We provide (i) marketing and sales software solutions to enterprise customers in China by way of Software as a Service (SaaS), and (ii) precision marketing services that help advertising customers to place advertisements on leading media platforms, effectively reaching target audiences. In 2021, 2022 and 2023, we generated 50.0%, 46.4% and 57.0% of revenue from our SaaS business and 50.0%, 53.6% and 43.0% of revenue from precision marketing services, respectively.
Software as a Service (SaaS) is a web-based application software that users can access from various devices at any time. It eliminates the need for local software installation and maintenance, and is typically available through a subscription or pay-as-you-go fee model. We offer cloud-based marketing SaaS products to B2B enterprises, and sales SaaS products to B2B and B2C enterprises, to enable effective and efficient marketing and sales management. On the other hand, our precision marketing services, mainly including account management, traffic procurement, advertisement production and distribution, and marketing strategy formulation and optimization, are primarily offered to B2C companies. For our SaaS products, we primarily help users utilize free or low-cost internet traffic in both public and private domains, and charge our users subscription fees. Meanwhile, for precision marketing services, we purchase advertising traffic in public domain for customers from leading media platforms and charge customers based on the traffic procured.
We design and structure our SaaS products in a modular approach, providing flexibility in development, iteration and customization. As of December 31, 2023, we had 237 functional modules ready for use in our SaaS product. We select and package a series of functional modules as T Cloud (our signature marketing SaaS product) and True Client (our signature sales SaaS product) to address the pain points faced by enterprises in marketing and sales activities, respectively.
– Users can subscribe and add additional functional modules to their subscribed SaaS products to achieve more personalized results.
–Most of our users procure our products as a package. Revenue generated from procurement of a single functional module (as opposed to the package) accounted for less than 10% of the revenue from SaaS business in each year of the Track Record Period.
– We offer various versions of T Cloud and True Client, containing different number of functional modules to realize different level of marketing demands of customers, and our customers typically select and subscribe the versions we provide. The most basic version of T Cloud contains 38 functional modules which can conduct a complete marketing process, and the most extensive version contains 89 functional modules. For True Client, we offer 30 functional modules for the most basic version and 159 functional modules for the most extensive version, which can empower the entire sales process for users of different business sizes and sales force.
Leveraging our marketing experiences accumulated for over a decade, we provide advertising customers with two types of online marketing services, namely, online advertisement solution services and online advertisement distribution services, to help them effectively place advertisements primarily on top media platforms in China. Our online advertisement solution services primarily consist of advertising campaign planning, advertising content production, ongoing monitoring and real-time optimization, through which enterprises can improve their marketing results and conversion rates. Our online advertisement distribution services mainly involve account management as well as advertisement production and distribution.
At the core of our sales system is our direct sales team, which is dedicated to upholding our customer-centric tenet through exploring and addressing the needs of our customers. To fulfill our goal of being our customers’ lifelong partner, we have formed a customer success team that is designed to help our customers maximize the benefits from using our SaaS products. We seek to maintain mutually beneficial relationships with customers and have gained the trust of customers across the full spectrum of industries, presenting us with further cross-selling and up-selling opportunities.
In 2021, 2022 and 2023, the number of the users of our SaaS business amounted to 24,127, 23,647 and 25,495, respectively; during the same years, for our SaaS business, the average contract value per user of our SaaS business was RMB45,026, RMB41,584 and RMB51,238, respectively. We have also built a diversified customer base for precision marketing service business, with a proven track record for serving leading enterprises with a strong willingness to pay. In 2021, 2022 and 2023, we served 845, 998 and 1,042 advertising customers, respectively, with the average spending per advertising customer being RMB5.5 million, RMB5.9 million and RMB6.1 million respectively.
We experienced rapid growth during the Track Record Period. Our revenue increased from RMB877.2 million in 2021 to RMB1,142.8 million in 2022 and further to RMB1,232.1 million in 2023. During the Track Record Period, we have achieved a strong development in the SaaS business, with its revenue increasing from RMB438.6 million in 2021 to RMB529.9 million in 2022 and further increasing to RMB702.4 million in 2023, at a CAGR of 26.5%. Notwithstanding the slight decreases in the number of users and the average contract value per user of our SaaS business in 2022 as compared to 2021 due to the adverse impact of the COVID-19 pandemic, our revenue from SaaS business increased from 2021 to 2022, primarily attributable to our fulfillment of contracts that were entered into in 2021. In 2021, 2022 and 2023, the gross margins of our SaaS products were 90.1%, 89.2% and 87.7%, respectively. In 2021, 2022 and 2023, our revenue from our precision marketing service business was RMB438.6 million, RMB612.9 million and RMB529.7 million.
Source: Marketingforce (02556) Prospectus (IPO Date : 2024/05/07) |