Geong
International, the Beijing-based software company listed on London's
Aim market, is opening up a second seam in China's business software
market by going after small and medium-sized enterprises (SMEs).
Geong specialises in enterprise content management software, a market that was all the range in the west a few years back as big businesses turned to ECM to better manage the sprawling amount of information held on their websites and intranets. However, several stand-alone ECM vendors have been acquired as the trend today for businesses to get their ECM software within a suite from broad-based vendors like Microsoft and SAP.
While the sun seems to be setting on the stand-alone ECM industry in the west, Geong's rapid rise -- its share price has doubled in just two months -- shows investors believe there is still a lot to play for in China.
Having recently bagged a clutch of contracts with financial institutions automotive giants operating in China, Geong is now turning its sights on smaller businesses, which tend to be a lot more reticent about spending money on IT -- and not just in China.
Today, Geong announced it had signed an alliance agreement with the Shanghai Enterprise Information Promotion Centre for SMEs to promote SmartBox, Geong's SME-focused product, to Shanghai-based businesses.
An anonymous investor and EngagingChina reader, feels SmartBox takes Geong into a different league -- the junior league presumably -- and he recently commented on our site:
As an investor in Geong on AIM I wondered if you had any thoughts about the likely success of SmartBox, their new solution for small and medium-sized businesses? PortalAge has and is doing extremely well, but in theory SmartBox could take Geong into a different league. Do you have any views on this or on Geong's recent contract wins - their customer list is amazing for such a small company?"
To be sure, there are a lot more SMEs in China than banks and multinationals -- the target market for its high-end PortalAge product. According to the Shanghai EIPC, there are almost 340,000 SMEs just in the Shanghai region.
But the SME market is a notoriously difficult one for software companies to reach, particularly in a country like China where a large part of a software vendor's time and resources goes on simply educating the market about the potential advantages.
Nevertheless, focusing resources on one region and linking up with the Shanghai EIPC seem smart moves. Shanghai EIPC and Geong intend to target SMEs by holding joint seminars to demonstrate the benefits of SmartBox. Following the demonstrations, the SMEs will be entitled to a 30 day free trial as well as a promotional price on the software.
Earlier this month, Geong signed contracts worth $260,000 with Haitong Securities and China Asset Management for its high-end PortalAge software. In January, it signed a clutch of contracts with China Construction Bank, FAW Volkswagen and Shanghai General Motors. Those deals, again for Geong's PortalAge software, have a combined value of almost $1m.
EngagingChina wrote about Geong in this earlier story.
