Good News on Listing | Frost & Sullivan Assists Dian Duoshou Digital Co., Ltd. in Successful Listing on the Hong Kong Stock Exchange (2586.HK)

MultiPoint Digital Intelligence Co., Ltd. (hereinafter referred to as 'MultiPoint') successfully went public on December 6, 2024. The company plans to issue 2,577,400 H shares, of which 90% will be international offerings and 10% will be public offerings. The maximum issue price per share is HK$30.21, raising a net amount of approximately HK$779 million.

During the process of listing in Hong Kong, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the issuer's competitive advantages, assisting the issuer, investment banks, and other intermediaries in completing the writing of relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business, and other important chapters), helping the issuer communicate with the Hong Kong Stock Exchange and investors, assisting investors in quickly understanding the market ecosystem and competitive landscape, and assisting the issuer in completing feedback on various industry-related issues from the Hong Kong Stock Exchange.

• The company is the largest retail digital solutions provider in China with a first-mover advantage;

   

• The company is a leading provider of omnichannel retail digital solutions in China with past successful practices;

   

• The company possesses a high-quality retailer customer portfolio;

   

• The company continues to refine its retail technology;

   

• The company has launched its proprietary and trusted SaaS products in overseas markets;

   

• The company has a mature management team, rich industry experience, high operational efficiency, and strong support from shareholders.

According to a Frost & Sullivan report, ranked by total merchandise transaction volume for 2023, the company:

• Asia's largest retail cloud solution provider;

   

• It is the largest retail cloud solution provider in China.

According to the Frost & Sullivan report, ranked by revenue for 2023, the company:

• Asia's third-largest retail digital solutions provider;

   

• It is the largest retail digital solutions provider in China.

Retail cloud solutions refer to cloud-based solutions that help retailers and brand owners in the local retail industry achieve digital transformation during their daily operations. These solutions address pain points related to customer retention, operational efficiency, decision response speed, advertising efficiency, and data silos, providing value to all participants in the local retail industry. Retail cloud solutions include retail SaaS, marketing and advertising value-added services, and instant e-commerce services. As a core service component of retail cloud solutions, retail SaaS assists local retail industry customers in developing configurable functional modules that meet their business needs and achieve digital transformation.

Data source: Analysis by Frost & Sullivan

The retail cloud solution market has maintained sustainable and strong growth in the past and is expected to continue in the near future. Favorable policies, complete cloud infrastructure, and growing digital demand will become key industry growth catalysts. The market size calculated based on total merchandise transactions refers to the total volume of transactions facilitated by local retail cloud solution service providers in the local retail industry. In terms of total merchandise transactions, the market size of the retail cloud solution industry in Asia increased from RMB 383.4 billion in 2018 to RMB 1.439 trillion in 2023, with a compound annual growth rate of 30.3%. It is expected that during the period from 2024 to 2028, the market size will grow at a compound annual growth rate of 22.4%, reaching RMB 3.9204 trillion in 2028. In China, the market size of the retail cloud solution industry increased from RMB 186.5 billion in 2018 to RMB 856.7 billion in 2023, with a compound annual growth rate of 35.7%. It is expected that during the period from 2024 to 2028, the market size will grow at a compound annual growth rate of 26.9%, reaching RMB 2.8001 trillion in 2028.

Supportive policiesAsian countries, especially China, have implemented significant regulations and policies to greatly promote the development of the internet and data intelligence industries. China is the largest retail cloud solution market in Asia, and measures such as the '14th Five-Year Plan for National Economic and Social Development of China and the Outline of Long-Range Objectives Through the Year 2035' have enhanced China's competitive landscape. Such strategic plans emphasize the necessity of embracing the digital age, leveraging the potential of big data, strengthening cyberspace capabilities, and accelerating the creation of digital economy, social, and governance frameworks.

