Specialist
Software engineer at Digital China Group Co Ltd
Agenda
- Major domestic and international players in China, entry of players by type – business focuses, product technology competencies, target client groups, market share, competitive advantages and disadvantages
- UiPath’s (NYSE: PATH) business strategy in China, revenue growth trends, target client groups, distributor cooperation models, project economics, product competitive advantages and risks
- Laiye and Intelligence-Indeed – domestic players’ revenue scale, business models, direct sales and distribution systems, distributor cooperation models and competitive strategies
- Domestic players’ client acquisition channels and strategies, plus clients’ supplier selection criteria
Questions
1.
First of all, let us take a look at the main application scenarios and target clients of RPA (robotic process automation). What is the penetration rate of RPA in the core application scenarios of major industries?
2.
According to industry reports, the scale of China’s RPA market reached RMB 1bn in 2019. What about its scale in 2020? How would you measure it? How fast has the industry grown in the last three years?
3.
That is pretty fast growth actually. Can you predict the future potential and scale of the market? What new momentum and trends do you see in 2021 and beyond to encourage more companies to use RPA? What factors will increase the penetration rate of RPA?
4.
You mentioned that the penetration rate of RPA in banking and financial sectors is only 10-20%, even many people think that the application of RPA in these markets are the most mature. Do you see a big growth potential in the financial market?
5.
You can find many RPA service providers in the market now, including some specialised RPA companies, such as the overseas UiPath and Blue Prism, as well as the domestic I-Search, Cyclone, Laiye, Kingsware, Data Grand and Encoo. Also, SAP and Oracle, as well as domestic companies such as Yonyou and Kingdee, are involved in RPA business too. Huawei and Alibaba’s cloud computing subsidiary are also in this market now. Can you analyse the business types, competitive landscape and competitive echelons of domestic and foreign players in China’s market? What is their market share?
6.
According to a former specialist from Encoo, UiPath might have a share of 30-40% in China in 2020, followed by Blue Prism, and then Kingsware’s 8%, I-Search’s 5%, Laiye’s 5% and Data Grand’s 3%. The share of others might be smaller than 1%. He also believed that the total market scale was about RMB 1.8bn-2bn, and UiPath might have RMB 500m-600m. There might be big differences between the other players though. It seems that the data is very different from what you just mentioned. Can you comment on such data?
7.
The share of new business has been small. Is that because players are focusing on different types of clients? Are foreign players getting more of such orders? Can you comment on that?
8.
As you said, UiPath’s product technology capability consists of five parts compared with other companies’ three major parts. How are the conventional three major parts benchmarked with UiPath’s five parts? What parts do domestic players lack?
9.
Am I right to say that domestic companies have the technical capacity of middle-end development, management and execution, but lack the front-end and back-end? Can you compare domestic companies’ advantages and disadvantages in the three parts of product technology capabilities, plus AI technology?
10.
What are the similarities and differences of Laiye, Encoo, Cyclone and I-Search in target clients acquisition and sales strategies? How do you compare them? What players have better development potential?
11.
As you said about RPA sales, some companies are inclined to cooperate with strong partners in distribution, while others still stick to the direct-sales model. What are the proportions of the distribution model and direct-sales model? Why do companies take different models? Are there any special industries that are only accessible to distributors?
12.
What kinds of distributors do UiPath and Laiye mainly cooperate with? What are their specific cooperation models and distributors’ major work? What support will the headquarters provide to distributors? In a typical model, how do the distributors turn profits?
13.
From client acquiring, contract signing, business deployment to follow-up maintenance, what is the specific work for a distributor? How much will that distributor earn? How will it share the revenues with the headquarters?
14.
For distributors that are only responsible for client maintenance, will RPA players such as Laiye build a team for project implementation?
15.
What is Laiye’s revenue from its major clients in the first year? What is the ARPC of the Laiye headquarters and its distributors? What about the project period from deployment completion to putting into use?
16.
What about the payback period of Laiye’s major clients?
17.
Are there any clients that prefer to purchase source codes instead of licences and product licensing?
18.
What are clients’ selection criteria for suppliers in different regions and industries? Which capabilities do clients focus on? What strategies does Laiye take to acquire clients and win orders and what about its performance in this respect?
19.
What about Laiye’s performance in winning orders if it competes with other players for the same client? Which players have a strong strength in winning orders? What about their rankings?
20.
What about the revenue scale and revenue growth trends of UiPath and Laiye in 2019 and 2020? What about the contribution proportion of direct sales and distribution systems to their revenue?
