Frost & Sullivan releases the 'White Paper on the Chinese E-Signing Market 2025'

In recent years, with the accelerating pace of digital transformation in enterprises and government agencies, electronic signature technology has further developed rapidly in the internal and external applications of various organizations. According to the 'Electronic Signature Law of the People's Republic of China' issued by the Standing Committee of the National People's Congress in April 2005, an electronic signature refers to data contained within or attached to an electronic document in electronic form, which is used to identify the signer's identity and indicate their acknowledgment of the content. An electronic signature is considered reliable if it meets the following conditions: (1) The data used to create the electronic signature is exclusive to the electronic signer at the time of creation; (2) The electronic signature data is only controlled by the electronic signer at the time of signing; (3) Any changes made to the electronic signature after signing can be detected; (4) Any changes made to the content and form of the electronic document after signing can be detected.

Electronic signature vendors refer to those that use electronic signatures as their underlying technology, providing a range of services such as electronic signatures, digital identities, data preservation, seal management, and value-added services for government agencies and enterprises. Based on deployment methods, they can be divided into public cloud, local deployment, hybrid cloud, and Ukey electronic signatures.

Looking at the comparison of four main electronic signature deployment models, the public cloud model is mainly targeted at small and medium-sized enterprises, department-level applications of large enterprises, and individual users. The localized deployment model is primarily aimed at medium and large enterprises as well as government agencies. Ukey electronic signatures can usually be applied to various types of enterprises and government agencies. Although the localized deployment and hybrid cloud models have the characteristics of higher upfront investment and higher operational costs in the later stages, they are more commonly adopted by medium and large enterprises and government agencies due to their ability to meet higher customization needs. Additionally, through local data storage, they can satisfy higher data privacy requirements.

Electronic signatures are mainly based onAsymmetric encryption technologyBy utilizing the one-way and irreversible nature of hash technology, verification is performed by comparing the Hash value of the original text. This is combined with timestamp technology to ensure that the original document and digital signature have not been altered after being timestamped. At the same time, digital certificates and the three or four elements of identity are used to verify the user's true identity. The verification code and secondary signing password during the signature confirmation process verify the user's true intention. Therefore, identity (intention) verification, asymmetric encryption technology, timestamps, and digital certificates together constitute the core elements of electronic signatures, enabling electronic signatures to meet the four necessary conditions for reliable electronic signatures and providing support for the authenticity and reliability of document signing processes in government agencies and enterprises.

The electronic signature market industry chain can be divided into upstream service providers, midstream electronic signature manufacturers, downstream application customers, as well as channel partners and ecosystem partners within the industry chain; upstream service providers mainly include real-name authentication institutions.CA institutionAs well as timestamp service providers, electronic signature manufacturers need to connect with real-name authentication institutions, CA institutions, and timestamp service providers to fulfill the verification requirements for user-signed documents, ensuring that electronic signatures meet the conditions for reliable electronic signatures. Midstream electronic signature manufacturers can be divided into independent electronic signature manufacturers, CA institution (affiliate) manufacturers, electronic data preservation and security institutions/information security institutions (affiliate), and internet service providers. By cooperating with channel partners or through direct sales, products and services are provided to downstream application customers, which can be categorized into government agencies, enterprises, and a small number of individual users. At the same time, electronic signature manufacturers are actively seeking ecological partners. In addition to directly exporting their products, they can also integrate their electronic signature capabilities into the applications of different software manufacturers, thereby establishing an ecosystem for the electronic signature industry.

The midstream players in the industry can be divided into independent electronic signature vendors, CA institution vendors, electronic data preservation and security institutions/information security vendors, and internet vendors. Among them, independent vendors offer more comprehensive and professional products, with software being the main component of their overall solutions. Compared to other types of vendors, such as FadaDa, Contract Lock, Shangshangzheng, andeSign PayPalIndependent electronic signature vendors represented by these companies offer a wider range and higher professionalism of products; CA institutions (owned by) have certain cost advantages as they can directly provide digital certificate services, but their overall solutions mainly consist of hardware with software as a supplement; electronic data evidence preservation and security vendors (owned by) expand into the electronic signature business based on their core electronic data evidence authentication and security services, with a broader scope of operations. However, electronic signatures are usually not their main business, limiting their ability to expand and their ecological layout capabilities; internet vendors also have limited capabilities to expand their electronic signature business due to their broad range of operations. Among independent electronic signature vendors, some possess stronger internet attributes, have gone through multiple rounds of financing, and have achieved rapid product coverage and penetration relying on capital advantages; whereas vendors represented by contract locks focus more on product maturity and the ability to provide products and services to downstream customers.

The downstream customers of the industry mainly include government agencies and enterprises. The main application scenarios of government agencies include internal and external document signing and querying. The main application scenarios of enterprises include human resource management, sales, procurement, supply chain finance, etc.

