What’s the New Trend in 2021’s Most Capital-Focused Track?

By Joe Zhang

In 2021， the biggest revelation from the market is that the“track” is very important. So， which tracks are attracting investors attention this year？ Through the inquiries and statistics presented by the “iiMedia Data Think Tank”， it can be seen that medical health， advanced manufacturing， automobile transportation， enterprise services， e-commerce， local life， logistics and so on have undoubtedly become “star”industries in the field of investment and financing from January to October 2021. The ability of these fields to“absorb gold” （i.e. receiving financing） was prominant， and the investment and financing amount reached RMB 100 billion.

Enterprise services

Industry overview： starting from the definition and development environment of enterprise services.

Nowadays， enterprise services are usually regarded as specialized information services that serve the main body of enterprises， cover the relevant processes of enterprise operation， reduce costs and improve the efficiency of enterprises， and are specifically divided into dozens of sub-areas such as ERP services， fiscal and taxation services， information security service， etc. With global economic development and digital popularization， digital products or services are increasingly being favored by enterprises.

The development of the enterprise service industry cannot be separated from the promotion of the economy， technology and capital.

In terms of the economy， the scale of the digital economy market is growing. According to the data from iiMedia Research， the overall scale of Chinas digital economy has contin-ued to rise since 2016， reaching RMB 41.4 trillion in 2020. With the continuous development of the scale and technical level of the domestic digital economy， refined and personalized services will become the new development direction of the industry. With the application of data collection automation technology in the industry， service providers will break through the data barriers between enterprises and service providers， expand the service radius， and bring a new driving force to the growth of the enterprise service market.

In terms of technology， technological development has stimulated the development of the enterprise service industry. According to the data from iiMedia Research， in 2021， the total number of 5G base stations and 5G connections in China are predicted to be as high as 470，000 and 44 million respectively， with growth rates of 56.7% and 1，000% respectively. Moreover， the number of racks in Chinas data centers has steadily increased to 2.27 million in 2019， while the scale of the public cloud market is predicted to reach RMB 134 billion in 2021. The construction， popularization and improvement of new technologies such as 5G technology， big data and the public cloud have provided the technical foundation for the refined， intelligent and personalized industry reform of the enterprise service industry， which will further stimulate the development of the industry.

In terms of capital， capital continues to be vigorously laid out in enterprise service industries. According to the data from iiMedia Research， in 2020， there were 708 investment and financing events in domestic enterprise services， involving RMB 209.227 billion. In terms of fields， among the investment cases in enterprise services， the top 3 fields of investment and the financing amounts thereof were industry informatization and solutions （114 cases， RMB 73.788 billion）， cutting-edge technology（108 cases， RMB 57.789 billion）， and enterprise data services （103 cases， RMB 16.447 billion）.

iiMedia Consulting analysts be- lieve that the capital environment of Chinas enterprise service industry has gradually changed from a self-rolling mode to a VC capital-driven mode， and financing events of tens of millions of RMB are common. In recent years， industry investment and financing have tended to focus on head companies， and the amount and quantity of investment are concentrated， which is beneficial to the integration of industry resources and technologies and the enhancement of the competitiveness of enterprises by means of mergers and acquisitions， etc.

Market analysis： China has the largest enterprise service market.

Among the usage patterns of enterprise service users， platform-based enterprise services account for the largest proportion （64.6%）， and the proportion of enterprise services that are leased and outsourced is 3.9% and 24.4% respectively. Although platform-based enterprise services generally cant participate in the whole project process， this has become the choice of most users because of the large service radius and low cost thereof.

From the perspective of industry cognition， the most well-known enterprise service products in the workplace come from collaborative offices， enterprise security and human resources， accounting for 51.9%， 45.5% and 43.0% respectively. With the penetration of products in the field of enterprise services in manufacturing， retail， the Internet and other industries， the demand elasticity of enterprise users is becoming lower and lower， and the market potential is expected to be further developed.

Specifically， in terms of the market scale， China has the largest enterprise service market， with the number of entities thereof reaching 41 million in China， and the corresponding market reaching more than one trillion. In contrast， the number of entities in the United States， the European Union and Japan is only 25 million， 15 million and 6 million respectively.

As for the 2B enterprise service market， domestic representative enterprises such as UFIDA and Kingdee are still far behind foreign enterprise service giants. The sum of the market value of foreign enterprise service giants Oracle and Salesforce is 21 times that of domestic enterprise service companies UFIDA and Kingdee. However， from another perspective， this big gap also indicates development space. Against the backdrop of the countrys advocacy for digital transformation， the larger domestic market will cultivate more domestic enterprise service giants.

Future trend： the degree of intelligence is deepening， and industry is gradually becoming ecological.

1. Intelligent enterprise service industry. In the early stages of the development of the enterprise service industry， enterprise service software is developed from functional software into easy-to-use software platforms integrating various functions. At present， with the development of information technology such as machine learning， big data， cloud services， etc.， the industry is gradually developing towards intelligent software. Machine learning not only makes services more intelligent， but also broadens application scenarios.Big data makes it more advantageous for enterprises to mine data value， and provides new ideas for enterprise decision-making. Cloud services make it possible to store， read and invoke the required information from the cloud anytime and anywhere. In the era when data is king， mining the value of data is a more critical step， and intelligent enterprise service products can optimize the operation structure of enterprises and have great potential.

