The ERP Market in China

The ERP market in China

The ERP market in China is dominated by big players, but local startups are catching up quickly.

Previously, our China experts at China Gravy introduced suitable (S)CRMs for the Chinese market. In this article, our specialists take a closer look at ERP software and tools as well as the implications for the Chinese market.

With a strong focus on manufacturing under the “Made in China 2025” strategy, efficient resource planning is more important than ever for companies sourcing from and collaborating with the Chinese market. 

  • Do you manage an international company, planning to roll out to the Chinese market?
  • Are you a business consultant provider, seeking promising new markets for expansion?
  • Are you an ERP provider, contemplating market expansion in China?

You have come to the right place. With the steep economic growth of the Asian-Pacific region, and China in particular, there is a lot of potential waiting to be lifted. 

In this article, the China specialists at China Gravy analyze the ERP market in China, and give you unique market insight based on a Chinese market research report which is not yet available in English. 

With this, business consultants and ERP providers can assess the potential of the Middle Kingdom. Besides, we enable international companies to identify suitable ERP software to roll out their business in the Chinese market. 

Table of Contents

The Global ERP Market

First of all, ERP stands for Enterprise Resource Planning. ERP is usually referred to as a category of business management software – suits, apps, software. 

Through databases, ERPs enable companies to digitize their processes to save resources, mainly money, and time. Specifically, ERPs enable companies to collect, store, manage, and analyze data from various sources and business activities. They track business resources (raw materials, production capacity, etc.), statuses (orders, payrolls, etc.), and more.

ERPs can share data across departments – from purchasing to manufacturing, sales, and accounting. They can run on-premise, cloud-based and as hybrids. Cloud solutions have rapidly gained popularity in recent years.

Just like most modern software, the majority of ERP systems these days are designed as Software as a Service (SaaS). This lowers prices and reduces the amount of required hardware.

Despite the ongoing Russia-Ukraine war in Q1/2023 and economic slowdown post-Covid, the global ERP software market reached almost 55 billion USD in 2023. This equals a growth rate of around 11%, which is expected to continue.

In fact, the Asia-Pacific market is the fastest-growing ERP market in the world, which is also reflected in the SAP quarterly reports.

ERPs vs. CRMs

While CRMs handle marketing, sales, and customer information, ERPs are used to manage day-to-day business activities like procurement, accounting, project management, risk assessment and compliance as well as supply chain operations. CRMs can be seen as a part of ERPs.

ERP Modules & Structure

The specific structure of an enterprise resource planning system differs among ERP systems. Therefore, we are going to show an ERP structure based on the SAP core modules as an example. In addition to the core modules, SAP also offers extra software, e.g. for supply chain management (SCM) or supplier relationship management (SRM).

  • Human Capital Management: HR
  • Production Planning
  • Materials Management
  • Project System
  • Sales and Distribution
  • Plant Maintenance
  • Finance and Controlling 
  • Quality Management

This allows employees to improve resource usage and save money. By analyzing data in real-time, data-driven decisions can be made and specific actions can be taken.

While almost all larger companies use ERP systems, SMEs increasingly incorporate ERPs into their IT and software infrastructure. The better a company understands their internal process, the better they can plan, allocate, and optimally use their resources, boosting efficiency, saving money and valuable resources. Besides, transparency is increased, and human errors can be minimized.

ERP Software for Western Companies

While there are thousands of small ERP solutions, the market has been consolidated in recent years. The largest ERP system providers globally are

  • SAP
    • SAP Business One: small ERP for smaller companies
    • SAP ECC + S/4 Hana: ideal for small and medium enterprises
    • SAP Business Suite: contains ECC and S/4 Hana software; suitable for larger companies; most Fortune 500 companies use SAP Business Suite for their ERP needs
  • Oracle
    • Oracle Cloud ERP: can handle large volumes of data, quick scaling up
    • Oracle NetSuite: greater standardization, can operate in a multi-tenant cloud environment
  • Microsoft Dynamics ERP AX
  • Intuit: Quickbooks
  • Infor ERP-System
  • Sage ERP X3

Let’s take a closer look at these ERP systems.

ERPTypeCost (Q1/2023)Simplified ChineseTraditional ChineseEnglishNumber of companies worldwide (Q1/2023)
SAP Business OneCloud-based, on premiseFrom 56 USD per user per monthxxx10,810
SAP ECCCloud-based, on premiseUpon requestxxx35,000
SAP S/4 HanaCloud-based, on premiseUpon requestxxx18,065
SAP Business Suite 7Cloud-based, on premiseFrom 56 USD per user per monthxxxn.a.
Oracle Cloud ERPCloud-based, on premiseFrom 9.80 USD per user per monthxxx24,968
Oracle NetSuiteCloud-based99 USD per user per monthxxx33,000
Microsoft Dynamic ERP AXCloud-based, on premise, hybrid210 USD per user per monthx20,000
Intuit: QuickbooksCloud-based30 USD per user per monthxxx241,462
Infor ERP-SystemCloud-based (Amazon Web Services™, AWS®)200 USD per user per monthxxx65,000
Sage ERP X3Cloud-based, on premiseFrom 10 USD per user per monthxxx3,000

None of these domains are blocked in China. While SAP, Oracle, and Microsoft are typically implemented by larger international companies, Western SMEs often use Infor and Sage.

