Where there is business, there is a transaction, and where there is a transaction, signature is inseparable.
Under the wave of "digitization", electronic signatures are no strangers. In recent years, with favorable policies and the promotion of the epidemic, this market has ushered in rapid development. According to the "2021 China Electronic Signature Industry Research Report" (hereinafter referred to as the "Report") released by 36 Krypton Research Institute, the scale of my country's electronic signature industry has exploded from 850 million in 2016 to 10.82 billion in 2020, with an average annual compound The growth rate is as high as 66.3%. In 2020 alone, the number of electronic signatures exceeded 50 billion, a year-on-year increase of 317.51%. This year, this track once again set off a capital boom, setting a record for a single financing amount in the industry.
Despite this, the industry currently has less than 1% market penetration in the country. The "Report" also pointed out that although giants such as Tencent have entered the Chinese electronic signature market, there has not yet been a winner-take-all situation, and the industry is still in its infancy. It is understood that the current electronic signature track is constantly changing and is developing in the direction of ecology, verticalization and networking. So, is the electronic signature track, which has been developed for more than ten years, still a blue ocean market? In the process, how can contestants maintain their competitive advantage?
Recently, a reporter from "Zheshang" magazine visited a number of people in the industry with relevant questions to conduct research and interviews. Feng Baolong, CEO of Aisign Digital Technology, expressed his views and opinions on issues such as market and industry trends. Some of the content is now shared as follows.
"Zheshang": Electronic signature has been developed in China for more than ten years, will it still be a blue ocean in the market?
Feng Baolong: Electronic signature is the "infrastructure" of enterprise digitalization, and it is highly supported by national policies in application scenarios such as government affairs, justice, human resources, and state-owned enterprises. In March of this year, the "14th Five-Year Plan and Outline of Long-term Goals in 2035" was officially released, proposing to promote the application of electronic certificates, electronic signatures, electronic contracts, electronic signatures, etc. Throughout 2021, there will be no less than 50 policy documents on the promotion of electronic signature applications by central ministries and commissions and local government agencies at all levels. These not only enhance the public's awareness of electronic signature technology, but also provide a strong trust endorsement for the legal validity of electronic contracts from the source, and once again stimulate the confidence and enthusiasm of the electronic signature industry.
In addition, the epidemic has catalyzed an explosion in the market demand for electronic signatures. The sudden outbreak of the new crown epidemic in 2020 has made contactless and online office the first choice for enterprises to maintain normal operations, and the social recognition and acceptance of electronic signatures has increased significantly. At the same time, electronic signature is the most direct green and low-carbon alternative to the traditional "paper contract + offline signing". The formulation of China's carbon neutrality and carbon peak goals will further open up the incremental space for the electronic signature market.
I can disclose a statistic, the current market penetration rate of this industry is less than 1%. If you doubt this data, you might as well go and see for yourself first. How many companies have used electronic signatures when signing contracts? At present, awareness is high and market penetration is low. What you see on the Internet is the market share of PR (Public relation, that is, public relations), not the real market share. I can say with certainty that electronic signature is not only a blue ocean market, but also a huge blue ocean market. It will grow exponentially every year in the next ten years, and the market space will exceed 500 billion.
"Zheshang": There is a saying in the industry that because a contract needs to be signed by at least two parties, electronic signatures have a network effect, and some people summarize it as "Metcalfe's Law". If this statement is true, then the market of electronic signature, which has been developed for more than 10 years, has long been occupied by the earliest players, and where is there any blue ocean opportunity for newcomers?
Feng Baolong: Some PRs in the industry have indeed instilled a mainstream view that electronic signatures are easy to form a chain network effect. But in fact, it is difficult to form the Metcalfe effect in the domestic electronic signature market. Everyone should know that electronic signature involves the field of information security. Based on the consideration of information security, leading enterprises will definitely not choose a third-party electronic signature platform, but adopt privatization deployment and build their own contract signing platform. The logic that enterprises drive upstream and downstream small and medium-sized enterprises in the industrial chain to exert the network square effect cannot be effectively established in the field of electronic signatures. Moreover, in the small B market, the degree of interrelationship between different enterprises is actually a weak relationship, and there is no such strong interaction at all. The electronic signature market is more applicable to Zipf's law, that is, the industry will bring a certain increase in customers based on network value, but it is far lower than the increase brought by Metcalfe's law. All companies in the industry that respect Metcalfe's Law must have done well in financing, but may not have done well in the market. Since the penetration rate of the domestic electronic signature market is so low and the external environment has gradually matured, how can newcomers have no chance to enter the market?
