Chinese financial software market covers banks, insurance companies, finance companies, asset management and trust companies.
Characteristics of China financial software industry:
1) Customers are highly concentrated, and a considerable number of clients are featured with obvious nationalization; as the competition pattern is quite dispersed, software companies have weak bargaining power in negotiation;
2) Most of enterprises focus on undertaking projects instead of selling standardized software products. They generally use different technology for different clients, but have a labor-intensive inclination, and will encounter management bottlenecks when they reach a certain size.
Financial information service sector is the foundation of modern financial service industry and a source of financial innovation. In the countries where financial markets are mature, financial information services involve considerable staff and capital. China financial information service industry commenced in 1990s; constrained by the capital market, it was in the incubation stage before 2005 and the overall development level was low.
In 2009, Chinese Internet financial information market valued RMB2.18 billion, with the average annual compound growth rate of 45.9%. Currently, the industry has reached a certain scale, with many leading companies such as Great Wisdom, Wind Info, East Money, China Finance Online and so on. Several financial information service companies have entered the capital market and continuously enriched their products, with the major products such as financial information terminals, financial websites, BBS and trading software. In 2012, the financial information service market targeting institutional users will value about RMB4 billion potentially. The potential market aiming at high-end individual investors will value over RMB3 billion, while the potential market aiming at medium-end individual investors will value nearly RMB1.5 billion.
In China financial information service industry, most companies have adopted the "Data Terminal (B2B + B2C) + Website Platform + X" business model. China Finance Online and East Money started from website platforms, but then developed towards data terminals. Hithink Flush and Wind Info established 10jqka.com.cn and Windin.com respectively to improve the platform user stickiness. As for data terminals, Hithink Flush, Great Wisdom and East Money in B2C field have developed or will develop data terminals for institutional users, while Wind Info that always focuses on institutional clients launched “Windin Financial Terminal" for individual investors.
In revenue composition, data terminals are the main income sources. Only East Money obtains over 30% of its revenue from advertising. Advertising impacts the end-user experience of data terminals, so advertising revenue is currently gained primarily through website platform, and most companies will apply advertising resources to their own data terminal business first.