Advantages of ERP Systems

Enterprise resource planning has many benefits for companies in terms of digitization of business processes and optimization of procedures:

  • centralized collection and storage of data
  • more accurate and easier access to information
  • easy reporting and analysis functions
  • real-time mapping of data
  • streamline workflows
  • transparency throughout processes
  • solid data basis to make informed decisions

On the other hand, ERP systems may come with an initial cost for licensing and, if applicable, customization. Training may be required for employees and the management team. This investment pays off through increased (resource) efficiency and more precise planning, which lowers costs in the long run.

You may have guessed it, SAP offers the largest ERP in the world. So, let’s take a look at this system in more detail.

SAP Business One

This popular ERP leverages potential for smaller businesses around the world to digitize and optimize their processes.

The specific advantages of this SAP ERP are its global usability, cost-efficiency, data security, scalability, customization options, and SAP’s customer service.

The seven core functions/modules of SAP Business One are

  • Management & Administration
  • Accounting & Financials
  • Inventory & Distribution
  • Production & MRP
  • Project & Resource Management
  • CRM, Sales & Service
  • Purchasing & Operations

SAP ECC and S/4 Hana

Ideal for small and medium enterprises, SAP ECC ( ERP Central Component) provides a comprehensive suite of integrated business applications. Key benefits of SAP ECC include

  • Streamlining and automation (elimination of manual tasks) of business processes to increase efficiency
  • real-time data and analytics for timely data-driven decision-making
  • Ease of collaboration through centralization
  • Better inventory management to track inventory levels, manage stock, and optimize turnover for a more efficient supply chain management
  • Ease of compliance with regulations and standards through data tracking and reporting

As the “next generation” of SAP’s ERP, SAP S/4 HANA software has additional benefits over its predecessor SAP ECC. The most relevant benefits include:

  • Improved user experience through a more modern and intuitive user interface
  • Simplified data model to reduce data redundancy, improve data accuracy, and speed up data processing
  • Advanced analytics capabilities for data-driven decision
  • Cloud deployment options
  • Support for new technologies like machine learning, AI, and the Internet of Things (IoT)

SAP Business Suite

Suitable for larger companies, the whole SAP Business Suite also contains ECC and S/4 Hana besides other modules. Most Fortune 500 companies use this software for their enterprise resource planning. As a collection of integrated business applications, the key features of SAP Business Suite include:

  • Integrated applications to seamlessly manage different aspects of business operations
  • High customization capabilities
  • Powerful business intelligence tools with real-time insights and analytics for data-driven decision

Now that we have established an overview of the global ERP market, let’s analyze how this looks in China. With market specific requirements, technical and regulatory specialties, the Chinese market tends to march to the beat of its own drum.

The ERP Market in China

The Chinese ERP market started in the late 1980s, and with today’s increased demand for such solutions, the requirements have also increased. Today, many Chinese enterprises (around 35%) also have implemented SAP systems

Generally, the ERP process is designed for rule-based mature economies that promote knowledge sharing and transparency. This can lead to conflicts in governance based systems like China. As part of the industrial internet industry, policies for ERP systems have been intensified. At the same time, the development speed of the ERP software industry is expected to continue to accelerate.

In China, most large companies successfully use ERP software systems, including Principal Century, Puyuan Information, China Software, and the Xiaomi Group. The main industries that use ERP software are manufacturing, communications, construction, utilities, and transportation.

ERP Market Share in China

In 2023, the ERP market in China is expected to reach 2.2 billion USD with a growth rate of around 15% (compared to 11% globally). Consequently, the Chinese ERP market is about 4% of the global market.

There are more than 3,000 ERP software-related companies in China. The market is dominated by a handful of key players.

ERPs used by Chinese SMEs

Small and medium enterprises in the Middle Kingdom typically use local Chinese ERP solutions. However, SAP as the largest global ERP provider also dominates among Chinese SMEs.

  1. Yonyou ERP by Beijing UFSoft (用友): 30%
  2. SAP: 15%
  3. Kingdee K/3 Cloud ERP (金蝶): 13%
  4. Genersoft by Inspur (浪潮): 12%
  5. Digiwin (鼎捷): 6%
  6. Oracle: 6%
  7. Infor: 5%
  8. Aisino Corporation (航天信息): 4%
  9. eAbax ERP (金算盘): 3%
  10. Other: 6%

ERPs used by Larger Chinese Companies

On the other hand, larger companies in the Middle Kingdom typically use international ERP solutions. Unsurprisingly, SAP as the ERP leader worldwide, is the most commonly used ERP system among larger Chinese companies.

