Published: 19:44, February 29, 2024 | Updated: 19:44, February 29, 2024
Seasoned CFO shares insights on China's corporate service market
By Tian Haodong and Deng Zhipeng

Shen Bei, chief financial officer of Manycore Tech Inc, shares in insights on China's enterprise service market during a recent session of the CFO Salon. (PHOTO PROVIDED TO CHINA DAILY)

An experienced investment banker emphasized the immense potential in China's enterprise service market and the crucial role of cloud technology in the industry's evolution during a recent session of the CFO Salon. 

The 13th session of the CFO Salon, hosted at Tims Coffee (Golden Tree Street), featured Shen Bei, chief financial officer of Manycore Tech Inc. With over 10 years of experience in investment banking, Shen has worked with prominent institutions such as JPMorgan Chase and Goldman Sachs. Leveraging his extensive background, he shared unique insights into the software industry.

Shen highlighted the rapid development of China's enterprise service market in recent years and reflected on his experiences since joining Manycore

Shen highlighted the rapid development of China's enterprise service market in recent years and reflected on his experiences since joining Manycore.

Shen pointed out two primary reasons for the growth of China's enterprise service market. Firstly, the relatively weak state of the Chinese software market post-reform and opening up, gradually changing with the rise of cloud software. Secondly, the conservative approach of Chinese enterprises towards software procurement, preferring to enhance efficiency through increased labor costs rather than investing in software automation and process improvement.

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Shen provided insights into Manycore's influence on the Chinese home design and renovation industry, noting that the company's cloud-based design software is extensively utilized by decoration companies, building material enterprises, tile and flooring manufacturers, and furniture companies. He highlighted China's achievement in product customization and automated manufacturing within the furniture sector, with 16 out of the top 20 listed Chinese furniture companies being clients of Manycore.

On the product front, Shen emphasized the advantages of cloud-based design software, particularly in enhancing design efficiency, intelligent operations, and collaboration. He described how the software enables designers to easily share design schemes, allowing clients to participate in real-time and significantly improving collaborative efficiency.

Highlighting the limitations of traditional software, Shen pointed out their dependence on powerful hardware, while Manycore's software performs most calculations on the cloud, requiring no special hardware. This allows the software to be globally accessible, requiring only an internet connection for users.

Shen Bei, chief financial officer of Manycore Tech Inc, shares in insights on China's enterprise service market during a recent session of the CFO Salon. (PHOTO PROVIDED TO CHINA DAILY)

Shen also shared Manycore's plans for international market expansion, emphasizing the company's goal to globally promote its software, catering to overseas clients such as IKEA and Panasonic.

Lastly, Shen discussed his recent involvement in product pricing, considering it a crucial aspect for Chinese software companies. He stressed the importance of pricing flexibility and effective negotiation, revealing potential opportunities in this area.

Upon joining Manycore, Shen identified the absence of clear pricing policy and effective discount control in the company. Leading the team, he adjusted the pricing strategy, significantly boosting revenue.

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In China, many software enterprises overlook pricing strategies. Upon Shen's arrival at Manycore, he discovered a lack of clear pricing standards, granting extensive negotiating power to the business team. Some demonstrated exceptional negotiating skills, selling software at premium price, while others offered substantial discounts, impacting company profits. Consequently, Shen led the team in adjusting pricing strategies, significantly boosting revenue while maintaining cost efficiency.

On the enterprise side, Shen formulated a standardized pricing scheme. Through research, Shen discovered that the company's revenue primarily stemmed from account sales rather than specific functionalities. Therefore, they categorized functionalities and packaged them into different types of accounts, simplifying the pricing logic and making it easier for customers to understand.

Simultaneously, Shen streamlined discounts to be more straightforward and transparent, with larger discounts offered for larger account purchases. As a result, business efficiency improved, customer perception improved, and the unit price of accounts saw a significant increase.

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On the consumer side, users purchasing software services online enjoy a significantly higher degree of pricing flexibility compared to the enterprise side. On one hand, companies can employ artificial intelligence to achieve personalized pricing for each user. For instance, if a user lingers on the payment page for a certain period, the system may offer them a limited-time discount coupon to encourage purchase and boost conversion rates. On the other hand, companies utilize different pricing structures such as monthly, semi-annual, and annual subscriptions to mitigate the impact of seasonal fluctuations in software demand, thereby swiftly increasing annual revenue. When Manycore introduced annual subscription in June 2022, the revenue doubled without any increase in marketing costs.