---
title: "2024 Domestic MarTech Moats: Three Capabilities Companies Must Build"
author: "Unique Research"
sourcePublication: "Unique Research (FFCAP English library)"
originalPublishedAt: "2024-04-19T16:00:00+08:00"
canonical: "https://ffcap.cn/en/research/20240419a0651o00"
source: "https://ffcap.cn/en/research/20240419a0651o00"
language: "en"
cnSourceUrl: "https://view.inews.qq.com/a/20240419A0651O00"
---

# 2024 Domestic MarTech Moats: Three Capabilities Companies Must Build

_Unique Research · Insight · April 19, 2024_

Author: **Dan Ge (葛泳麟)**, Lion City Capital (狮城资本). MarTech as a more must-have enterprise revenue tool than pure cost-cut/admin software has long been the digital-upgrade spearhead — the largest share of the U.S. Cloud100 and a unicorn factory. Yet with slower growth and rising traffic costs, China MarTech penetration remains low. Beyond U.S.–China software-environment differences, the author argues most enterprises still apply traditional software thinking to cost-down/efficiency — and people in China are not that expensive, so value is limited. To win in China, MarTech should center on **revenue growth**. This piece sketches breakout directions from marketing environment, industry challenges, international lessons, and primary-market status.

## Core China challenges from U.S.–China differences

Aside from industrial soil advantages, China’s MarTech core disadvantage is the marketing environment — especially **closed data ecosystems** and **extremely complex, fast-changing reach**:

1.  **Data fragmentation, closed ecosystems.** Domestic giants/social platforms treat data as monopoly assets with very low openness (not a tech problem) — hard to close loops. Overseas (Facebook, Google) largely sandbox-open data so SaaS vendors do ETL and matching, then share media spend — giving MarTech huge room. Domestically, coarse crowd tags / first-party data dominate; a large share of MarTech entry is the data layer — building own DBs or private domains as digital marketing’s first station — often decoupled from marketing outcomes in execution.
2.  **Marketing media / user behavior iterates too fast.** Reach channels are far more complex than the U.S., especially WeChat ecosystem (Moments / mini programs / official accounts / e-commerce / livestream / Channels…). Full-touchpoint tools are required at higher bar. Unlike ERP/finance/HR (relatively stable best practices), marketing is about reading external customer behavior — especially B2C — with huge variables and destructive innovation (audiences, habits, media, tech). Products/services are inherently non-standard and operationally unstable.

From the customer view, value priority is always **RoI conversion first**, then process assetization / automated operating standards. Marketing is a fast-iterating, data-driven cognition industry; traditional software thinking hits a ceiling in China MarTech.

## MarTech giants’ development history

HubSpot, Adobe, and Salesforce all grew from initial product DNA, chose the right strategic path, then merged toward today’s all-in-one marketing stacks. Most instructive for MarTech: **HubSpot** (marketing-cloud DNA).

### HubSpot

Core entry via marketing cloud (Marketing Hub from 2006; largest revenue share). Two decisive strategies:

1.  **Inbound / content marketing orientation (pull).** HubSpot pioneered Inbound — attract via quality content, build trust, convert. HubSpot itself is the model: massive Blog/Twitter/Facebook/LinkedIn attention; multi-year SEO + social ops; lead capture. New users: 33% word-of-mouth, 26% SEO/Google, 13% HubSpot’s own blog. Customer growth (45%) outpaced revenue growth (40%).
2.  **Powerful partner ecosystem.** 1,300+ third-party apps on the partner platform; HubSpot also API-accessible. Partners use HubSpot tools to serve clients; HubSpot amplifies partners — win-win. Ecosystem expands customers and reputation; partners shift project→subscription cash flow; partner sales get ~20% commission. ~40% of revenue from ecosystem partners → sales expense ratio ~50%.

Both strategies answer traditional outbound (push) pain:

-   Outbound has too many variables (media, brand tone, consumer behavior); as markets mature, push marketing grows less effective — high-quality conversion hard to sustain (hence many U.S. long-tail outbound MarTech firms survive; not winner-take-all).
-   Outbound is short-term sales–heavy; Inbound builds long-term trust and brand stickiness.
-   Higher RoI: Inbound via digital channels (social, SEO) often costs less.

