Image source: Visual China
Recently, it was reported that DingTalk has defined going overseas as a strategic-level project, and has selected candidates from several internal departments to form a mixed team. DingTalk responded that it does have a relevant layout, and its internationalization strategy is currently mainly to serve the overseas needs of existing Chinese customers.
DingTalk is a smart mobile office platform launched by Alibaba Group in 2014. According to the data, by the end of 2023, the number of DingTalk users will reach 700 million, and the number of monthly active users ranks first among similar products in China.
DingTalk's internationalization strategy began in 2018, when it was first launched in English in India and Malaysia. In 2020, the new crown epidemic led to the transformation of office models, and the global collaborative office software market ushered in a big explosion, and DingTalk took advantage of the situation to launch an overseas version of DingTalk Lite. At present, DingTalk has realized the functions of synchronous language translation for cross-border meetings, multi-time zone attendance, cross-time zone scheduling, and cross-regional clock-in. Chat and video conferencing support 15 language translations.
In the wave of Chinese enterprises rushing overseas to find growth, a productivity tool that can achieve global real-time collaboration and transnational management has become a rigid need for overseas enterprises. SaaS platforms, including collaborative office tools, are accelerating their going overseas, which is a good trend, and for enterprises that are deeply involved in the stock competition of China's domestic SaaS market, going overseas is also a necessity.
China's collaborative office market has been in turmoil for several years, forming a "three-legged" situation of DingTalk, Feishu, and WeChat, while new players have continued to enter the game in the past few years, including Baidu Ruliu, Huawei WeLink, NetEase Lingxi, Pinduoduo's Knock, etc.
The domestic collaborative office market is highly competitive, while the growth rate of the market size is slowing down. According to iResearch's forecast, the collaborative office market is expected to reach 37.1 billion yuan in 2024, a year-on-year increase of 12.3%. Compared with the outbreak of the epidemic in three years, the industry has calmed down and entered a period of stable growth.
At the same time, due to the downturn in the economic environment, capital tends to be cautious. iResearch pointed out that since entering 2021, the number of financing transactions in the SaaS track has shown a trend of declining year by year. The growth model of burning money to buy scale has exposed its drawbacks, and SaaS companies that lack positive cash flow and a healthy profit model will be eliminated from the market at an accelerated pace.
In addition, profitability has always been a topic that DingTalk can't avoid. According to the "2021 China SaaS Survey Report", the payment rate of office software in mainland China is less than 15%, while the payment rate of office software in the European and American markets has exceeded 70%. DingTalk initially opened the market quickly through the free model, but the road to commercialization has not been smooth. Ye Jun, president of DingTalk, admitted that the users of DingTalk are basically free now, and the number of paid ones may be less than 1%.
Going to sea is a card that has to be played.
Compared with China's office collaboration market with a scale of more than 30 billion yuan, the global market is several times the size of the cake. According to iiMedia Research, the global collaborative office market is expected to reach $48.1 billion this year, with an average annual compound growth rate of about 10% in the next three years.
Collaborative office software is already competing on another battlefield. In addition to DingTalk's announcement to enhance its strategic position in going overseas, Feishu, which started overseas and moved to China, announced last year that it would shift its business focus back to overseas markets, focusing on Japan, Southeast Asia, Europe and other regions. Kingsoft Office's WPS is also increasing its weight in the B-end enterprise application market, and this year it released the enterprise version of WPS AI products, adopting a free model in overseas markets to attract users.
However, for collaborative office software that is trapped in stock competition and commercialization in China, going overseas does not necessarily mean a breakthrough.
In its response to "defining going overseas as a strategic project", DingTalk said that its internationalization strategy is mainly to serve hundreds of Chinese companies with overseas operations, including JinkoSolar, Trina Solar, and Sungrow. This kind of "hitchhiking to the sea" that gives priority to meeting the collaborative management needs of Chinese enterprises overseas certainly solves the problem from 0 to 1, but how to pass on the value of products to the larger market is a process from 1 to N. Only by going through this road can we truly achieve a breakthrough.
The ultimate question to be answered by Chinese collaborative office software going overseas is: how to convince an overseas company to use a set of software from China for office collaboration?
iResearch's report found that limited by many factors such as product recognition, brand communication, security compliance constraints, and user experience, the performance of SaaS vendors overseas is not eye-catching. On the whole, there are common cognitive misunderstandings among domestic SaaS manufacturers going overseas, and the idea of reusing the successful experience and business model of domestic SaaS does not work overseas.
For example, many SaaS products, including collaborative office software, have been converted into multi-language versions and released to overseas markets after gaining recognition in China, ignoring the UI preferences of different regions. Reuse domestic solutions and customer success ideas, ignoring cultural differences and user needs; After being verified in the Southeast Asian market, it was directly promoted to Europe and the United States, ignoring the differences in the degree of digital development and competition.
The biggest difference is in the product concept. In order to get a share of the red sea in the domestic market, China's enterprise service software often carries out in-depth customization according to the needs of thousands of people and thousands of people in the enterprise, and constantly superimposes services, and the product becomes a comprehensive behemoth. After this concept is replicated abroad, it will not only further increase the cost of enterprises, but also raise the threshold for use because the product is too complex. In fact, in foreign markets dominated by PLG (product-driven) models, customer needs are often precise and simple.
Xu Shi, founding partner of Shanxing Capital, believes that in the SaaS field, Chinese products tend to pursue large and comprehensive products because of the business environment, and overseas products often choose small and beautiful in the early stage, and the latter can stand. "That's the huge difference in the values of doing business. If entrepreneurs focus on a subdivision track and do a good job in a small and beautiful company, they don't have to worry about being surpassed by large factories, because it is likely to be sold for tens of millions of dollars or hundreds of millions of dollars. ”
Xu Shi pointed out that the current domestic business environment is very volatile with each other, and it is difficult to escape the gravity of product innovation homogenization, and it may evolve to the stage of differentiated competition in the future.
In addition to internal factors such as cognition and product concept, there are also external factors for Chinese SaaS companies to break through the situation overseas.
After stepping out of the country, these SaaS companies find themselves stepping into another red ocean. The global SaaS market is also extremely competitive, and China's collaborative office software has to compete with Teams, Slack, Zoom, and other giants that already occupy the majority of the market share. To compete, in addition to the core competitiveness of the product itself, there are many additional factors such as management philosophy, culture, and values.
At the same time, global economic uncertainties are still increasing, and Chinese and foreign companies are reducing costs and increasing efficiency. Therefore, for DingTalk, now may be the worst time to go to sea, and perhaps the best time. (Fortune Chinese Network)
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