Why China still lags on marketing SaaS spending

“One of the biggest benefits of using SaaS-based marketing tools is that they can reveal areas of improvement in marketing planning,” says Alex Duncan, co-founder of Shanghai-based, Kawo. "But many brand teams are too junior and inexperienced in their marketing roles and are therefore not keen on transparency that may potentially expose their mistakes.”

According to a recent McKinsey study, China is still 10 years behind other markets when it comes to marketing SaaS spending. “In other markets, one dollar out of two dollars in marketing is spent on technology, but in China, it’s one dollar out of every 20”, says Duncan.

China’s unique digital ecosystem still presents roadblocks. “The technical challenges in the market make it virtually impossible to compete here for many of the big global SaaS players, and they’ll have to create separate solutions which could be prohibitively expensive," says Duncan.

But he sees huge opportunities for the China market and the market will never be dominated by a single player because the entire digital ecosystem is so fragmented. In addition, SaaS tools become more attractive as staff costs increase but productivity continues to be the same.

Duncan’s Kawo tools automate social media content planning on Chinese platforms, including WeChat, Weibo and Douyin. He continues to be bullish on WeChat as a brand building tool, but less as an e-commerce one. “WeChat is far more about brand building than conversion, and despite mini-programmes, it remains still far away from purchases," he says. 

Alex Duncan, co-founder, Kawo

Alex Duncan's full interview is available on the Shanghai Zhan podcast, a "raw, lively, and regular debate about China tech, advertising, creativity and the intersection of it all", hosted by Ali Kazmi and Bryce Whitwam.

The podcast is now available now on Apple Podcasts, Spotify, Google, Stitcher, Amazon Music, Xiao Yu Zho and via RSS.