German enterprise business SAP has confirmed it is planning to expand into the Chinese market by exploring new partners within the nation.

In the last year, SAP expanded its cloud solutions for businesses operating on the Alibaba Cloud platform, a section of the Chinese e-commerce leader. Within the agreement, both businesses announced they would collaborate on innovation and commercialisation of new products.

At the World Economic Forum in China, Deepak Krishnamurthy, the Executive Vice President of China stated to media that the business believes in the partnership model and equally believes in focusing on innovation in the Chinese market. Krishnamurthy highlights that they have over 3,000 developers within China and are working on a significant acceleration plan for the nation. SAP believes there is an existing opportunity gap in China, stating that around half of businesses in the U.S. and Europe are currently looking at smart factory solutions, compared to a lower rate of around 25% in China.

Krishnamurthy highlights that SAP customers are within globally connected supply chains, and SAP can support customers manage their supply chain choices by utilising data streams.
Current trade battles between the U.S. and China have caused disruption to trade flows. Businesses are shifting their manufacturing activities from China into other regions within Southeast Asia. Importers from the U.S. and China are also exploring products from other areas that are not affected by tariffs.

Other analysts suggest that as businesses look to move their supply chains into the Southeast Asian region, small and medium companies will implement new technologies into their daily operations, that could lead to a significant opportunity believed to be in the value of $1 trillion.