HubSpot’s long-term strategy — inbound + massive partners, adapting to change and reaching the long tail — is its success core.

### Adobe & Salesforce (different DNA)

**Adobe** started with 2C creative tools (Creative Cloud). Core strategy: occupy absolute mindshare among content designers (SaaS subscription reform; sky-high Figma acquisition — classic winner-takes-all), then M&A along the chain into marketing cloud (Ad Cloud + Analytics Cloud + Marketing Cloud).

**Salesforce** started with CRM (sales automation) — process-optimization DNA; heavy customization and homogenization are biggest challenges. After PaaS build years (2005–10 heavy spend) and years of product M&A, it connected full customer journeys (marketing–sales–service), raising stickiness and switching costs via a tightly linked product matrix. Both successes had historical contingency — hard to copy.

Because outbound is so complex, almost no enterprise vendor ships a complete closed-loop product alone. International giants took decades of M&A to assemble full matrices.

## China MarTech status

Most MarTech firms still sell single-point solutions. Entry points roughly: **system layer, data layer, ops layer** — all still orbiting IT process cost-down/efficiency. Three common challenges:

1.  **Homogenized competition.** Marketing cloud still largely experience + IT–driven; tech barriers low; homogenization inevitable.
2.  **Decoupled from outcomes.** Business understanding and ops experience often stuck in limited first-party tags and subjective experience — hard to differentiate final conversion/media results. Future MarTech (esp. B2C private-domain) PK core metric is **RoI** — who productizes experience and analytics into intelligent decision layers tied to global RoI will decide willingness to pay.
3.  **No closed-loop / all-in-one product.** Large enterprises often buy several products that do not interconnect. Integrated delivery that strings modules into automation apps will be a hard need.

## Winner pattern — three capabilities for the moat

Future China MarTech unicorns will likely build moats around three capabilities:

1.  **Embrace AIGC; focus on content.** Markets only get more mature and competitive; Inbound’s edge vs Outbound will grow clearer — and Inbound’s core methods (SEO, media strategy, content strategy, brand story) are easier to accumulate than Outbound’s many B2C variables. With GenAI: text→image/video/poster to raise content throughput, cut production cost, lower content-ops hiring bar, shorten cycles; simulation data for mock media prediction / sim A/B for content strategy. Creative GenAI is still early — designer cost-down ~30–80% depending on IT skill. We favor vendors with data accumulation + closed-loop link who can efficiently mass-produce high-end creative.
2.  **RoI orientation — data decision capability is critical.** MarTech centers on optimizing conversion and resource allocation across AIPL nodes. What directly decides marketing RoI is intelligent decisioning from consumer insight (data→precise media/spend strategy). This is the hardest, scarcest link — few founding teams have deep ops experience. Productizing ops experience, user insight, and industry understanding into a one-stop intelligent-decision marketing cloud will fundamentally help enterprises grow revenue (cf. Salesforce’s Einstein for B2B expert decisioning, then ~10 AI acquisitions to iterate; similar breakthroughs appear in China) — and outcompete tools that only chase cost-down/efficiency.
3.  **M&A / ecosystem integration capability.** MarTech is long-tail: global MarTech firm count grew ~65× from 2011–2022, still rising through COVID — because touchpoints change fast, knowledge iterates, cloud lowers entry barriers; overseas many excellent firms lead single points / new tech and coexist with giants (HubSpot ecosystem). In China ecosystems are immature; KA count, budgets, and willingness to pay only support head vendors — we expect a relatively concentrated landscape. Product/team DNA has biases and natural gaps; breakthrough via M&A or ecosystem building will be necessary. As China moves from competition to consolidation, we favor head firms with fast integration capability.

_About Lion City Capital: see CN package for firm intro; charts/images (4) attach on ingest._

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Editorial English edition published on UniqueCapital: https://ffcap.cn/en/research/20240419a0651o00
On-site reading page: https://ffcap.cn/en/research/20240419a0651o00