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spk00: Hello, ladies and gentlemen. Thank you for standing by for iClick Interactive Asia Group Limited's fourth quarter and full year 2020 financial results conference call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Lisa Lee, Investor Relations Director. Lisa, please go ahead.
spk09: Hello, everyone, and welcome to ICLIC's fourth quarter and four-year 2020 Financial Results Conference Call. The company's results were issued earlier today and are posted online. You can download the earnings press release and sign up for our distribution list by visiting the IR section of our website at ir.i-click.com. Jian Tang, T.J., Chief Executive Officer and co-founder of iClick, will first provide a high-level review of the fourth quarter and fiscal year 2020 results and share his thoughts on our execution strategy ahead. Chief Financial Officer Terrence Lee will follow and give us additional insights on the financial results for the fourth quarter and fiscal year 2020 results. and provide guidance for first quarter and full year of 2021. He will then turn the call back over to T.J. for closing remarks before the call is open for Q&A. Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Legislation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the company's 20F, as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also note that ICLIC's earnings press release in this conference poll includes discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. ICLIC's press release contains the reconciliation of the unaudited non-GAAP measures to the most directly comparable unaudited GAAP measures. I will now turn the call over to our chief executive officer and co-founder, Jian Tang. TJ, please go ahead.
spk04: Thank you, Lisa, and welcome to the call, everyone. Given the global challenges faced in 2020 brought about primarily by the COVID-19 pandemic, I'm extremely gratified to share with you our strong financial results for 2020, which I believe are a testament to the correct strategy we have implemented under the strong execution and the dedication of all the iClickers, the employees at our company. Our customers continue to find tremendous value in our integrated data-driven solutions as they embrace the digital transformation opportunities in China. Meanwhile, we have formed close partnerships with many of the industry-leading technology players, including but not limited to Tencent and Baozun. These factors lead us to believe that a very bright future lies ahead. especially as the global economy continues to recover from the pandemic's impact and as China's digital revolution continues to evolve. Despite its devastating impact, the COVID-19 pandemic has helped educate current and potential brand customers about the importance of digital transformation. online to offline data integration and data analytics in the efforts to successfully devise personalized marketing campaigns, enhance the operating efficiency, and ultimately boost the sales revenue. Thanks to our key account customers' focused strategy and market-leading position, Our enterprise SaaS solutions segment saw its revenue nearly triple year over year in 2020 to 28.9 million US dollars. This was, of course, one of the significant growth drivers of our financial performance in 2020. and we expect continued growth in this segment to play a major role in our future financial growth. 2020 was another record-setting year for us, as we hit historical highs across our key financial and operating metrics, including gross billions, revenue, gross profit, adjusted EBITDA, and adjusted net income. What is especially exciting to us is that 2020 was the first time we realized the four-year positive adjusted net income, which is a true milestone for our company. It indicates that we have successfully reached sufficient economies of scale with marketing solutions and underscores the pivotal strategy of and execution within our enterprise solutions segment. As I mentioned in the past and reiterated in the shareholder letter issued in January, key to our strategic and financial goals is improved profitability in marketing solutions. Further growth in the higher margin enterprise solutions business and additional partnerships with other global technology players and leaders to further complement our product offerings, reach, and penetration, especially in the enterprise solutions segment. To this end, we started 2021 off strong with our strategic partnership with Baozun, a leading brand e-commerce service partner. that helps brands execute the e-commerce strategies in China. Additionally, Baodun has become an important strategic shareholder of iClick, which underscores the importance of this partnership for both iClick and Baodun. In this partnership, iClick will provide front-end SaaS-based solutions as well as a data analytics platform. while Baozun is responsible for the online operation services and the back-end infrastructure services to brands. Together, we will establish an industry-leading private domain traffic e-commerce solution based on the Tencent ecosystem. This strategic partnership will provide lots of synergistic benefits for iClick, first we will benefit from cross-selling opportunities to over 260 of Baozun's brand partners. Having immediate access to such new potential key accounts is quite significant for us, and we will work diligently to gain business from such new opportunities. Second, we can accelerate the conversion rate of our existing clients in our marketing solutions to enterprise SaaS solutions with the comprehensive Turkey solutions we provide to customers. These joint efforts will save our brand partners