Ignoring Asia's slow business software market, sales-automation specialist AKuP International has issued a challenge to its larger rivals by planning to expand its Greater China operations. The GEM-listed AKuP has acquired a 12.24 per cent stake for US$1 million in Taiwan software firm Universal Enterprise Development (UED). The move is expected to help AKuP improve its marketing, distribution, and research and development programmes, as well as broaden its customer base with government agencies on the mainland, which are keen to adopt customer relations management (CRM) projects and other enterprise applications to boost efficiency in the public sector. Established in 1998, UED claims 50 per cent of Taiwan's local government institutions and more than 200 government agencies use its e-government software. Its subsidiaries, Global Market and Xiamen-based Wingroup Software Network (China), are engaged in the design, development, sale and implementation of e-government systems and related consultancy services for local governments on the mainland. AKuP chairman and chief executive Alex Hu Shin-min predicted that mainland spending on e-government systems would grow significantly over the next five years, following the lead of Singapore and Hong Kong. A recent study by technology consultancy Accenture ranked Singapore second in e-government activities worldwide, behind Canada. Hong Kong was ranked 10th. 'By applying AKuP's CRM technologies in e-government solutions, we can help users focus on call centre operations and online services delivery,' Mr Hu said. He described the UED deal as part of a series of strategic alliances and investments that AKuP planned to maintain steady growth and remain competitive against multinational rivals, such as Siebel Systems and Oracle. AKuP returned to profitability this year after posting first-half revenues totalling HK$13 million, up 13.6 per cent from the same period last year. 'We have successfully evolved from providing single, generic CRM software products offered across different industries to providing specific CRM applications, with a focus on the finance sector,' Mr Hu said. 'The strategic alliance with UED enables AKuP to also develop into a leading e-government solutions provider in China.' Formed in Taiwan in 1995 with the backing of Intel and Taiwan investors Pacific Venture and Grand Pacific, AKuP has steadily grown its CRM business in Greater China. After Taipei, the company established offices in Beijing, Shanghai, Wuhan, Chengdu, Guangzhou, Hong Kong and Singapore. In November last year, AKuP listed on Hong Kong's Growth Enterprise Market as it began exploring markets for its products in North America. Despite its inroads in Greater China, AKuP still has a long way to go before it can come close to what its larger competitors make. Siebel posted third-quarter revenues of US$357.2 million this year. However, AKuP believes its familiarity with regional business practices keeps it in the running for bigger contracts over the next few years. Despite the tough economic environment and weak information technology spending by businesses, analysts anticipate demand for CRM products and services to pick up rapidly in China and India over the next several years. Research firm Gartner projected CRM demand in the Asia-Pacific to reach US$373.8 million in 2006.