A complete cloud infrastructure serves as the foundationThe favorable policies of the government towards cloud computing technology have driven digital transformation and addressed the complex management needs of enterprises. This has catalyzed a surge in cloud technology demand, leading cloud companies to significantly expand services to meet the needs of Chinese consumers and enterprises. Pioneers have established strong cloud infrastructure, enabling retail cloud solution providers to shift towards innovative product development. The emphasis on innovation is key to the accelerated development of this industry in China.

High-intensity long-term R&D investmentRetail cloud solution providers with advanced information technology infrastructure and strong big data analysis capabilities can better collect, integrate, and analyze data from different links in local retailers' business processes to form more accurate, comprehensive, and actionable insights. However, they need to make continuous long-term investments to establish native cloud architectures, adopt large-scale applications, and develop continuously upgraded features to help meet the ever-changing customer needs in a rapidly changing market environment. Therefore, a significant amount of capital must be continuously invested in product research and development, as well as talent cultivation. The huge capital burden poses a high barrier for new entrants.

Proficient industry knowledge and expertiseRetail cloud solution providers, through years of collaboration with local retailers and brands of various scales and formats, have gained a deep understanding of the pain points in the local retail industry. This enables them to offer end-to-end and practical solutions that meet their needs. Domain knowledge and the time required to build industry-specific expertise supporting retail cloud solutions prevent potential entrants from competing with existing participants.

Strong brand awareness and a large customer baseExisting market participants have established brand awareness and customer bases. These customer bases are usually highly loyal because switching suppliers involves significant costs and risks of consumer loss. In addition, existing participants may have developed stronger research or product development capabilities as they upgrade their solutions through various operations with local retailer customers, thereby consolidating their market position.

Addressing the complexity of the local retail marketThe characteristics of the local retail market are complex, ranging from extensive supplier management chains to diverse sales channel configurations. Large local retail entities must establish connections with a wider range of suppliers, while smaller retailers must invest heavily to ensure a stable supply chain. In addition, significant regional differences in geography, consumer behavior, and economic development levels further exacerbate this complexity. Retail cloud solution providers have the opportunity to simplify and expand retail operations by providing integrated resources and management solutions, thereby addressing these challenges.

Embrace the era of artificial intelligence and enhance flexibilityThe emergence of Artificial Intelligence (AI) has brought new opportunities to the retail cloud solutions industry. AI and machine learning algorithms are increasingly integrated into retail cloud solutions, providing in-depth insights into customer behavior, preferences, and purchasing trends. This enables local retailers to predict customer needs more accurately, offer smooth and personalized shopping experiences, and improve customer satisfaction and loyalty. In terms of operations, AI helps with price optimization, fraud detection, employee training, and scalability, allowing local retailers to achieve greater flexibility in operations.

The importance of omnichannel capabilities is growing day by dayOnline shopping has become an important strategic direction for many local retailers and brands. We are gradually realizing that e-commerce is not limited to establishing online channels but also includes the comprehensive digital transformation of core operational capabilities. Retail cloud solution providers play a crucial role in this transformation by developing omnichannel service capabilities. These capabilities enable local retailers and brands to sell products online, establish digital storefronts, and integrate data across channels to improve data insights. The ability to make business decisions based on real-time operational data improves efficiency and leads to better operating performance.

Focus on customer success and contribute to more sustainable business modelsRetail cloud solution providers are placing increasing emphasis on customer success to foster long-term and mutually beneficial relationships with them. Providers who adjust their revenue model based on the success of their customers' businesses will benefit from the growth of local retailers and brands. For instance, retail cloud solution providers can benefit from customers' business expansion through a commission-based fee model and are motivated to offer exceptional cloud solutions. This approach not only strengthens the relationship between providers and customers but also establishes a win-win sustainable business model.

According to the Frost & Sullivan report, ranked by total merchandise transaction volume, we are the largest retail cloud solution provider in China in 2023, holding a market share of 13.3%.

Data source: Analysis by Frost & Sullivan

Meanwhile, we have successfully expanded our business to other Asian countries and regions, including the Hong Kong Special Administrative Region, Cambodia, Singapore, Malaysia, the Macao Special Administrative Region, Indonesia, the Philippines and Brunei. According to a Frost & Sullivan report, in terms of total merchandise transactions, this expansion has made us the largest retail cloud solution provider in Asia for 2023, with a market share of 10.9%.