from having to develop and maintain the infrastructure to conduct e-commerce business on WeChat. Recall that We serve more than 3,000 marketing solution clients, and being able to convert many of these customers to higher-margin enterprise solutions customers would certainly fit our longer-term strategy. We are confident we can become the first choice for key account customers through this partnership with Baozun. Expertise the market share gains. among the key account customers and in turn enjoy significant upside here. Lastly, this strategic partnership will allow us to concentrate our resources on developing the standard SaaS products we will use to penetrate the mid-tier client segment. which will become another growth driver for enterprise SaaS solutions business. We have focused on the key account customers over the past two years since we launched enterprise solutions in 2019 and have accumulated deep expertise for selective industry verticals. We are able to now leverage and replicate the standard modules used successfully with those early customers to tap into a wider clientele. In view of the huge market potential, we anticipate committing more resources to enhance not only our research and development efforts, but also marketing initiatives. We have already established R&D centers in Xi'an and Hefei. where we are aggressively building up a stronger R&D labor force to devote to the customized solutions and developing the standard products. Moreover, we want to further penetrate the mid-tier client market, and to this end, we also introduce and work with a number of potential distributors to help us drive additional revenue from the less penetrated customer segment. Looking ahead, we see 2021 as a year full of opportunities and investments. As always, we remain very open to M&A opportunities that can complement our current product offerings for enhance our market leading capabilities in data analytics and omni-channel management. As an example, our announced acquisition of Polly will enhance our marketing automation and brings rich expertise in widget-based CRM, e-commerce, and marketing SaaS solutions in China. and will be an appropriate product for both mid-tier clients and key account customers. Beyond the continuous product offerings enhancement, we are also keen to explore targets or partnerships that have already built a significant number of specific industry verticals clients, which we are able to cross-sell our products to. With these, we are confident we can see synergistic benefits from both product integration and the acquisition of new clients through cross-selling opportunities. In the meantime, we will continue to execute on our international expansion strategy, which will be primarily driven by the partnerships we have formed in 2020 due to travel restrictions resulting from the pandemic. We also see greater urgency for the international brands to execute the China expansion strategy and expect this dynamic to offer us additional growth possibilities. This concludes my opening remarks, and I would now like to turn the call over to our CFO, Terence Li. to discuss the fourth quarter and four-year 2020 financials. Terence? Thank you, TJ.
spk05: Hi, everyone. I'm very pleased to share with you our record-setting performance for 2020. As TJ mentioned previously, Despite the challenging macro environment brought by COVID-19, we still managed to record highs in gross billing, revenue, gross profit, adjusted EBITDA in 2020, as well as full-year positive adjusted net income for the first time. I would like to begin my comments with a few key highlights from the full year and the fourth quarter of 2020. We reported revenues of $234.7 million for 2020, an increase of 28% year-over-year. Revenue for the fourth quarter of 2020 were $78.7 million, an increase of 39% year-on-year. The increase was driven by healthy growth in marketing solutions and a strong trajectory from enterprise solutions. Looking at each business separately, Marketing Solutions reported a record high, 225.9 million in revenue for 2020, a 20% year-over-year growth. For the fourth quarter of 2020, revenue from this business segment grew 28% to 68.1 million. compared with the same period of last year, primarily due to growing market demand from specific action marketing campaigns. I'm also very excited to share the result of the enterprise solutions business, which nearly tripled its revenue from 2019 and reached $28.9 million in 2020. In the fourth quarter of 2020, Enterprise Solutions hit another record quarterly height with revenues of $10.6 million. The robust growth indicates the strong demand we see from our key account clients across selective industry radicals. It is also worth noting that Enterprise Solutions account for more than 10% of total revenues just two years from launching this new business segment. Gross profit grew by 36% year-over-year in the fourth quarter to $23.3 million, and by 28% for the full year of 2020 to $73.3 million, mainly due to continued growth in marketing solutions and rising contribution from higher margin enterprise solutions. As you may recall, 2020 was not only a record-setting year in terms of financial performances. It was also a year in which we received tremendous support from the capital market. We completed a private placement and a follow-on offering in June and September, respectively, of 2020 and welcomed a number of prestigious international investors as solid long-term shareholders. As a result, we have a healthy cash balance, including cash, cash equivalent, time deposited, and restricted cash of $94.5 million as of December 31, 2020, compared with $61.1 million as of December 31, 2019. For the