"Zheshang": From the perspective of development stage, what stage do you think the current domestic electronic signature is in?
Feng Baolong: The entire industry has gone through the embryonic stage, the cultivation stage, and the current comprehensive digital application stage. The period from 2005 to 2015 was the embryonic period of electronic signature. Netizens were immature, and the market was even more immature. In the extremely immature environment of the embryonic stage, several companies could not be supported. Moreover, what first appeared was not an electronic signature, but an electronic seal. The period from 2015 to 2020 is the cultivation stage, and the market is beginning to emerge. First, the rise of Internet finance has promoted the industry, because mutual financial transactions must realize online signing and data storage, which greatly promotes the development space of electronic signatures; after that The epidemic has opened up the online office mode again, and electronic signatures have been popularized in a large number, and then welcome the market growth space. It is currently in the stage of comprehensive digital application. Under the background of the digital economy era, the trend of industrial digitalization will be strengthened in the future, and the rise of electronic signatures will become an inevitable trend. At this stage, industry awareness is high, but penetration is low, giving the industry and players a huge room for imagination. Like the sun just rising, unstoppable and full of great opportunities.
"Zheshang": In recent years, the electronic signature market has developed rapidly and has quickly become a track with a market capacity of over 100 billion. What do you think are the driving forces behind this?
Feng Baolong: The development of the digital economy industry mentioned above is a major driving force for the industry. In addition, the epidemic situation, dual carbon targets, and other favorable policies are all driving forces for electronic signatures. In particular, we should mention that the Supreme People's Court promulgated the "Provisions of the Supreme People's Court on Several Issues Concerning the Trial of Cases by Internet Courts" issued by the Supreme Court in 2018. As a technical means and form of electronic evidence, electronic signatures have been clearly recognized by the Supreme Court, which has greatly promoted the industry. develop. In addition, with the development and maturity of blockchain, artificial intelligence, 5G and other technologies, the trend of making electronic signatures one of the underlying infrastructure of the entire business is strengthened, and the ever-changing technological development is also driving the development of the industry. Finally, electronic signatures are also a sharp tool for enterprises to reduce costs and increase efficiency, and can bring tangible benefits to enterprises. This is also the internal driving force for the rapid development of the industry. Take a large manufacturing company as an example. For example, a certain brand has hundreds of suppliers, thousands of agents and tens of thousands of stores across the country. It needs to process a large number of purchase orders, sales orders, receipts, signing contracts and employees every month. Labor Contract. The huge workload of contract signing not only increases the workload of procurement, sales and human resources departments, but also affects the rapid development of enterprises. However, the introduction of electronic signatures will greatly improve the efficiency of supply chain procurement contracts, sales contracts, personnel contracting, and management efficiency, effectively reducing business costs.
"Zheshang": Can you predict the future industry structure?
Feng Baolong: The industry market in the future is huge, and it will maintain geometric multiple growth every year, and there will be no problem with continuous growth for 10 years. In the next 3-5 years, there will be at least 5-10 domestic companies that can prosper together and serve the market together. No matter how the industry is changing, I believe that the ultimate winner of this track must be the player who can best solve the most difficult and most concerned pain points of customers, including providing safe, convenient, professional and intelligent product experience, providing a complete The service of the chain of evidence and the pragmatic price. Why is the price specifically mentioned, because I have seen many companies in the industry pass this part of the cost on to customers because their own management costs are too high. In the beginning, in order to expand the market, they gave customers a low price of one loss and one order, and then they continued to increase the price. Some customers’ unit price was even more than ten times compared with the previous one. This kind of cost was passed on due to their own poor management. The business model of the client enterprise determines that it will be eliminated by the market.
Reprinted from the official account of Zheshang Magazine