2. The enterprise service industry is gradually becoming ecological. Although each vertical field of enterprise services presents different competition patterns， the industry has the ability to open up the data wall of business processes between fields， industries and upstream and downstream enterprises， realize flexible employment， data exchange and integration of production-> channels-> terminals， and digital industrial chain platforms， thus forming an enterprise ecology and strengthening the data interaction ability， and at the same time， also poses new challenges for data exchange technologies such as data transmission and data security. In the future， Internet companies， cloud service providers， enterprise security service providers and other information subjects in this ecology will unite to establish their own competitive barriers in the enterprise service market through data interconnection， and will launch one-stop services to provide more choices for enterprise users.

Local life

Industry overview： the development status of each subdivision of local life.

The local life industry covers more than a dozen sub-sectors such as catering， food and beverage， pet services， beauty services， community services， housekeeping services， wedding services， leisure and entertainment， campus services， merchant services and information technology. At present， the coverage of local life services has become gradually perfected， but in the face of the diversified needs of consumers， the coverage of industry services will further need to be expanded.

1. Catering industry

Chinas catering industry has maintained a good state of development. According to the data from iiMedia Research， the income of Chinas catering industry increased from RMB 3.23 trillion in 2015 to RMB 4.67 trillion in 2019. Although the overall income scale declined in 2020 due to the impact of COVID-19， with the slowdown of the domestic pandemic and the accelerated recovery of the catering industry， the income of the catering industry reached RMB 2，171.2 billion in 2021.

From the perspective of industry trends， take-out services， pre-prepared semi-finished products and specialty snacks have gradually become the representatives of new retail in the catering industry. Among these， from the aspect of pre-cooked vegetables， as of the end of April 2021， there were 71，900 pre-cooked vegetable-related enterprises in China. In 2020 alone， there were 12，500 new registrations， up 9% year-on-year.

In April this year， Weizhixiang， which focuses on the research， development， production and sales of pre-prepared vegetables， was successfully listed as “the first business relating to pre-prepared vegetables”. At the same time， Haidilaos “Dinner opening” series of products were launched on all major official channels. The “Jia Guolong Kung Fu Cuisine” brand， which is the main semi-finished dish launched by Xibei Restaurant， has opened more than 200 shops. MISSFRESH launched the “Famous Cuisine Shop” channel. Ding Dong grocery shopping has also taken pre-prepared dishes as one of its key efforts. In the category of “quicker cuisine”， the crayfish product “Boxing Shrimp” achieved sales exceeding RMB 100 million in just a month and a half after its online launch.

From the perspective of investment and financing， there was a total of 130 financing events in the catering industry in 2020， with a total financing of RMB 54.128 billion. Among these， there were only 7 cases of financing in December， but the financing amount was as high as RMB 21.984 billion， accounting for 40.6% of the annual financing amount. Since the beginning of this year， the enthusiasm for capital investment in the catering industry has continued to rise. In the first ten months of the year， there were 55 investment and financing cases in Chinas catering industry.

In terms of fields， pasta， tea， hot pot， snacks and so on are all favored by capital. Among these， driven by consumption upgrading and product diversification， the Chinese noodle restaurant industry is developing rapidly. According to the data from iiMedia Consulting， the revenue of the Chinese noodle restaurant market will reach RMB 312.09 billion in 2021， and it is estimated that the revenue will exceed RMB 430 billion in 2024. The noodle restaurant industry will be further developed under the impetus of the recovery of the catering industry since the pandemic and the entry of capital.

iiMedia Consulting analysts be-lieve that the current catering industry is ushering in a golden age. On the one hand， the attention paid by capital to the catering industry continues to rise. On the other hand， economic growth and consumption upgrading have opened up broad market opportunities for the catering industry. Nowadays， internal circulation has become an important direction for Chinas economic development and the main lever with which to expand domestic demand and boost consumption. As an important area of national consumption， catering is naturally an area where capital is worth more.

2. Pet services

In recent years， the number of cats and dogs raised by urban and rural residents in China has increased dramatically， and the “treatment” of pets has also continued to improve. Due to the importance of pets， the improvement of pet owners awareness of raising pets， and the improvements in purchasing power and willingness， the pet economy has also achieved rapid development.

According to the data from iiMedia Research， the scale of Chinas pet market has showed a continuous growth trend from 2015 to 2020. In 2020， the market scale was RMB 295.3 billion， which is a year-on-year increase of 33.5%. With the development of society， the concept of keeping pets has been popularized， and the scale of development of the market has made the extended services in the pet market constantly improve， and the development prospects of the pet market are more optimistic. It is estimated that by 2023， the market size of Chinas pet industry will reach RMB 592.8 billion.

