- Digital tools move from saving money to making money
- Data factors and platform ecosystems open revenue space
- Revenue-oriented transformation demands organizational and compliance capabilities
1. Why the Focus Is Shifting
For years, when private enterprises in China talked about digital transformation, the first word that came to mind was "cost." Deploy systems, streamline processes, cut headcount, reduce inventory. That logic worked well during periods of expanding demand. But as competition shifted toward a battle over existing markets and price wars became common, pure cost-cutting quickly hit a ceiling. Costs cannot fall forever, and excessive cuts eventually damage product quality and organizational morale.
The turning point comes from two developments. First, the institutional layer: the Private Economy Promotion Law took effect on May 20, 2025, offering private firms more stable expectations in areas such as fair competition, investment and financing, technological innovation, and protection of rights. With that stability, firms are more willing to make medium- and long-term investments, including in digital transformation, which typically takes time to pay off. Second, the factor layer: data has been formally recognized as a new type of production factor, and explorations around authorized operation of public data and the building of data exchanges continue. For the first time, enterprises operate in an institutional environment where data can be treated as a manageable asset.
These two shifts have repositioned digitalization. It is no longer merely an internal efficiency tool; it is becoming a means of external business development and direct revenue creation.
2. Three Practical Paths to Revenue-Oriented Digitalization
The first path is data-enhanced products and services. Manufacturers that accumulate equipment operating and usage data can shift from "selling equipment" to "selling equipment plus maintenance plus data services." Customers pay for continuous availability, and the enterprise earns recurring revenue rather than one-off order income. The key here is not technological sophistication but a genuine understanding of what customers are willing to pay for on an ongoing basis.
The second path is refined management of channels and traffic. Many private firms have historically relied on a single channel or a few large clients, leaving them with weak bargaining power. Digitalization allows them to build their own customer touchpoints, accumulate private-domain clients, and drive repeat purchases and cross-selling. This is not simply "opening an online store"; it is about transferring customer relationships from individual salespeople to assets the company can manage, analyze, and reuse.
The third path is compliant monetization of data assets themselves. Subject to legal compliance, de-identification, and authorization, firms can use accumulated industry data for joint modeling, industry index publication, and supply chain collaboration. Compliance is the precondition: lawful data sources, clear authorization, and defined usage boundaries. Without these, efforts to generate revenue may instead generate risk.
3. Three Capabilities That Revenue-Oriented Transformation Requires
Moving from cost reduction to revenue growth actually raises the difficulty. Cost-cutting mainly tests execution; revenue growth tests judgment and organizational capability. The first capability is organization: revenue-oriented digitalization often requires cross-departmental collaboration among sales, product, data, and finance. If the organization remains siloed, data will circulate only within departmental walls. The second is performance measurement: if the IT department's KPIs remain "number of systems launched" or "failure rate," it is unrealistic to expect it to think about revenue. Metrics need to align with business outcomes. The third is compliance: for activities involving data collection, use, and cross-border flows, internal rules should be established in advance, turning compliance into a capability rather than a burden.
Revenue-oriented transformation does not exclude cost reduction; the two are additive. A stable cost structure creates the capacity for incremental exploration, and new revenue streams genuinely strengthen a firm's resilience against cyclical fluctuations.
Conclusion
Digital transformation has reached a stage where the question is no longer whether to transform, but where to direct the transformation. For private enterprises, turning digitalization from a cost item into a revenue item is both a pragmatic response to current competitive pressure and a long-term move to seize the opportunities created by the emerging data factor framework. Institutions provide stable expectations, the market provides real demand, and what remains is for enterprises themselves to build the necessary capabilities.