Cloud Services (China Market)

2022:10% Market Growth

In 2022, the volume of the Chinese cloud market reached $30.3 billion, an increase of about 10% compared to the previous year. This is evidenced by the results of the study, published by Canalys on March 20, 2023.

Analysts note that the pace of development of the PRC cloud industry has slowed down significantly due to macroeconomic difficulties and restrictions caused by the ongoing COVID-19 pandemic. In particular, in the period from 2019 to 2021, growth in the relevant area annually exceeded 30%.

Chinese cloud market up 10%

In 2022, PaaS solutions (platform as a service) accounted for 23% of the entire Chinese cloud services market. Cloud requirements from enterprise customers have become more complex, and the focus has shifted from simply providing cloud infrastructure to providing a comprehensive cloud platform with comprehensive software features, said Yi Zhang, an analyst at Canalys Research.

Alibaba Cloud became the largest cloud provider in China in 2022 with a share of about 36% in total costs and an increase of 7% on an annualized basis. In second place is the Huawei Cloud platform, which occupies 19% of the PRC cloud industry. Moreover, compared to 2021, Huawei showed an increase of 13%, which is higher than the average for the local market. Tencent Cloud closes the top three with a result of about 16%: during 2022, the company's business development was affected by internal restructuring, which led to a slowdown in revenue growth. The fourth place in the ranking went to Baidu AI Cloud, whose share was 9%, with an increase of 11% on an annualized basis. All other participants in the Chinese cloud market together control approximately 21% of expenses.

In China, services IaaS (infrastructure as a service) are most in demand, which accounted for 77% of all costs. Another 23% brought PaaS solutions.^[1]

2021: Cloud services market up 45%

The Chinese cloud infrastructure services market grew by 45% to $27.4 billion in 2021. This was reported by researchers in mid-March 2022. Canalys

The market growth was influenced by factors such as remote work and training, e-commerce and content streaming. In addition, the boom in the implementation of the digital transformation strategy by traditional enterprises has increased the demand for services. Canalys expects the cloud infrastructure market in mainland China to reach $85 billion by 2026, representing a five-year CAGR of 25%.

Chinese cloud services market soars 45% in a year

In 2021, Alibaba Cloud retained its leadership and became the number one player in the cloud computing market, Huawei and Tencent took second and third places, respectively. Baidu is in fourth position. The four largest cloud service providers accounted for 80% of the market in 2021, and all four are launching strategies to leverage growth opportunities in industry vertical solutions. Alibaba Cloud accounted for 37% of total spending. A slight decrease in Alibaba's market share in 2021 is mainly due to political regulation, which affected it, slowing down customer growth on the Internet.

Huawei Cloud's market share reached 18% in 2021, increasing by 67% annually. Rapid growth widened the gap between Huawei Cloud and Tencent Cloud and secured a second market position. With special industry experience with government agencies, Huawei Cloud has consistently maintained a leading position in this segment. Being the only "non-Internet" company among the three leading suppliers, Huawei also constantly expands the customer base of Internet companies. Tencent Cloud, the third-largest provider, accounts for 16% of the market with 55% growth. Tencent Cloud's overall growth in 2021 was robust, with diversified growth across several sectors.

The fourth provider, Baidu AI Cloud, accounted for 9% of the market, up 55%. With Baidu's operations largely focused on online marketing and artificial intelligence, government regulations affected Baidu less than Tencent and Alibaba in 2021.^[2]

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