►Shopex provides well-rounded e-commerce operation solutions for merchants and large retail companies.
►The next step for Shopex will be the further refinement of its clients’ industries with more detailed solutions.

The global pandemic has pushed industries to transform into Internet and digital-based interests, which provides expanding opportunities for SaaS service companies. 

In the US market, cooperation between Facebook and Shopify grabbed the public’s attention, after which users could easily integrate Shopify stores on their FB or Instagram and build e-commerce stores. Shopify, as a representative of the global e-commerce SaaS industry, has successfully transformed itself from a tool into an ecosystem. Shopify even provides solutions on business expansion to overseas markets. 

Software systems, payments and logistics are the infrastructure elements for e-commerce. Shopex, a Chinese SaaS company founded in 2002, is constructing these infrastructure elements for merchants by providing services and solutions, including online transactions, supply chain management and finance services, among others.

Shopex provides business to customer (B2C) software systems for merchants running their businesses on online platforms, either independently or affiliated to Taobao. With the development of e-commerce, the market is expanding and diversifying, which creates more demand for online store construction. 

The technologies and services of Shopex have been wildly applied in PC terminals, mobile and offline stores, with the average daily figures hitting 3.8 million orders and CNY 570 million GMV in e-commerce. The company has covered 1.6 million e-commerce merchants in 23 industries.

In 2008, the market share of Shopex exceeded 70%, which was followed by  the acquisition of ECShop, which owned the second largest share before the transaction.

In 2009, e-commerce platforms continued upgrading, and merchants started multi-channel operations, with more large brands joining the market. The competition became even more fierce. Merchants that launched on Taobao during this time enjoyed the dividends of market growth. Dangdang also turned cash positive for the first time and TMall started the Single-Day Shopping Festival. To meet the various customer demand, Shopex first launched ETS（E-commerce Total Solution）with ECStore, ERP and CRM systems to support e-commerce companies in the whole lifecycle of e-commerce. 

The growth of transaction volume in the e-commerce industry reached its highest point of 33% in 2011, then moved lower. In 2012, commercial banks started to involve in B2B business, pushing forward the transformation from offline payment to online. At the same time, B2C started to merge with B2B, which integrates with the channels and end-customers on the industrial chain. This year, Shopex started providing solutions in B2C, B2B, B2B2C.

From 2015 to 2018, The company launched several new products, including mini-malls, mini programs, online video platforms and customer service management. In 2018, Shopex built a solution system focused on marketing, transactions  and supply chains. 

In 2019, The data integration system launched. Following the successful experiences of head-merchants on multi-channel operations, Shopex developed a standardized and digitized system, to benefit all the merchants on the platform in inheriting the business model.  

After decades of experience, Shopex has built a professional team in researching autonomous kernel technology to provide one-stop solutions for valued clients. Shopex has continued to support huge demand spikes on the ‘Singles-Day Shopping Festival’ for eight years, with the number of brand customers increasing 67% on a year-over-year basis and the volume of orders running up 54.5% in 2019. The company’s GMV surged 62% – far beyond the GMV growth of Tmall of 26%. 

What does Shopex Do?

Hierarchical Client Management

Shopex’s system can be divided into two main streams: Onex,  for mid-sized to large companies, and ECShop for SMBs.

Shopex has developed several products along the e-commerce industry chain, from CRM to marketing and especially cloud services – the ensemble benefits all the client companies in data integration and cash management. 

For smaller companies, Shopex offers software to help the merchants simplify the entire e-commerce retail process. 

For larger enterprises, Shopex provides customized services, including full-channel IT system support, building channels and following through on customer interaction and after-sale management. Beyond this, Shopex provides AMS (Application Management Services）and consulting services for large traditional companies, ECP（Enterprise Commerce Platforms）and multi-channel solutions for mid to high-end enterprises. 

Horizontal Service Solutions

From a business life cycle perspective, Shopex is helping brands to build a new retail operation systems centered on membership and clients. New Retail is a term that roughly indicates a combination of the best in physical and online retail, or a way of business restructuring that includes rebuilding the production process, the relationship between business and consumers and the shopping experience. 

In developing client relationships, Shopex combines online promotion by utilizing a fan economy  and offline membership recruiting, with the intention of increasing clients’ onboarding capacity to create a private traffic pool for brands. With the customized analysis on companies, Shopex offers online content construction and promotion solutions to increase membership adhesiveness and therefore generate a self-propagating reaction effect between fans and customers to push up sales. With the help of online traffic management, Shopex serves companies in offline store construction and consumption upgrades, to provide a comprehensive traffic expansion solution. 

For managing client relationships, Shopex focuses on membership center construction and online selling service systems. Shopex can also help in building fully functioning online malls based on the companies in different industries with customized solutions, including promotion page construction, system maintenance, linkage with social media, interactions between online and offline stores, etc. 

As for maintaining the client relationships, Shopex provides long-term brand construction to achieve omnichannel selling transformation. With the utilization of QR codes and smart customer analyzing systems, companies can digitize their customer traffic and demands in order to offer better services afterwards. Moreover, Shopex serves in customized incentive systems building that targets an inner salesperson, to improve companies’ management efficiency and enhance sales performance[sl9] .

Where is Shopex headed?

In the Chinese market, several leading companies in the e-commerce SaaS market have emerged. Weimob, founded in 2013 as a strategic partnership of the Tencent Advertisement platform and intelligent service provider, has strong competitiveness in the precision marketing business. Also, the company turned its first profit in 2019. 

Youzan, founded in 2012, is another large competitor of Shopex – it profits from SaaS and transaction fees, also has some market share. Though the participants in the Chinese e-commerce SaaS market have their own different focuses, they are similar in business model generally, which increases the competition.  

When compared with overseas markets, the Chinese e-commerce market differs. The monetization rate (revenue/GMV) in the Chinese e-commerce market, a ratio that is positively associated with e-commerce companies’ profitability, is much lower than that in overseas’ markets, with the highest one being Alibaba with 4.3%, compared to the 13%-15% from Amazon. This has reduced the advantages for them in attracting customers with low costs, and therefore suppresses the development of e-commerce SaaS companies to some extent. Apparently, compared with the western market, participants in Chinese e-commerce SaaS market are facing severe challenges. 

On the one hand, a number of e-commerce transactions with new channels are coming out. More and more offline stores, like Tencent and Pinduoduo, are stepping into an omnichannel integration process, building mini program channels online and trying to improve the social e-commerce model. These creations are breaking the traditional e-commerce SaaS market structure with a more complicated ecosystem. 

On the other hand, with the increasing needs of refined operation and digital management from merchants, the e-commerce SaaS companies have to improve iterative abilities to maintain competitiveness. Moreover, Chinese e-commerce SaaS companies are relying on the traditional e-commerce ecosystem, which is mainly supported by Alibaba and Pingduoduo. The business model of Shopify is hard to follow in the domestic market, which requires the companies to create solutions more suitable for Chinese merchants. 

Although Shopex entered the market first, Youzan and Weimob have surpassed the company in many ways. Shopex, which is both an old and young company in this industry, still needs more fuel. The experience and the good understanding of the industry is about its differentiation. With almost two decades’ experience, the company persists in iterating its products and extending its business maps. 

It is not easy for SaaS companies to earn profit in the short run. Thus the long-term development space will be the center of the market's attention. This health of this depends on the product mix’s expansion ability and the construction capacity of the service ecosystem. The next step for Shopex will be the further refinement of its clients’ industries around more detailed solutions, with the focus on larger e-commerce companies. For SaaS companies, the innovation and creation breakthroughs will emerge from the market, with precise recognition of customer experience.