rest of my discussion, I will focus on our long gap results. You can find reconciliations of these long gap results in the press release we posted earlier today. and which can be accessed at our investor relations website. Adjust EBITDA for the fourth quarter and full year of 2020 was 5.1 million and 17.3 million respectively. Both matches saw a strong increase compared with the same respective periods last year, indicating the operating leverage that the company has achieved. As mentioned earlier in the call, We also recognized the first-ever full-year adjusted net income in 2020. As it reached $7.6 million, the adjusted net income for the fourth quarter was $2.1 million, making the fifth consecutive quarter of positive adjusted net income. Growth billing in 2020 grew 6% year-over-year to $678 million. primarily as a result of increased demand from our key e-commerce, online entertainment and media, and online education and training verticals, and partially offset by the weakness from the hotel and hospitality industry resulting from the pandemic. Meanwhile, in view of the higher uncertainty associated with COVID-19, we strategically shift our focus to high-quality clients, and business to manage our risk. All in all, the fourth quarter of 2020 was extremely strong, and we believe it was a good way to finish a year that was challenging in very many ways. For further information, please see the detailed recap of other financial matches in the press release we issued today. On January 15, 2020, we announced a share repurchase program in which we could purchase up to 10 million of our own ADS through December 29, 2020. On December 10, 2020, we announced another share repurchase program in which we could purchase up to 15 million of our own ADS from December 30, 2020 to December 31, 2021. As of December 31, 2020, the aggregate values of ADS purchased was approximately $5.7 million. I would like to conclude my remarks with our outlook for the first quarter of 2021 and for the full year 2021. Please note that our outlook for revenue is based on current market conditions and reflects our current gauge of the COVID-19 pandemic impact. These assumptions are subject to change. We now project our 2021 revenue guidance to be between $315 million and $335 million. Revenue from enterprise solutions for the year is estimated to be between $60 million and $65 million. We estimate our first quarter 2021 revenue to be between $60 million and $65 million. Revenue from enterprise solutions for the first quarter is estimated to be between $10.5 million and $11.5 million. Looking ahead of 2021, as TJ mentioned, it will be a year of investment and full of opportunity for us. We continue to be cautiously optimistic for the recovery of the marketing solutions as the vaccine rollout moves forward on a global scale. In the meantime, we remain very excited about the rapid growth of the enterprise solutions and the enormous total accessible market. In view of these opportunities, we will allocate our resources more strategically to help support the growth from both business segments. Additionally, we will keep exploring more M&A and capital market opportunities that could help the companies stay on track to evolve into the integrated enterprise and marketing cloud platform to benefit from the rapidly growing online-to-offline digital transformation and SaaS market in China. With that, I now turn the call back over to DJ for closing remarks.
spk04: Thank you, Terence. Our strong financial results in 2020 are indicative that our integrated enterprise and marketing solutions are well received by customers. We will see incredibly significant market opportunities ahead in the online to offline digital transformation initiatives for many current and prospective customers. The underlying consumer transactions that key accounts and enterprise customers are looking to penetrate literally amount to trillions of dollars and we believe our solutions can help such enterprises more efficiently and profitably capture such spending. For marketing solutions, we expect another year of healthy organic growth given the continued growth in the digital advertising market in China and the rising online advertising mix and the programmatic advertising penetration, which is our key business focus and the necessary foundation for the company as a whole. We also expect the enterprise solution segment to continue its rapid growth, giving the large blue ocean of opportunities we see as the digital transformation unfolds in China. We definitely see a higher proportion of total revenue in 2021 from enterprise solutions than it was in 2020, as we form a very clear strategy to continue gaining market share with key account customers, as well as taping into the newly developed mid-tier We will work expediently to grow our customers base in this higher gross margin segment of ours, giving our outlook for both marketing solutions and enterprise solutions. We are, again, certainly optimistic in the company's resilient top line growth outlook, both in 2021 and beyond. I would like, once again, to take this opportunity to thank all our customers and shareholders for the support over the past 12 months. It was a very challenging year, yet we believe our performance shows our ability to overcome obstacles, deliver leading-edge data solutions, and generate shareholders' value. Also, I want to thank all iClickers for the execution during very challenging times and the dedication to the company. Our people truly are the most important asset for the company. This concludes our prepared remarks. Thank you for joining us on today's call. We will now open the call to questions. Operator, please go ahead.