Based on the rapid growth of the market， JD.com and Tmall raced to corner the pet market. In May this year， the pet channel on JD.com， which is positioned as a one-stop pet consumption and service platform， was disclosed for the first time. In the coming year， the resources of the whole platform on JD.com will be integrated to create more than 50 new brands of the first echelon. Coincidentally， in April this year， Tmall also said that in its new fiscal year plan， the pet category will be upgraded to a first-class industry. Tmall will focus on the pet track with its resources and investment in building beauty products， and will build the pet industry into the second biggest Tmall beauty product in the next three years.

In addition to increasing the layout of e-commerce giants，“cloud-raising pets” is also providing a new impetus for the pet industry. In recent years， “cloud-raising pets” has also become a new hot spot in terms of content marketing. Those who cannot keep pets satisfy their inner desire to “nurture pets” by watching other peoples pictures and sharing videos. Nowadays， the main hotspots for“cloud raising” are mainly social platforms such as Weibo and WeChat， and video software such as Kuaishou and TikTok. In the process of “cloud raising”， the fans get both visual pleasure and psychological healing， and sought-after “online celebrity pets”have become a special traffic product. To a certain extent， “cloud-raising pets” provides a new type of entertainment for people who have no pets for the time being， making the possibilities for pets in this track even greater.

The market is hot， and the financing frequency of the pet industry is also increasing year by year. According to the data from the iiMedia Data Center （data.iimedia.cn）， in 2020， there were 27 investment and financing cases in the pet industry， involving RMB 5.671 billion. From January to October， 2021， there were 27 investment and financing events in Chinas pet industry， with a total financing amount of RMB 3.84 billion. From the specific field of financing segmentation， pet food and pet products are still the main focus of capital attention.

The entry of capital makes the competition of pet enterprises more intense and stimulates the growth of the pet industry. In the process of industry development， the domestic market is currently facing a tripartite competition situation between traditional pet food products， well-known foreign brands and new brands. However， in the long run， the pet industry will continue to be shuffled around. If we can make great efforts in terms of quality， research and development， channels and marketing， and can establish brands through long-term operation， domestic brands such as Cheerwin Group and Yantai China Pet Foods Group will be able to successfully “break through”.

3. Wedding services

Since the beginning of the year，the financing frequency in the wedding field has accelerated. In April， Bojue Photography completed the first round of strategic financing. The investor was CR State-Regulated Xiamen Consumption Fund. The financing will be mainly used for ecological market expansion of the wedding industry， research and development innovation in travel auction products， and upgrading of the customer service experience. In October， Mijwed announced that it had won tens of millions of A+ round financing， which was led by Jiahe Capital. After this round of investment， the estimated value of Mijwed exceeds RMB 400 million， and the two sides reached a strategic cooperation on building an SaaS industry chain layout for the marriage industry.

It is worth mentioning that“Golden September and Silver October” is the golden time for concentrated business development in various industries， and it is also the golden time for new couples to tie the knot. During this years “Golden September and Silver October”， as all walks of life gradually began to return to normal， the wedding market also began picking up rapidly. According to statistics， during the National Day holiday in 2021， more than 800，000 couples held weddings.

With the increase in residentsincomes and the improvements in their quality of life， the requirements for the quality of weddings are increasing year by year， and the forms of this tend to be diversified， creating a huge incremental market. The wedding market is divided into a narrow sense and a broad sense， i.e. the wedding industry itself and its peripheral industries. According to the data from iiMedia Research， due to COVID-19， the market size of the wedding industry declined slightly in 2020. However， as the domestic pandemic has gradually come under control， the wedding market will return to its previous growth trend. It is estimated that the market size of Chinas narrow wedding industry will exceed RMB 4 trillion in 2022， while the size of the broad market will exceed RMB 24 trillion.

At present， there are approximately 447 million marriageable people aged 20-40 in China， and the huge number of marriageable people has added potential customers to the Chinese wedding market. At present， Chinas wedding industry is exhibiting the following status and trends： young peoples willingness to marry has declined； the concentration of the wedding industry chain is low； onestop weddings will become a mainstream wedding service； personalized weddings are welcomed by young couples； and wedding consumption has begun to gradually shift from of- fline stores to online.

4. Beauty services

Against the backdrop of the beauty economy， the beauty industry is booming and the market potential remains huge， and has the potential to become an explosive factor in the health and beauty industry. At the same time， high profits， the huge market and countless new beauty products， high-tech nursing instruments and high-tech slimming equipment come out every year， which bring huge business opportunities for the beauty industry.

From the perspective of capital distribution， from January to October 2021， there were 19 investment and financing cases in Chinas beauty industry service industry， with a cumulative investment and financing amount of RMB 2.134 billion. In terms of rounds， the amount of investment and financing in Round A was the highest， with the total amount of 8 investment and financing cases reaching RMB 890 million.

iiMedia Consulting believes that at present， the trend of consumption upgrading is obvious， the concept of healthy consumption is constantly on the rise， and the types of health care and beauty products will continue to be subdivided. In addition， “beauty + health care” is gradually becoming a new consumption choice for the younger generation， and health care and beauty will be totally integrated in the future.