Tops in the HCM SaaS+ industry, CDP Group strengthen long-term growth

As a new round of technological revolution and industrial transformation evolves, the transformation of human capital management (HCM) has become an inevitability. In terms of overall revenues, the market size of HCM industry in China is expected to conti

CDP Group tops in the promising HCM SaaS+ industry

HCM market can be divided into HCM SaaS+ and non-SaaS-based HCM by deployment. Internally, HCM SaaS+ is featured by high automation and integration capability, strong analytical capability, easy access, strong system scalability and adaptability and payment flexibility. These aspects make the track not only greatly save installation and maintenance costs, but also have a significant lead as compared with the latter.

According to the CIC report, the proportion of the market share of HCM SaaS+ in the total HCM market in China increased from 15.9% in 2016 to 21.6% in 2020 and is expected to further increase to 35.6% in 2025. The market size increased from RMB48.9 billion in 2016 to RMB122.3 billion in 2020 and is expected to reach RMB461.1 billion by 2025.

On this growing track, CDP Group takes the lead in digital innovations of the SaaS+ model and provides Chinese and overseas customers with HCM SaaS+ services covering the entire career lifecycle through an integrated cloudbased SaaS platform. According to CIC, in 2020, CDP Group ranked in the first place among the HCM SaaS+ platforms in China in terms of revenue from HCM SaaS+ services, with revenue from the integrated SaaS+ business of approximately RMB205.9 million and that from the workforce management of approximately RMB811.9 million in 2020; and also the first HCM SaaS+ service provider in China that offers multinational services to customers in terms of revenue from the provision of HCM SaaS+ services to overseas businesses of Chinese companies.

The unique HCM SaaS+ business model drives the disruptive transformation from HR Tech to Work Tech

Unlike module-based HCM SaaS business model, CDP Group’s industry-leading platform delivers scenario-based offerings covering the entire employment lifecycle. They have a firstmover advantage in China in addressing the disruptive shift from HR Tech to Work Tech manifested by our distinctive employee-centric business model.

The unique business model and the comprehensive scenario-based services of the lifecycle open the possibility of achieving rapid

growth in CDP Group’s revenue. According to the latest prospectus, the total revenue of CDP Group in 2020 was RMB1,017.8 million, representing a year-on-year increase of 24.4% as compared with 2019; the total revenue in the first three quarters of 2021 amounted to RMB930.4 million, representing an increase of 28.3% as compared with the corresponding period of last year. Among them, revenue from the integrated SaaS+ was RMB189.2 million, representing a year-on-year increase of 26.5%; revenue from the workforce management was RMB741.2 million, representing a year-on-year increase of 28.8%. The strong momentum shown in business results highlights its outstanding comprehensive strength and core competitiveness. In order to empower businesses by transforming HCM into a strategic advantage and enhance employee experience for business success through technology, CDP Group is rooted on the EcoSaaS technology and enhances workforce engagement and productivity. By supporting a rich variety of work-and-life scenarios and promotes the well-being of employees at work and beyond, they bring together communication, learning, performance, compensation, and other work management features to maximize employees’ professional potential. On the other hand, the platform of CDP Group is highly inter-operable with major global HCM systems, enabling it to integrate, supplement, enhance or replace the systems adopted by its existing and prospective customers in a cost-effective and time-efficient manner. The employee-centric WorkLife application of CDP Group provides intuitive, unified, and easily accessible interface delivers optimal digital experience. Also bring out a future work-and-life style, offering one-stop access to a full spectrum of HCM services including payroll, benefits, talent acquisition, talent development and workforce management, to greatly enhance employee experience and productivity. Therefore, CDP Group has played a significant role in addressing the disruptive shift from HR Tech to Work Tech when promoting enterprise human capital management. The unique scenario-based business model allows it to build solid entry barriers in the industry, establishing a strong first-mover advantage, and laying a solid foundation for its employeecentric transformation.

Extensive customer coverage and high retention rate huge room for growth in the future

CDP Group has been widely recognized due to the unique business model and strong R&D strength. According to the latest prospectus, as of December 31, 2021, they have provided global HCM services to over 110 customers in more than 50 countries and regions, and nine of its global HCM Customers were among the top 20 of the top 50 Chinese Global Brand Builders in 2020. As a result, CDP Group are well positioned to offer the most comprehensive HCM SaaS+ services to customers in China and overseas through their cloud-based integrated SaaS platform.

In terms of customer retention, in 2020 and 9M2021, CDP Group achieved a KA Customer retention rate of 97.9%, 95.1% and 97.2% for its integrated SaaS+ business, respectively, and an average rate of over 85% for our workforce management business over the relevant periods, substantially outperforming the industry average for the same periods. In 2019, 2020 and 9M2021, CDP Group achieved a KA Customer revenue retention rate of 107.0%, 119.1% and 119.6%, respectively, and such KA Customers collectively contributed to approximately 96% of our revenue for all relevant periods. The average LTV/CAC ratio of CDP Group’s integrated SaaS+ business and workforce management business were 7x and 14x, respectively, above the industry average in China’s HCM SaaS+ market, which was below 2x and below 5x, respectively, according to CIC. The high-quality customer base and global strategic layout have undoubtedly injected great imagination into the medium and long-term performance growth of CDP Group.

As a China-based global HCM SaaS+ service leader, CDP Group possesses unparalleled technologies and R&D capabilities within the industry, extensive customer coverage, and excellent KA Customer retention rate and revenue retention rate, providing a sufficiently thick safety buffer for the group in the long term. Through products and services polishing with SaaS+, CDP Group helps enterprises to improve operational efficiency to a large extent and truly solve the pain points of customers. The comprehensive and leading services and diversified high-quality customer base will promote the long-term continuous growth of its business for sure.