spk00: Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. Please limit yourself to one question. If you have further questions, you may re-enter the question queue. And for the benefit of all participants on today's call, if you wish to ask your question in Chinese, please immediately repeat your question in English. The first question is from Nelson Chang from CITI. Please go ahead.
spk08: Hi, TJ and Terence. Thanks for taking up my questions and congratulations on the strong quarter of results. Actually, I have a few questions for the company. My first question is related to the strong guidance of enterprise solutions in 2021. Can you share whether you have incorporated the financial impact from the Belgium partnership? And if so, what would be the impact on the partnership? And also, I would like to know what would be the target revenue mix for standard SaaS product in 2021. And my second question is related to the Baozhen partnership. And can management share some latest progress of Baozhen partnership? And for example, how many clients have been referred from Baozhen right now? And what is the progress of the e-commerce solutions and the private domain networks? And finally, just a quick question on enterprise solutions. Looking back in 2020, what would be the biggest lesson that management has learned in expanding your enterprise solution business and going forward into 2021? How would management prioritize your resource in terms of client acquisition, product development, and M&A? And then I'll translate it myself. I have three questions. The first question is, first of all, thank you, Manager, for accepting my question. And then the first question is, we see that the guidance of Enterprise Solutions is actually quite strong in 2021. So we just want to understand if this includes the cooperation of Baozhen, and how much the financial impact will be. And then the other one is, on this standardized product, does it have a target ratio? And then my other question is, Thank you.
spk05: Thank you, Lawson. This is Terence. Let me take your first questions about the budget on the Belgian deal. We haven't fully budgeted the deal yet because it just kicked off in the first quarter. As we probably have discussed before, we probably would visualize more income and solid cases going into the second half of the year. So the current budget doesn't really fully Taking into account that probably 10-20% of that was projected right now, but we believe there are more potential to come. And that's for your first part of the questions, my quick answer. Maybe TJ could answer your concern or your questions about the execution part about the Belgium business. TJ, please.
spk04: OK, I will try to answer your second question, which is about cooperation with Baozun. Actually, our cooperation with Baozun was about to close at the end of January. After we closed the deal, we have been very active. I-Click and Baozun, both of our companies, have established a team that directly reports to the CEO. They have been working on joint operations with each other for a period of a week. Here, we are mainly working on First, we will put the best products and services of the two companies in a comprehensive solution, form a good solution, and give a better solution to the customer. Second, we are also exploring for some customer groups to try to see if our solution Okay, let me try to answer the second part of your question about our cooperation with Baozhen.
spk10: Actually, the Baozhen deal was closed at the end of January, and since then, both iClick and Baozhen have established an implementation team which directly reports to CEOs of both sides. And the teams meet on a weekly basis to talk about the cooperation. And our cooperation currently focuses on two areas. First is we combine our best products and operations services into a complete solution to provide to our customers. And second, we explore the feasibility of these solutions on some client base.
spk04: And as to the third part of our question, I'm not sure I understand correctly. Is it about...
spk10: the biggest challenges, or the lessons we've learned in 2020? 我觉得两个都可以解释一下, 就是在20年遇到的一些困难, 还有就是公司学到的一些最大的 message 是什么?
spk04: Therefore, I think we should say that in addition, in the process of doing this, we also found that we should choose to focus on some familiar customer groups and to quickly explore some business models. Therefore, we actually focused on some customer groups that we are familiar with in the past two years, such as consumer goods.