Data source: Analysis by Frost & Sullivan

The retail digital solutions industry refers to digital solutions designed to help local retailers establish comprehensive digital retail operations. This is achieved by providing configurable SaaS modules, optional collaboration with complementary hardware or software, or developing customized solutions to meet customers' unique needs. The main goals are to improve the operational performance of local retailers, strengthen cost reduction, further achieve revenue growth, and ultimately improve the shopping experience of end customers. Retail digital solutions mainly include retail SaaS, retail point digital solutions, and other related value-added services, which can be sold separately or as part of a solution package.

The three main business models in the retail digital solutions industry are subscription model, rate-based model, and fixed fee model. The subscription model involves customers paying a regular fee weekly, monthly, or annually to use retail digital solutions, which can be flexibly renewed or canceled as needed. The rate-based model charges a percentage of the total local retailer transaction volume processed by the digital solution in advance. The fixed fee model is used for customized development projects tailored to specific customer needs, with revenue recognized at the time of sale or within the contract period.

Calculated by revenue, the market size of Asia's retail digital solutions industry increased from RMB 8.8 billion in 2018 to RMB 31 billion in 2023, with a compound annual growth rate of 28.5%. It is expected to further grow at a compound annual growth rate of 21.1% from 2024 to 2028, reaching RMB 80 billion by 2028.

Data source: Analysis by Frost & Sullivan

Calculated by revenue, the market size of China's retail digital solutions industry increased from RMB 4.8 billion in 2018 to RMB 18.7 billion in 2023, with a compound annual growth rate of 31.0%. It is expected that from 2024 to 2028, the industry will further grow at a compound annual growth rate of 27.7%, reaching RMB 618 billion by 2028.

Data source: Analysis by Frost & Sullivan

Market participants in the retail cloud solution industry and the retail digitalization industry operate within the local retail sector, providing retail SaaS as a basic service component of the retail digitalization solution industry. Retail cloud solution providers not only serve local retailers but also other participants such as brand owners and consumers. Retail digitalization service providers focus on providing solutions to help local retailers establish comprehensive online and offline digital retail operations in various retail scenarios and optimize the operation of all retail processes.

Data source: Analysis by Frost & Sullivan

Technology and data-driven innovationRetail digital solutions refer to those aimed at helping local retailers establish comprehensive digital retail operations. By providing configurable SaaS modules, optional collaboration with auxiliary hardware or software, or developing customized solutions to meet customers' unique needs, local retailers can more effectively improve their operational performance, reduce costs, and ultimately enhance the shopping experience of end consumers through AI and big data analytics-based insights into local retail business and market intelligence.

The growing demand for intelligent shopping experiencesWith the development of technology, consumers expect a more personalized, intelligent, and convenient shopping experience in stores. Retail digitalization solution providers offer software services to local retailers, analyzing consumer behavior data in real time and providing customized recommendations. At the same time, retail digitalization solution providers can also provide local retailers with advanced hardware products such as AIoT-enabled shopping carts and intelligent checkout solutions to simplify shopping processes and enhance the intelligence and convenience of shopping. Retail digitization includes a set of hardware and software aimed at helping local retailers establish comprehensive digital retail points, improve store management efficiency, and continuously improve the shopping experience.

Omni-channel barriersThe omni-channel capability enables local retailers to achieve comprehensive data synchronization and break down data silos. Retail digital solution providers not only need to have data collection and analysis capabilities but also a thorough understanding of the depth and diversity of retail channels. In addition, they must possess multi-dimensional and in-depth data usage and analysis skills to further realize the synergistic effects of multi-channel data. It is difficult for many newcomers in the industry without rich retail experience to gain a deep understanding of the multiple channels of local retailers.

economic barriersRetail digital solution service providers need to build native cloud architectures and achieve large-scale adoption of product applications, which is a long-term and continuous investment. They must continuously adapt to business development and environmental changes, as well as maintain high-speed iteration. Therefore, significant investments are necessary in product research and development, cultivating professional talent, and enhancing management capabilities. The huge capital requirement constitutes a barrier for new entrants in the industry.

