Author: Yaochong Chen
The year 2020 is a special time, as COVID 19 has brought pain to people and downturn to economies. As Ralph mentioned in his piece ‘The biggest difference between Covid-19 and 2008 from a DAM perspective is that most prospective clients have already implemented a DAM solution’. While under the economic downturn caused by COVID 19, ‘Expenditure will have to become a lot more focused, however.'(Windsor. 2020). Many customers are thinking about a much more cost-effective option when selecting vendors or replacing their old solutions. This may impact many DAM companies.
However, DAM’s 2020 situation is very different in China, as the DAM market is a bit like EU&US’s 2008 DAM market. It is still developing, and even at much early stage. We didn’t see any DAM solutions in 2018, while in 2019, some content management services mushroomed. However, they mainly provided some content editing functions alone, while selling some creative marketing materials. Companies were suffering from finding documents and setting content’s accessibility when using products like Baidu Netdisk (Baidu’s Cloud storage solution like Google Drive). In 2020, the first local DAM company, TEZIGN, offers content management functions throughout digital asset lifecycle and is even equipped with AI technology to enhance its searchability. This is exciting news but not surprising. Changes have taken place since 2018, while COVID 19 pushes the market to a turning point.
So let’s firstly take a look at what are the COVID 19 effects to DAM in China
- Stronger Digital Adoption Awareness
Without any doubt, the amount of digital assets is large. Nearly all contents are digitized or born-digital in China. The on-trend short-video marketing and continuous marketing campaigns online across e-commerce field these years were not really stopped and are even more popular when people could only stay at home during early 2020. At the end of the day, we need solutions to manage them better. As many companies require employees to work from home, people need to communicate and collaborate remotely online. Office software is more adopted: Byte Dance’s Lark and Alibaba’s DingTalk stood out. Although for small-mid size companies, digital adoption is still weak; large companies have been more and more aware of the necessity of Digital Transformation and use technologies to improve working efficiency. Therefore, the overall digital adoption awareness at the workplace/ during work is remarkably improved. It’s a great opportunity to nurture companies’ awareness of managing their digital assets with a DAM software.
- ‘New Infrastructure’ Policies support toB services
Chinese Government is stimulating the dominant economy by a set of policies. ‘New Infrastructure’, is now one of the key investment areas for stabilizing growth. This includes five main areas: ‘5G, the industrial internet, AI, IoT and cloud computing’. To break the ‘5G’ plan down, design & infrastructure, equipment (wireless and wired), IT services and applications will be heavily invested. As DAM as a SaaS software is under this catalogue, it’s a great opportunity for it to grow strong.
- Welfare Policies & Marketing Campaigns
Apart from this, the Chinese government has announced a set of public welfare policies to increase cash flow, and they are cutting taxes for companies to support businesses go through the 2020 crisis. Consumption drives economic growth. Although many people do spend less than they used to, businesses have never stopped marketing campaigns to stimulate purchasing. Till now, we have seen lots of campaigns on T-mall & Taobao in the past months, which means increasing digital marketing materials are generated from time to time.
- The Capital had been vastly invested in Business Service Companies, especially IT service.
This effect will be vastly driven by New infrastructure’ Policy in the coming years, but it has already been a rend before ‘New Infrastructure’ announced. 36Kr, a profound Financial Press in China reported that lots of Venture Capitals had turned their focus from toC businesses to toB businesses. Profound toC IT service providers like Alibaba, Tencent, and Baidu all announced their new actions into toB area. Alibaba’s Dingding is just an example (a Co-work software like Slack). Sequoia Group believes firmly that in the long term, all their toB investments will be paid back excessively. Data from App “Chuangtoupai” also reflects that toB businesses are always one of the top three frequent choices for almost every investment company.
In the long term, the change of population, market maturity, and developing technology will push to B IT services develop even further.
The Demographic Bonus Period is coming to an end in the coming 10 years. ‘Demographic and Labour Green Book’s Report No.19, predicted that by 2027, the Chinese population will experience negative growth. The society will rely more on technologies like SaaS & AI to ease short of labour and to ensure productivity.
- Market Maturity
DAM’s emergence relies on the maturity of a market, although we need to think about the digital adoption awareness and habit when talking about this. DAM will not be a priority if companies in the market are struggling to develop or to sell their main product or service. When they invest their budgets and focus on driving revenues and expand their main business, optimizing workflow by purchasing extra software would be a burden. This is especially true when the digital adoption level is relatively low at the workplace. A product manager I talked to pointed out that a customer doesn’t only spend money when using your DAM, they also spend their time and labour to implement it. With that being said, DAM would likely to be under consideration, only when they are mature enough to invest in it. I would like to say, it’s not a coincidence for TEZIGN to locate in Shanghai. Shanghai’s market is better developed than many others in China, and its prosperity makes society creative and open. It has much more high-quality art & cultural exhibitions compared to Shenzhen and Guangzhou. The market has the awareness to embrace new things, and are likely to pay for something like DAM.
In the last decade, toC service companies have been tremendously developed in China. This trend has made many ambitious Companies achieve their dreams, including Alibaba, Tencent, Baidu, and more. When the market is becoming saturation, and companies have fewer things to innovate and areas to expand, they will eventually turn their next goal to toB market.
- Technology Development
The last reason is known by everyone but rather true. Technology will keep developing, and the age of DAM and other SaaS is just about time.
COVID 19 has brought disappointment to the whole world, including a DAM advocator like me. Tragedies and uncertainties are sometimes not the things we can control, but staying positive is especially crucial when the situation is extremely bad. This is just a new turning point.
Windsor, Ralph., 2020. The Implications of Covid-19 For The DAM Industry – Part 1, DAMNEWS. From https://digitalassetmanagementnews.org/features/the-implications-of-covid-19-for-the-dam-industry-part-1/
Zhiyan Chen etc., 2020. 中国VC大迁移：得toB 者得天下. 36 Kr. From: https://mp.weixin.qq.com/s/dNHLIbqgZEFJLUpSerO3-Q
Xinjing News, 2019. 社科院：中国人口负增长或2027年出现. Sina Financial News. From: http://finance.sina.com.cn/roll/2019-01-04/doc-ihqhqcis2946485.shtml