Date
20 September 2017
Chairman and chief executive Robert Xu is on the lookout for mobile internet companies and those with innovative products.
Chairman and chief executive Robert Xu is on the lookout for mobile internet companies and those with innovative products.

Kingdee hungry to bulk up Bizchat

BizChat is still at a trial stage, but already Kingdee International Software Group Corp. Ltd. (00268.HK) is on the lookout for mergers and acquisitions to expand the platform’s services, chairman and chief executive Robert Xu said.

BizChat, which will be officially launched next month, is a WeChat-like application for internal business communication. Staff can use it within the company to communicate, check in for work, submit documents and apply for claims, among other functions.

Kingdee also offers a cloud hub for uploading or transferring documents, which could be used to improve internal communications, information sharing and collaboration. Staff can use it to upload or transfer documents, post business events and create a community to interact with customers, vendors and partners. Both applications are available on mobile and desktop. 

“We are looking at mobile internet companies and those with innovative products to add value to our offerings in the next five years,” Xu told the Hong Kong Economic Journal’s EJ Insight.

“For example, we have been working with Anhui USTC iFLYTEK Co. Ltd. (002230.CN) to provide speech-to-word translation services in BizChat. We can simply work together or even buy a company if we see functions that can complement our products or increase the data flow,” he said.

Xu said Kingdee’s biggest buying interest is in better services for customer relations and service management, but he did not specify how much capital had been earmarked for acquisitions.

“An innovative company may not be big — probably requiring just a few million yuan, while we might only be a small or strategic investor in large corporations,” he said.

According to the company, “the number of paid terminals [for Bizchat's mobile platform and application] in 2013 jumped almost fivefold from 2012”, while “businesses are convinced that the paid mobile subscription model is more flexible and efficient for their IT systems”.

Mobile medical

The Shenzhen-based company’s products cover various industries, from manufacturing and services, to property development and car dealerships. It has also set up a subsidiary for medical software technology.

It is working on improving a newly launched mobile application for doctor registration in hospitals to shorten queues and increase patient satisfaction. Kingdee charges hospitals for the service but offers it free to patients.

“We launched the service in Guangdong first because we have quite a lot of clients in the province. Then it will be rolled out slowly to the whole country,” he said.

“We see huge growth opportunity in the sector and expect our income to grow by half this year.”

The medical subsidiary already has a few apps on the market, including one to help doctors check patient histories and advise on medications on ward visits.

Five-year plan

Kingdee’s other interest is in becoming the biggest cloud management service provider in China within five years, a goal it hopes to achieve through synergies between its enterprises resources planning (ERP) business and cloud operations.

“To be the biggest, we will need to grow to 30 million corporate clients from 3 million now, while the number of users including individual and corporate will be in the billions from the 20 million to 30 million we have now,” Xu said. The number of partners will also expand by 10 or even 100 times, he added.

“To meet those targets, we will focus on establishing our three products, namely the cloud hub, BizChat and the Kingdee cloud platform,” he said. The cloud management business is expected to make up half of the company’s revenue by 2018.

The company returned to black in the first half of last year with a profit of 8.6 million yuan (US$1.38 million), compared with a 210 million yuan loss for the same period a year earlier, according to a stock exchange filing. It ended 2013 with a full-year profit of 126 million yuan.

Shenzhen’s software business revenue grew by more than a fifth to 331.4 billion yuan in 2013, putting the city second on the mainland in the sector, the Shenzhen Evening News reported Feb. 25, citing the city’s Economy, Trade and Information Commission.

“We expect the software business to grow by 20 percent each year in the coming five years as hi-tech firms concentrate in Shenzhen. The city could replace Beijing as the leader in China’s software business,” Xu said.

As business on the mainland grows, Xu also hopes to enlarge its offshore market share. “We plan to see the overseas contribution take up 10 to 15 percent of our total revenue in three to five years, compared with the current 5 to 10 percent. The growth is slow and stable as we want to focus on the domestic market first,” he said.

Kingdee’s footprint covers Hong Kong, Singapore, Taiwan, Malaysia and Vietnam. The firm is the largest ERP service provider in Hong Kong.

– Contact the reporter at [email protected]

SK/CG

Ayishah Ma is a financial reporter on Greater China issues.

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