Seamless integration of hardware and softwareLocal retailers typically use traditional hardware that may not be compatible with newer retail software. Since local retailers purchase hardware and software from different suppliers, each with its own standards and agreements, the dispersion of suppliers exacerbates this problem. This challenge presents significant market opportunities for integrating hardware and software to achieve coordinated effects. For example, hardware such as automatic checkout systems can be combined with inventory management software to reduce waste and prevent out-of-stock situations, thereby improving workflow efficiency and streamlining operations through seamless integration.

A complete product matrix to meet the needs of local retailers across all scenarios and linksRetail digital solution providers with a complete product portfolio can explore more market opportunities and meet the diverse needs of local retailers across various scenarios, from supply chain to end consumers. This includes solutions for supply chain optimization and customer relationship management. As more local retailers adopt e-commerce, digital solution providers offer comprehensive omnichannel solutions that enable local retailers to manage their online and offline businesses seamlessly. These solutions include hardware and software product portfolios to support features such as click-to-purchase, shipment to store, and cross-channel inventory visibility. Therefore, applying a complete product portfolio to local retailers represents an expanding market opportunity.

As customer needs continue to change, the adoption of retail digital solutions continues to increaseWith the diversification of local retail business scenarios and intensified competition, local retailers and brands are accelerating their digitalization process. They are increasingly seeking solution providers that can offer relevant retail digitalization solutions and value-added services to assist local retailers in establishing digital retail operations. For example, they are using advanced hardware products supported by high technology to support flexible, cost-effective customization and continuous upgrades. Retail digitalization solution providers will also focus more on developing product functions and applying artificial intelligence, business intelligence, and other innovative technologies to meet the ever-changing needs of retailers, brands, and consumers.

The synergy between hardware and software is becoming increasingly important in establishing digital retail points.The synergistic effect between hardware and software is increasingly important for establishing digitally optimized retail points. For instance, hardware devices equipped with sensors provide real-time data on customer behavior and store conditions through sophisticated software processing, offering insights that can be used to optimize store layout, manage inventory more effectively, and tailor marketing strategies for consumers. Moreover, in terms of compliance with regulations, hardware-software systems can securely track and store data, ensuring local retailers comply with legal requirements and protect customer information. Therefore, a comprehensive approach is crucial for local retailers to thrive in the rapidly developing digital environment.

According to the Frost & Sullivan report, based on revenue for 2023, the market share of China's top five retail digital solution providers is 23.2%. According to the Frost & Sullivan report, based on revenue for 2023, we are the largest retail digital solution provider in China.

Data source: Analysis by Frost & Sullivan

According to the Frost & Sullivan report, Asia's top five retail digital solution providers account for a market share of 19.0% based on revenue for 2023. According to the Frost & Sullivan report, we rank third among retail digital solution providers in Asia based on revenue for 2023.

Data source: Analysis by Frost & Sullivan

Frost & Sullivan has extensive research experience in the e-commerce and logistics industries, assisting well-known enterprises in successfully listing on capital markets. Successful listings include: Aokii (2519.HK), Yida Cloud (2505.HK), PanYuan International (2516.HK), Transcom Global (LGCB.NASDAQ), Webuy (NASDAQ:WBUY), Liming Technology (2405.HK), Zibuy (2420.HK), Blibli (BELI.IDX), Starbox (NASDAQ:STBX), Dajian Cloud Warehouse (NASDAQ:GCT), Youhe Holdings (2347.HK), YesAsia (2209.HK), Huaxin Holdings (8442.HK), Shangjin International (2528.HK), Taobao International (6110.HK), Baby Tree (1761.HK), SeCO China (NASDAQ:SECO), Barbie Bebe (8297.HK), Jumei Youpin (NYSE.JME), Vipshop (NYSE.VIPS), and others.