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The next dark horse in SaaS business

June 25, 2021

The US has already seen a $100 billion market cap for Shopify. What kind of dark horse will emerge from the Chinese SaaS market?

According to data provided by Builtwith, Shopify's share of the US e-commerce SaaS market has reached 31% in 2019, in addition to its latest market cap of more than $150 billion, already becoming a deserved leader in the SaaS space.

A set of data from the Head Leopard Institute shows that in 2020, the retail SaaS service market size reached 6.66 billion yuan, accounting for the highest share of 27.6% in the industry vertical SaaS service industry. In the context of the general industry trend, will Doddle Dmall set off the same huge wave?

In terms of specific financial data, Shopify's total revenue for the full year 2020 is US$2,929.5 million, up to 86% from 2019, and gross profit for 2020 is up 78% to US$1,541.5 million. Both the good revenue capacity and net profit could indicate that business SaaS is a successful direction for business innovation.

Shopify relies mainly on SaaS subscription services + merchant value-added services. On the other hand, Dmall is mainly a retail federated cloud digital solution + merchant value-added services with a similar business model. According to Shopify's financial results, subscription services revenue grew 41% to US$908.8 million in 2020, while merchant solutions revenue grew 116% to US$2,007 million. While SaaS subscription services grew steadily, merchant value-added services grew at a  faster rate.

Leveraging on the wave of consumer upgrade in China, several Chinese versions of "Shopify" may emerge in different segments. The disclosure of Dmall's Series C funding of RMB2.8 billion last year suggests that its Series C valuation is around US$3-4 billion. Although not the same as Shopify, Doddle Dmall's main entry is offline retail, which has a much larger market space。

At present, the main paying customers in the domestic business SaaS market are still mainly large enterprises, while SMEs are a potential market to be developed.

Under this situation, if Doddle Dmall can be closely bound to supermarkets, it can ensure its survival, R&D, and expansion in the early stage with the stability and paying ability of large customers, while at the same time it continues to reserve service capacity for the SME market through self-research and cooperation. If these strategic plans can be successfully realized, the number of its customers may be an order of magnitude increase.

【Source text: by report】

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