The global digital economy is accelerating, and a new self-reliant digital transformation (DX) industry ecosystem is emerging. Technologies such as big data, cloud computing, and artificial intelligence are driving strong growth in DX industries.

According to data from IIMEDIA Research, the DX industry in China reached a scale of RMB 2.096 trillion in 2023 and is projected to reach RMB 3.701 trillion by 2027, highlighting immense market potential. This dynamic shift is ushering in the era of “Great DX.”

Recently, Jason Zhang, President of Kingdee Group, shared in an interview at the 2024 Global Innovator Summit, “The transformation brought by cloud to Kingdee over the past decade has been profound.” Kingdee’s 2024 mid-year performance report showed that cloud service revenue grew by 17.2% year-over-year, accounting for 83.2% of total group revenue. Jason Zhang noted that Kingdee’s full product suite is now adapted to support chips, operating systems, databases, mainframes, middleware, and complete enterprise cloud services, demonstrating that China’s software ecosystem can now support a self-sustaining domestic cycle. He further disclosed that “Cosmic APP” is China’s first AI-native mobiles application for enterprise management, and Kingdee will leverage AI-native capabilities to reshape its product ecosystem and seize new growth opportunities in the technology space.

The following are key excerpts from the interview:

Xinhua News Agency: In Kingdee’s 2023 annual performance announcement, Kingdee’s Chairman and CEO, Xu Shaochun, outlined a three-year core strategy of “Subscription First, AI First.” What led Kingdee to this strategic decision?

Jason Zhang: Cloud computing technology is transforming industries. Kingdee embarked on its cloud transformation journey in 2011. Over the past decade, we’ve witnessed the value and benefits that the cloud subscription model brings to customers, which also helped us understand how software can better serve them. This has reinforced our commitment to cloud business as our sole commercial model, and we intend to see it through.

As a tech-driven company, we recognize that AI will fundamentally transform industries and impact every aspect of future life. Just as we evolve, so do our customers, and it’s a continuous cycle of innovation and development. Embracing AI is essential to advancing enterprise management software in China. We have a clear vision that cloud and AI are the future for Kingdee and for many Chinese enterprises.

Xinhua News Agency: What progress has Kingdee made since implementing its “Subscription First, AI First” strategy?

Jason Zhang: The impact of cloud transformation on Kingdee has been transformative; our cloud business now represents over 80% of our revenue. This success positions Kingdee as a leading SaaS (Software as a Service) provider in China, with one of the most successful transformations in the sector. Many domestic peers look to Kingdee to pave the way for China’s SaaS industry, so we shoulder not only our own transformation responsibilities but also play a critical role in the future development of China’s SaaS industry. Over the past decade, we’ve validated that the SaaS model works and achieved notable commercial success.

Last year, we introduced our AI strategy, aiming to rebuild all our products as AI-native. Since last year, we have introduced various AI-based applications in finance and HR. In May of this year, we launched an upgraded AI-native enterprise-grade platform—Kingdee Cloud Cosmic—embedding extensive AI capabilities. We also introduced an AI management assistant for enterprise clients, integrating AI into various scenarioses such as finance, HR, and supply chain.

Today, we launched the “Cosmic APP,” the first AI-native mobiles application for enterprise management in China, developed entirely by Kingdee. This mobiles AI management assistant enables executives and employees to access foundational financial management knowledge and engage with enterprise data through conversational AI, from production operations to HR management. Additionally, the Cosmic APP offers benchmarking against industry best practices, setting a new standard for AI applications in the enterprise management field.

Xinhua News Agency: With China’s support for developing self-reliant DX industries, local companies’ market share in China is steadily rising, and DX solutions have become a key pillar of national growth. How is Kingdee contributing to this development?

Jason Zhang: Kingdee is a product and technology leader with an independent, self-developed system that is unaffected by external factors, making us fully autonomous and secure. China is actively promoting DX industry independence, with a series of national IT requirements. Kingdee’s products are fully adapted to support systems from China Electronics, CETC, Huawei, and the Chinese Academy of Sciences, among others, covering the entire technology stack from chips and operating systems to databases, mainframes, middleware, and complete enterprise cloud services. This demonstrates that China’s software ecosystem can sustain a self-sufficient domestic cycle.

As the leader of the WG22 ERP & Financial Software Working Group and deputy leader of the WG11 Middleware Working Group under the DX Industry Committee, Kingdee actively participates in the establishment and promotion of DX industry standards, fostering ecosystem integration. In November 2023, the “Kingdee DX Base” was launched in Changsha, Hunan, as Kingdee’s second R&D center, dedicated to addressing bottleneck technologies and accelerating the development of domestically produced foundational IT, industrial, and application software.

Xinhua News Agency: Central state-owned enterprises (SOEs) and large corporations place unique demands on their service providers. What insights has Kingdee gained in supporting their digital transformation efforts?

Jason Zhang: The central SOE market is unique, with high expectations for service depth, technical leadership, and specialized personnel capabilities. So far, we have served over 50% of China’s Fortune 500 companies, helping 297 large enterprises achieve DX adoption. Through this journey, Kingdee’s product, delivery, and technical strengths have been further refined.

Our longstanding partnership with China Merchants Group, spanning 28 years, exemplifies this journey. China Merchants has witnessed Kingdee’s growth from a regional enterprise to a global company, with our products evolving alongside their global footprint. Similarly, our collaboration with Huawei is expanding globally, as we grow together.

Xinhua News Agency: What challenges do large corporations face in digital transformation? What advice would you offer?

Jason Zhang: A key challenge in digital transformation is a lack of clear strategic positioning. This leads to risks like data security issues, information silos, and data mismanagement, which hinder efficiency. Companies must align their DX strategies with their business goals and design a strong foundation to fully harness their systems’ potential, delivering real value.

Xinhua News Agency: What industry sectors is Kingdee focusing on in the large enterprise market, particularly among central SOEs?

Jason Zhang: This year, central SOEs are a priority for us. We are targeting key industries to help leaders achieve world-class standards. In advanced manufacturing, we’ve successfully implemented projects for clients like Weichai Lovol, Shaanxi Auto, Siasun Robotics, and Fenghua Hi-Tech. In life sciences, we have supported companies like Yangtze River Pharmaceutical and Minsheng Pharmaceutical in achieving compliance and enhancing data-driven management. In high-tech electronics, we’re helping clients like Huawei, Hisense, CETC, Gree, and Haier on their DX journeys. In energy and resources, we’re delivering digital solutions to clients like Tongwei Group, Sinopec, China Minmetals, and Guangdong Energy Group.

Xinhua News Agency: Could you share some examples of successful AI applications within Kingdee?

Jason Zhang: Kingdee has pioneered several AI applications, such as our collaboration with Hisense in HR management, which created a Smart Employee Platform for intelligent talent management. This AI system, embedded in nearly 20 business scenarioses, increased internal recruitment by 120% and improved managerial assessment efficiency by 70%.

Since the beginning of this year, Kingdee has capitalized on the DX and localization momentum among China’s large enterprises. We have continued to secure contracts and bids with industry leaders such as China National Petroleum Corporation, China National Aviation Corporation, Dongfeng Motor, Tongwei Co., Ltd., Beijing Enterprises Water Group, Longfor Group, Haihua Group, Guizhou Moutai, Haipu Zhilian, and China Merchants Shekou. The launch of the Cosmic APP marks a significant step in Kingdee’s “AI First” strategy. We will continue to deliver more AI-driven innovations to lead the enterprise management software industry and support high-quality business growth.