Looking at the application of government agencies, e-signature platforms help local government agencies and various subordinate units implement seal management systems, and accelerate the construction of digital governments across the region.

Today, the application of electronic signature technology in enterprises is continuously deepening. After 2020, it has even accelerated the pace of digital transformation within companies. Through the technical capabilities of electronic signatures, enterprises and employees can achieve online and remote work. From signing contracts face-to-face offline to completing express contract signings, and now to completing the entire contract signing process through electronic signatures, enterprises' management of online contract signing is more in line with the online office model under the current digital and intelligent transformation. It also provides an important tool for enterprises to reduce costs and increase efficiency. In addition, the application of electronic signatures by enterprises has further extended from initial human resource management, sales management, procurement management to all aspects of business operations, including design and investment promotion, truly helping enterprises reduce costs and increase efficiency.

The electronic signature market began to germinate gradually at the beginning of the 21st century. With the clarification of the legal validity of electronic signatures, the continuous enrichment of participating manufacturers, and the accelerated digital transformation process, the electronic signature industry has developed at a rapid pace.

The healthy development of electronic signatures in China over the past two decades has been inseparable from favorable factors such as the high demand for electronic signatures by governments and enterprises, the mature application of core technologies and cloud services as well as blockchain technology, the active expansion of manufacturers, and policy support.

Looking at the policy side, since April 2005 when the 'Electronic Signature Law of the People's Republic of China' was promulgated by the State Council, clearly stating that a reliable electronic signature has the same legal effect as a handwritten signature or seal, China has been continuously improving and emphasizing the legal effect, requirements, and norms of electronic signatures in different application scenarios. This is aimed at safeguarding the legitimate rights and interests of all parties involved and organizations, as well as individuals, providing a favorable development foundation for the healthy and orderly development of the electronic signature industry.

In recent years, China's "delegating power, improving regulation, and optimizing services" (FARPS) reform has been continuously deepening. The concept of FARPS was first introduced in May 2015 during the "National Teleconference on Promoting the Integration of Streamlining Administration, Delegating Power, and Improving Regulation with Functional Transformation" by the State Council. "Delegating" refers to streamlining administration and reducing entry barriers, "improving regulation" means innovating supervision to promote fair competition, and "optimizing services" means providing efficient services and creating a convenient environment. In September 2018, the Ministry of Public Security took the lead in implementing FARPS for public security traffic management. In December of the same year, it began to deepen the FARPS reform for public security management by reducing the certification materials required for enterprises, thereby reducing their burden and improving work efficiency, thus further facilitating various types of enterprises and the public to handle affairs and start businesses. Electronic signature technology highly meets the national requirements for FARPS reform and helps China build a digital government and digital economy. In recent years, with the high support and encouragement of the state, electronic signature technology has been continuously incorporated into the planning and implementation plans of local governments at all levels in various provinces and cities. In governments at all levels such as Shanghai, Beijing, Shenzhen, Chongqing, Guangdong, Shaanxi, Heilongjiang, Hainan, Qinghai, Jiangxi, Inner Mongolia Autonomous Region, and Ningxia Autonomous Region, there have been key proposals to accelerate its application, thereby enhancing the overall level of digital construction.

On the other hand, in recent years, China's encouragement policies for electronic signatures have continuously been translated into specific downstream applications across various industries, including labor contract signing, procurement contract signing, intellectual property protection, housing contract signing, and more. This has further promoted the implementation of electronic signatures. China's encouragement for the application of electronic signature technology has expanded to various sub-application scenarios, including labor contract signing, procurement contract signing, intellectual property protection, housing contract signing, vaccine production full-chain traceability, and more. At the national and local government levels, efforts are being made to promote the specific application of electronic signature technology in various industries, reflecting China's determination to develop the application of electronic signature technology and supporting the construction of digital government and the digital economy.

Looking ahead, from the perspective of manufacturers, electronic signatures will further extend other value-added services and expand ecological cooperation. From the industry perspective, policies and large enterprises will further promote the stable growth of the industry. During the digital transformation process, various system login authentication methods within organizations are still chaotic, posing security risks such as identity fraud and information leakage. Electronic signature systems with identity verification and tamper-proof capabilities will play an important role in achieving trusted identities and behaviors within the organization's digital transformation. By providing identity authentication and verification capabilities to organizations, they can achieve unified authentication and login for all systems within the organization, archive key operations, and effectively help organizations build a network-trusted digital identity system.

