As Chinese SaaS (software as a service) companies go global, they must use brand thinking to maximize their competitive advantage and develop a sustainable model for success in foreign markets.
The trend of Chinese companies looking beyond their borders for growth opportunities shows no sign of abating. These companies are also increasingly diverse in terms of their industry and overseas development model. Amongst the new generation of global Chinese companies, we find more and more SaaS vendors. What specific challenges do these players face when developing abroad and how can brand thinking help them build the right conditions for success?
The Chinese SaaS market differs immensely from other major markets in terms of overall maturity, client needs, user demands, price sensitivity, etc. Chinese SaaS players frequently exhibit a similar or higher level of technical sophistication as their foreign counterparts but sometimes have trouble matching this technical edge with proper product-market fit.
This is why we recommend all Chinese SaaS players dig deep to understand foreign markets on different levels, including but not limited to:
At a macro level, this process can help guide decisions on which markets and industry verticals to develop in priority based on competitive pressures and proximity to current offerings. It might yield unexpected findings, revealing profitable and unaddressed niches that can be used as a springboard for foreign expansion.
At a micro level, user insights are also critical to getting bottom-up product traction through best-in-class user experience. Compared to China, SaaS adoption in foreign markets tends to be more decentralized and reliant on end-user experience, making product design a critical success factor for any new entrant. It is thus critical for Chinese players to not limit themselves to macro-level market and buyer research but also integrate UX research as a core part of their global expansion plans.
Foreign development often requires Chinese SaaS companies to pay greater attention to the clarity and distinctiveness of their brand value proposition. Chinese SaaS product suites indeed tend to be very comprehensive, emphasizing richness of features and power of underlying technology. This reflects a relationship model often built around heavy customization in which buyers value flexibility and personalized service. In many ways, many Chinese SaaS companies resemble IT and development companies more than internet product companies in their branding and communication.
Most foreign SaaS markets, on the other hand, especially mature ones like North America, favor standardized delivery built around a limited amount of core features that directly answer precise operational use cases. Foreign expansion thus often requires Chinese companies to sharpen their brand value proposition, laying out use cases, jobs to be done, and user benefits in a much more granular way than they are used to.
Many Chinese SaaS companies pursue a development model heavily reliant on sales and key account relationships. Such a model presents obvious scalability issues, especially when pursuing overseas development, hence the need to develop a product-led growth strategy when preparing for foreign expansion.
Product lead growth starts at the interface level. As we alluded to earlier, while Chinese SaaS companies frequently beat competitors in terms of technology, it is often that they fail to make this technology easy and pleasant to use. Brands with global ambitions must thus double down on building products that don’t just conform to global UX standards but stand out through their intuitiveness.
Beyond interface design, product-lead growth also requires to re-think the broader user journey with a particular focus on items that can maximize adoption, retention, and organic recommendation such as:
It should be noted that product-led growth demands rapid product design iteration and reactivity to user feedback, thus testing the management processes and structures underpinning companies’ global expansion and putting companies operating according to rigid command and control from HQ at a disadvantage.
It is our firm belief that we will see many Chinese SaaS success stories on the global stage in the years to come. In many verticals such as AIGC, live streaming, smart manufacturing and e-commerce ERP; Chinese players have an ingrained technology and experience advantage that could make them market leaders. In other more established verticals, they can disrupt incumbents through agility, focus, and design innovation, especially in emerging markets.
However, going global will in almost all cases represent a total commitment requiring coordinated efforts on insights, branding, and product design. Contact Labbrand or leave your comment below to find out how we can support you to make this commitment a success.
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