sectors, global leaders such as Shopify, Salesforce, and the like will be left on the sidelines.

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