Larger companies that already use Oracle or SAP globally, can also do so in the Chinese market. If you are looking for help, an SAP consultancy like SC Silver, China Gravy is partnering with, can provide rollouts, SAP support, custom development, and more, also for the Chinese market.

About SAP China

SAP’s globally renowned ERP system S/4HANA Cloud can be run on Alibaba Cloud among other cloud solutions, and represents an important globalization strategy. As a German company, SAP enjoys an excellent reputation in the Middle Kingdom. 

SAP has been rooted in China for 30 years, employing more than 6,500 staff, and serving more than 16,000 companies in the Middle Kingdom. In the whole country, SAP has more than 100 official partners (according to the SAP Partner Finder) and more than 20,000 certified consultants – only the USA, Germany, and India have more SAP partners in their countries. 

In China, there is an SAP User Group as well as dedicated job boards for SAP consultants. Likewise, on China’s largest job website demand for SAP consultants and developers is high. The monthly salary for SAP Consultants in China ranges from approx. 2,200 USD to 6,700 USD. Demand for talented specialists is high, which underlines the relevance of this business sector.

As such, SAP continues to increase the skills and capacity of China’s workforce and promotes China’s development of enterprises with many positive co-benefits. Thus, SAP contributes to building intelligent digital management skills in China, so China can positively impact the world economy and trade.

As part of SAP China’s strategy, the company is committed to contribute to China’s economic transformation as part of the country’s “in China, for China” strategy. Data transparency, linkage, and green development are part of this digital transformation process.

Limitations of ERP Systems in China

When choosing and implementing an ERP for the Chinese market, careful research and consideration should be applied. Insufficient knowledge of local regulations as well as cultural and technical specialties can become a liability and even disrupt workflows that are supposed to be streamlined.

Besides, knowing which type of Chinese to use can help businesses to reach more consumers in Greater China. When doing business in mainland China or targeting Chinese speakers in Singapore, the use of Simplified Chinese is mandatory. When doing business in Taiwan and Hong Kong, Traditional Chinese has to be used.

Further limitations may include language barriers, reporting formats, cost control capabilities, and the frequency of updates/software re-designs.

Leveraging the China Market Potential with ERPs

The Asia-Pacific, and the Chinese market in particular, are booming. Are you ready to leverage this potential?

Do you manage an international company, aspiring to expand into the Chinese market?

Foreign businesses often struggle with productivity, transparency, and internal controls when entering the Chinese market. ERP systems can help companies to synchronize internal processes, standardize routine tasks, collect and analyze real-time data, and comply with local laws and regulations. This is all the more important when the company’s management is not directly located in the Middle Kingdom.

If you choose to deploy your existing ERP systems to Chinese offices, consider two key aspects

  • connection speed
  • local regulations

ERP systems (and other software) hosted outside of China may face significant slowdowns in the Middle Kingdom and require additional investment to make them compatible with local compliance requirements, like the GAAP accounting standards. A China specialist like China Gravy can help you to get started.

Western companies that already use SAP can also use this system for Chinese subsidiaries as SAP is localized for the Chinese market. An SAP consultant like SC Silver Consultancy can help with the rollout.

Are you a business consultant provider, seeking promising new markets for expansion?

Help your clients to grow in the Middle Kingdom, expand their business, and get new customers. Likewise, by understanding the Chinese market, you can also acquire new Chinese and international clients.

China-savvy consultants like China Gravy can help you to leverage the potential of ERP systems to assist your global clients to thrive in the Chinese market.

Are you an ERP provider, contemplating market expansion in China?

Provide localized products and services for your Chinese clients and international companies that are active in the Middle Kingdom. An expert on the Chinese market like China Gravy can assist you with the marketing, localization process and more.

This brings us to the end of this article on the ERP market in China.

The ERP Market in China – The Takeaway

ERP systems have the potential to increase the agility of a company while organizing and stabilizing their long-term growth. An ERP system optimizes business processes, formalizes, and streamlines them. 

With increased transparency and workflow procedures, employees gain assurance in their everyday tasks, allowing the management team to make informed decisions based on reliable data and forecasts.

  1. International companies, planning to roll out to the Chinese market
  • If you are using a larger global ERP software like SAP, roll out your ERP in the Chinese market – a consultant can help you with this.
  • If you are using a smaller ERP or none at all, consider setting up a larger international ERP system to cover your global resource planning needs.
  1. Consultants, seeking promising new markets for expansion
  • As the Chinese market is booming, further assess it for your clients’ needs – from manufacturing to new customer bases.
  • Offer your services directly in mainland China to serve Western and Chinese clients.
  1. ERP providers, contemplating market expansion in China
  • Understand the technical requirements in the Middle Kingdom and the Chinese culture to provide localized products and services for Chinese and international clients in the Middle Kingdom.

Together with the rapid growth of the Asian-Pacific market and China in particular, the demand for ERP systems continues to grow. Lift the potential of ERP systems and stay ahead of the competition! An expert like China Gravy can help you to get started.

Do you have any questions or want to discuss your China market entry, ERPs, and more? Contact China Gravy to redeem your FREE initial consultation.

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