CRM Market Navigates a New Landscape in China’s Restaurant Industry
Among one of the categories of enterprise application in China, the booming CRM (customer relationship management) market is the growing beginning of China’s end-user catering industry. CRM software has become the preferred software for restaurants to analyze customer consumption behaviors such as preference, frequency of consumption, most popular dishes and time interval to optimize their business performance.
Most restaurant CRM software is equipped with features to complete an in-depth customer value assessment model to summarize and reflect characteristics including customer retention rate, occupancy, economic demographics and other indicators. As China has a popular food delivery culture, the restaurant industry needs to meet diverse customer needs to implement online ordering functions and increase business efficiency.
Chinese restaurants have started applying CRM software to help with self-service order submission, menu information, and providing a numeric code for each order to track inventory and sales records . The CRM market in the restaurant industry in China has therefore flourished in response to its high efficiency in resolving multiple queries in a short period of time.
Massive Market Pairs with Strong Growth Indicator
A guarantee of the CRM market is the Software as a Service (SaaS) market. Both marketplaces function as extensions of the sales function in managing customer service and sales marketing. Relevant services can be applied to a wide variety of business scenarios such as marketing, online customer service and e-commerce with prospects for further development. Various CRM platforms serve as a medium for coordinating sales, marketing, and service interactions between businesses and their customers.
Since 2007, China officially entered the CRM software market with Shenzhen-based industry pioneer Kingdee International Software Group Limited. Currently, some of the leading vendors in the Chinese CRM market include Salesforce, Veeva System, Kingdee, Waiqin 365, and Tencent Qidian. These CRM service providers inevitably lead the country to further progress in the digital ecosystem.
According to International Data Corporation (IDC), in the first half of 2020, China’s SaaS market reached $1.36 billion, growing 27% year-on-year. Riding the trend of economic recovery after the pandemic, the market is expected to witness further growth in the next couple of years. Among the various divisions of the SaaS market, the Chinese CRM market has been a well-hewn sector with the most mature development, occupying up to 59% of the SaaS market share. Along with the standardization of products, CRM software has responded to the precise needs of companies to transform into digitalization in different sectors.
From 2016 to 2020, the Chinese CRM market has grown at a CAGR of over 17% on the back of the rapid development of software and cloud-based platforms in recent years. According to eastern silverChina’s CRM software industry grew from CNY 1.98 billion in 2014 to CNY 3.02 billion in 2018, with a CAGR of 11%.
In China, state regulations play a central role in determining the future of industries. In the CRM market, the Chinese government has issued several positive regulatory policies to bring CRM software into a new consumption model.
For example, in September 2020, the Chinese government released advice on expanding investment in strategic emerging industries and cultivating new and strengthened growth points and poles. This announcement aims for a transition of businesses offline by promoting e-commerce to overcome the adverse effects of the pandemic. These tips help cloud-based businesses scale their offline expansion and accelerate digital transformation in traditional offline industries.
It is also associated with social marketing and encourages companies to implement new models such as online shopping, collaborative manufacturing demonstration factories and the establishment of high-level industrial Internet platforms. In the restaurant and food sectors, the guidance promotes a new supply chain combining e-commerce and food delivery as a new service model. For the future outlook, the growth potential of the CRM market is estimated to exceed the ceiling and will peak at 6.58 billion yuan by 2023.