spk10: Well, in 2020, we still think that the digital operation or the SaaS business are the blue ocean market in China. Therefore, we've started to sell SaaS products to our key accounts, which is also our teams. And after over a year of pre-operation, the performance has confirmed our decision. And also, we've focused at the very beginning on familiar clientele. and rapidly explored business models on them. So in the first two years, we focused on consumables.
spk04: And then, in 2021, we still believe that the SaaS track, which is our enterprise solution, still has a very wide room for growth. Not only do we already have a certain advantage in the customer group of KAA, but we also have some customer groups that we haven't really associated with before. So this year, we actually adopted some new strategies. In the enterprise solution, first of all, through cooperation with Baozun, we used a faster speed and efficiency to cut into the customer group of KA. At the same time, through such cooperation, we can focus more resources on developing more and better standardized SaaS products. Then use these standardized SaaS products
spk10: So next step in 2021, our enterprise solutions will still have great potential for us to tap into, not only in terms of the KA customer base where we have great advantages over, but also in terms of mid-end customers. This year, we will adopt a new strategy that is We cooperate with Baozun in terms of enterprise solutions by rapidly and efficiently acquiring key account customers. At the same time, the cooperation with Baozun will allow us to channel more resources in developing more and better standard products to acquire mid-end customers in a fast manner.
spk04: In order to accelerate the expansion overseas, and through our partnership with Oracle overseas, we want to push our enterprise solution to the overseas customer base at a faster pace. At the same time, we feel that we have a great opportunity this year At the same time, when it comes to overseas expansion, we are working with Oracle to target our overseas customers with the enterprise solutions.
spk10: And we think there is another big opportunity facing us is that we will leverage strategic investment and acquisitions to rapidly acquire mid-end customers. So this wraps up my answer to our question.
spk08: Thank you, management. That's very helpful. Thank you.
spk00: The next question is from Brian Kinslinger from Alliance Global Partners. Please go ahead.
spk01: Great. Thanks so much. Can you highlight any changes in the end markets for marketing solutions? For example, has travel returned at all? Does e-commerce remain strong? And any other verticals worth mentioning? And then secondly, you talked about a lot of different aspects of investing in R&D and sales and marketing in relation to Bowsin as well as your enterprise business. Maybe talk about the impact or what is the size of those investments maybe from a dollar perspective on an annual basis from an expense base. Thanks so much.
spk00: Pardon me, is your line on mute?
spk05: Hello, I think T.J. will answer this. From my end, actually the changes in terms of demand on the marketing solution side, and it's still the e-commerce, the online entertainment, and the education sector, basically the strongest sector in the year, and also picking up quite well. going into 2021. And we see some of the travel hospitality sector and branding customer lowering some of the budgets. And in the first quarter, I think this trend remains quite the same, comparing to the previous year in the fourth quarter.
spk01: in terms of the investments and expenses related to, you know, driving stronger growth for the enterprise side? Can you kind of touch on, you know, the impact on the expenses?
spk05: In 2020, we basically add on certain new engineers and R&D team in the enterprise solutions. In particular, we add on more like 200 engineers in the team. So probably we add on at least like $5 million during the year in terms of OPS for the R&D in terms of the enterprise solutions. We also add on some marketing expenses as well and totally extra like $10 million for the year in 2020. And we believe that we'll still be going on to invest more going into 2021st. And we still project around 200 more engineers to be recruited during the years. And also we're building up some channel partners right now. And there will be some new projects and models in terms of these reseller models that we are going into when we work with these new channel partners. Again, I think 2021, we will see some uptake in terms of these marketing and R&D dollars, but should have a positive impact overall in terms of the growth and even speed up further the growth in the enterprise solutions. Great. Thanks so much.
spk00: The next question is from Colin Liu from China Renaissance. Please go ahead.
spk03: Hi, TJ Terrence. Thanks for the chance for the question. I just have one, actually. It's more regarding the partnership overseas, particularly with Orato and other overseas partners. And TJ also mentioned just now that we saw a lot of opportunities from foreign brands trying to tap into Chinese market with travel transferring, which we don't really know why it's going to lift up. So, how should we see the partnership with overseas partners and how should we see overseas coming into China? What sort of business opportunities are there? And is there going to be any sort of upsides to our revenue growth in this year and perhaps even next?
