Aug. 6 (NBD) -- Chinese SaaS (Software as a service) firms find new chances of expansion from the mini program eco of tech behemoths.

As Tencent's flagship social app with more than 1 billion monthly active users, WeChat has become a traffic pool for merchants. WeChat provides entry and payment method for various platforms in its mini program column so that merchants are able to join WeChat's eco. 

Tencent now is exploring new application scenarios for the mini program platform. The latest update shows the mini program has added 10 more new functions to the platform. WeChat team introduced in an open class that the app has over 1 million mini programs with more than 1.5 million developers and 5,000 third party development platforms.

Currently, a batch of e-commerce SaaS vendors including Youzan, Weidian, Weimob and Dodoca emerged from the WeChat's eco. By connecting to the social app, those vendors can achieve personalized operation leveraging user hierarchy and help merchants gain profits from traffic.

Guan Yu, chief marketing officer of China Youzan Ltd., introduced that the company started to cooperate with Tencent early this year. Holding the huge traffic pool and data base, the technology firm can find out potential users for Youzan with targeted advertising, noted Guan.

Apart from Tencent, another two giants have also made inroads into the mini program field.

The e-commerce firm Alibaba also added the mini program column to its online payment app Alipay last year. Moreover, Chinese technology behemoth Baidu announced launch of the smart program solution on Baidu Create 2018 held on July 4 this year. 

Given that the three titans are not involved in SaaS products area, their new move will create new opportunities for further expansion of the SaaS enterprises. 

According to data from the market data provider IDC, the China's enterprise SaaS market is expected to grow at a compound annual rate of over 35.7 percent in the coming 5 years. It is noted that though the market has an optimistic prospect, the majority of SaaS firms are still unable to be profitable. 

As for the profit model of SaaS enterprises, Bai Ya, CEO of Youzan, held that the firms will begin to gain earnings from the fourth year since the start of the company and cover all its investments one year later. 

Founded in 2012, Youzan broke even in the second quarter of 2017, and made profits in the third quarter of last year, Bai revealed.

On April 19 this year, Youzan completed its back listing in Hong Kong, and the company is valued at over HK$6 billion (764.5 million U.S. dollars).

 

Email: zhanglingxiao@nbd.com.cn

Editor: zhanglingxiao