The Chinese electronic signature market is moving towards a new stage of compliance and intelligence: medium to large-sized government and enterprise entities are increasingly strengthening their requirements for the legal validity of signed documents and risk prevention and control of seals, while AI technology is accelerating the upgrade of intelligent risk control and document review capabilities. At the compliance level, with the deepening of digital transformation, especially as government agencies and large enterprises widely adopt electronic signatures and seals in their daily operations, market demand is moving from 'usable' to 'compliant and controllable'. At the intelligence level, the deep integration of AI technology is rapidly enhancing the intelligence level of electronic signature systems. Through behavior recognition, anomaly detection, and risk identification, AI can provide real-time alerts for abnormal seal use, strengthening risk prevention and control; at the same time, its clause parsing and automatic annotation capabilities in document review significantly improve review efficiency, helping organizations achieve higher compliance and accuracy in large-scale document processing scenarios.

Against the backdrop of intensified competition and demand upgrading, compliance, product completeness, technological innovation, precise customer segmentation, and localized service capabilities will become key elements for the success of electronic signature vendors.

Looking at the leading domestic independent electronic signature providers, there are four companies including FadaDa, Contract Lock, Shangshang Sign, and eSign PayPal. Among them, FadaDa was established in Shenzhen, Guangdong Province in 2014 and is one of the well-known independent electronic signature providers in China. It mainly provides legal digital signature technology services for enterprises, government agencies, and individuals through electronic contract cloud platforms or hybrid clouds. Its founder originally had many years of experience in the legal field and has combined his familiar professional expertise with the electronic signature technology capabilities provided by enterprises to offer a series of extended services around the legal needs before and after contract signing. In 2019, FadaDa announced aYunhai CAacquisition.

Contract Lock was established in Shanghai in 2016. As a digital trusted infrastructure service provider, it has always regarded compliance and security as the core concepts of its products and services. It focuses on providing trusted digital basic products integrating 'digital identity, electronic signatures, seal management, digital archives', etc., for government agencies and enterprises. It supports multiple deployment methods such as public cloud, local deployment, and hybrid cloud. In terms of product completeness, the number of medium and large-sized customers, the number of local deployment customers, and the number of local service team members, it is ranked first among independent electronic signature manufacturers in China. At the same time, it has a better industry reputation in terms of compliance. Contract Lock has achieved integration with hundreds of enterprise application software such as WeCom, DingTalk, and Panwei, continuously enriching the application scenarios of electronic signatures.

Shangshang Sign was established in Hangzhou, Zhejiang Province in 2014 and is one of the well-known independent electronic signature providers in China. Based on the public cloud model and public cloud API model, it provides a series of value-added services such as electronic contracts and online signature verification for enterprise customers. In May 2019, Shangshang Sign announced a strategic merger with Cloud Contract, another independent electronic signature provider.

eSign PayPal was established in Hangzhou, Zhejiang Province in 2002, mainly providing electronic signature solutions based on public cloud, local deployment, and hybrid cloud deployment for enterprises, government agencies, and individual users. In terms of overall revenue in 2021, it is also a leading independent e-signature vendor in China. In September 2021, it completed a Series E financing of 1.2 billion RMB and announced a strategic merger and acquisition in the same month.Jinge TechnologySubsequently, a Series F financing round was completed in December 2021.

Leading manufacturers in the industry all provide basic software functions such as electronic signatures, trusted identity authentication, and seal management; in terms of deployment methods, apart from public cloud, some manufacturers also offer private or hybrid cloud deployment options to meet the diverse deployment needs of downstream customers. In addition, a few manufacturers also provide portable hardware products to further meet customers' requirements for security and convenience; in terms of product completeness, Contract Lock provides the most comprehensive product solutions among leading independent electronic signature manufacturers to address the specialized and personalized application scenario needs surrounding seals that go beyond contract management for serving customer groups; in terms of security and compliance, Contract Lock has always maintained a leading position in the industry, with no major security or compliance incidents to date.

Medium and large enterprises or organizations usually face more prominent pain points in document signing and circulation, and have a higher demand for efficiency improvements brought by electronic signatures. They are typically the downstream customers who are among the first to try using electronic signatures and are also the main paying customer group. Therefore, they become a key target customer group for many manufacturers in competing for market share.

Customers who choose local deployment typically come from government agencies or medium to large enterprises. Therefore, vendors with a rich portfolio of medium to large clients often hold a leading position in the local deployment market segment. In terms of the number of local deployment customers, Contract Lock ranks first among leading independent e-signing vendors. At the same time, Contract Lock maintains its leadership in the local deployment e-signing market, with its market share exceeding that of e-Sign Treasure, FadaDa, and ShangshangSign combined.

The Chinese electronic signature market is still in its early stages of industry development. Downstream customers' awareness, acceptance, and usage habits of products are still in the cultivation phase. During this stage, downstream customers typically require manufacturers to provide comprehensive localization services to respond promptly to customer service needs. In terms of the number of cities covered by localization service teams and the number of localization service team members, Contract Lock ranks first among leading independent electronic signature manufacturers.