spk05: This is Terrence. I think The deal with Oracle was one typical example of how we may work with some overseas partners. And I think Oracle's solutions, they obviously worry, you know, good solutions globally, Probably in China, there would be some other, you know, adaptation and localizations that they need to try to cater for. And I guess our team with the local expertise would be some of the, you know, very good partners for them when they try to localize the solutions and also execute locally in China. We do have the domain and the knowledge that would be able to help them and to resell the solution and also integrate that with our existing solutions. enterprise-style solutions and to provide more, you know, choices and values for the customers internationally. I think going forward, the international market, particularly after, you know, the COVID, when travel will be permitted, I think we will see even more of these type of opportunities going around. And that's my, you know, inputs on that. We will see if TJ has any comments to add on.
spk04: uh Well, as to international business, this year our strategy is
spk10: to sell our standard products, including the acquired SaaS products, through our SaaS channel, our own SaaS channel, as well as the strategic partners' channels, for example, Oracle's.
spk04: Thank you.
spk00: The next question is from Thomas Chung from Jefferies. Please go ahead. Hello, Thomas, is your line on mute?
spk06: Thanks, management, for taking my questions. Can you comment about the competitive landscape in the enterprise solution business and also our thoughts about the margin profile of this business over the long run? Thank you.
spk04: Hi, let me try to answer your question. Regarding the SaaS solution, we think it is related to the customer group. In China, we think it can be divided into several customer groups. First of all, it is for the big K&A customers. Then, for some middle and lower departments, even some smaller and medium-sized customers, we think that different customer groups may have different ways of playing. For example, we used to do more of this kind of K-A customer group. In this K-A customer group, not only do they need some standardized products, they often also need some customized services because they need to put this standardized product with their original IT infrastructure. At the same time, based on a platform e-commerce environment in China, KA customers have a habit of needing suppliers to help them to use these tools or products for real operations. Let me try to answer your question. As to the enterprise solutions market in China, I think we need
spk10: to look at it from different client segments. In China, we think that enterprise solutions market can be divided into key account segments, mid-end segments, and small and medium-sized enterprises. So we need to adopt different strategies to tackle with or to serve different client segments. And for all these years, we have been focusing on key accounts who not only need standard products but also customized services. because they need to match or link up standard products with their own IT infrastructure. And as to the key account customers that have been growing on e-commerce platform in China, they need suppliers to help them use the tools and the products in their daily operation. After two years of operation and practices in China, we now have established quite an advantage over key account customers. And in particular, early this year, we have established a cooperation with Baozun, which will further consolidate our leading position in the key account segment.
spk04: And for the customer groups in the central and central departments, and the customer groups in the small and medium enterprises, standardizing products is often a better choice. So for this market, in the second half of last year, we have also launched more and more standard SaaS products. And this year, we will officially enter the competitive ecosystem of such a customer group for the central and central department customers. For small and medium-sized customers and some central and central department customers, There may be two companies that everyone knows of, that is, Youzhan and Weimeng. In fact, they are all listed companies in Hong Kong. They have some market share in the small and medium-sized customers and some in the medium-sized and small-sized customers. But we think that for some medium-sized and small-sized customers, the market space is very large. We have actually found our own execution path through some attempts. So as to the mid-end,
spk10: customer segments and small and medium-sized customer segments, standard products will be a better choice. In the second half of last year, we've already launched standard SaaS products to cater to the needs of these two market segments. And this year, we're going to formally enter the competitive landscape of the mid-end customer market or segments. And as to the SME, or small and medium-sized business market segment, and some mid-end customer segments, there are two famous companies you must have already known. That is Waymob and Youzhan. Most of them are listed in Hong Kong, and they have acquired some market share in these specific segments. But I think that mid-end customer segment is a huge one. And we have found our execution pathway through periods of exploration. So later this year, we are going to disclose our operational data. And we have already developed our products and tried them on some of our customers. So I believe that this year we're going to gain enough growth in this market segment.
spk04: 对,这个是我们目前对于这个在中国的一些 enterprise solutions, SaaS这个市场上的一些基本的一些看法。 So this is my view about the enterprise solutions business in China. The next question is from... Sorry, please go ahead.
spk10: So this is my view about the enterprise solutions in China.
spk00: The next question is from Carson Lowe from HSBC. Please go ahead.
spk07: Hey, hi TJ, Terrence and Lisa. Thanks for taking my questions and congratulations on the strong quality result. So I have a few questions here relating to the NPI solution. So the first one is kind of follow up to what Thomas has asked about the competitive landscape. So, so in terms of the standard products that we are going to tap into the mid-tier SME market, So from the customer perspective, what the management thinks is in terms of the product itself, what is the differentiator for iClicks products versus the peers like what TJ has mentioned, Yochan and Raymond. And then in terms of the margin, so because we are going to adopt the reseller model, so how is the margin profile for these SME standard products versus what we provide to the K8? And that's the first question. And the second question is I want to ask more about the customer base, the K8 customers for the enterprise solution. So how many customers have we landed in Q4? And what's the customer number by end 2020? And also, how many of the customers that we acquired in 2019? So how many of them have had... actually renew contract with us in 2020.
spk05: Hi, Carson. Thank you very much for the questions. Let me first take the questions about, firstly, our customer number for 2020 and the fourth quarter, and then about some analysis about the margins profile would be in terms of the new standardized product that we are going to launch. Firstly, in the fourth quarter of 2020, on the key accounts clients on enterprise solutions, we got pretty much, again, another 50, 60 clients. So all together for a year, it's actually up to 200 already for the enterprise SaaS solution client. And the retention rate right now is pretty wild, over 95% plus. We probably used some really small clients, but not significant ones. And in terms of the, you know, margin profile about the new standardized solutions that we are launching, I think comparing to some of the peers, you could see some of the standardized products pretty much would enjoy relatively high gross margin, like the 70%, 80% puffs. I guess there would be some accounting models that we need to further study, but basically that would be the kind of models that we are also looking for for the standardized product. And there would be substantial or much more marketing dollars in terms of some revenue sharing and speed to some of the channel partners. And that probably would be like 50% in terms of the dollars generated have to be shared with these digital builders. But that would be reflected in the operating expenses as part of the sales and marketing dollars, as you guys probably are familiar with. That's the typical models, and we're also looking forward to a similar profile at the moment. But having said so, we didn't really run into that in 2020. We just kicked off that part of business in 2021, and not really significant at the moment. And I think that's my answers to some of your questions. And I will leave the positive differentiation part to TJ. Thank you, Coach Haslam.
spk04: Okay. Okay. ah, ah, ah, There is this kind of social CRM product based on corporate WeChat. We think that such a product is very suitable for helping these companies to connect their operating capabilities with offline consumers and to import some offline traffic online. Our main difference is that it is based on a set of online and offline joint solutions. At the same time, it is based on the experience accumulated by many large customers. We will not only export such products to the customer service department,
spk10: Well, okay. I'd like to answer your question about the difference between our standard product and the competitive products. First, we have very clear positioning for our client base. We target chain stores with 10 to 20 and even more outlets in third and fourth tier cities in China. And I believe there are a lot of them in the Chinese market. And the second, we not only provide mini apps to them. We also have the social CRM based on the WeChat work products. So these products will help these enterprises to improve their operating capabilities and better serve their offline customers and can also help channel offline traffic to online platforms. So our differences lie in two areas. First is the offline to online integrated solution based on WeChat work. And the second is we have accumulated great operational experiences with key account customers so we can replicate these operational methodology and practices to serve mid-end customers. In conclusion, what differentiated us from others is we not only sell products We also help customers to understand how to use our products.
spk00: As there are no further questions, I'd like to turn the call back over to the company, to Lisa Lee for closing remarks. Please go ahead.
spk09: Thank you everyone once again for joining us today. If you have any further questions, please feel free to contact ICLIC's Investor Relations Department through the contact information provided on our website. Thank you.
spk00: This concludes this conference call. You may now disconnect your line. Thank you.
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