China’s Cloud market achieves 20% growth in Q1 2024

Spending on cloud infrastructure services in China surged by 20 percent in the first quarter of 2024, reaching $9.2 billion, according to Canalys estimates.

China cloud infrastructure market Q1 2024 Canalys report

The Cloud Infrastructure market in China continues to be dominated by Alibaba Cloud, Huawei Cloud, and Tencent Cloud, which collectively grew by 22 percent and captured 72 percent of the total market share, although this represents a 2 percent decline from the previous quarter.

Cloud services offered by telecommunications companies, led by China Telecom, are increasing their market share.

Investments in cloud infrastructure to support AI applications and significant price reductions by top cloud providers have driven customer spending on cloud services. The Chinese cloud market is entering a phase of intense price competition, with leading vendors leveraging aggressive pricing strategies to attract customers and drive business growth.

In April 2024, Alibaba Cloud announced price reductions for its core products worldwide, followed by further cuts for its AI foundation model in May 2024.

Tencent Cloud also announced significant price reductions for its foundation models in May.

Canalys Analyst Yi Zhang, in the report, highlighted the importance of fostering robust partner ecosystems to maintain profitability and enhance market differentiation in an intensely competitive environment.

During the first quarter of 2024, cloud revenue generated through partners accounted for 26 percent of the total Chinese market, a share that is expected to increase further.

Huawei Cloud and Tencent Cloud introduced AI-focused partner programs to drive AI adoption and accelerate time to market.

Alibaba Cloud maintained its leading position in the Chinese cloud market in Q1 2024 with a 37 percent market share.

Alibaba Cloud shifted its focus to public cloud adoption, aiming to limit customized projects and focus on scalable opportunities.

In April 2024, Alibaba Cloud announced substantial price cuts for its core products in 13 global regions, with an average decrease of 23 percent. In May 2024, the company further reduced prices, offering its foundational model Tongyi Qianwen Qwen1.5-32B for free for a limited time to attract more customers.

Alibaba Cloud revealed plans to establish new data centers in South Korea, Malaysia, the Philippines, Thailand, and Mexico to accelerate global expansion.

Huawei Cloud retained its position as the second-largest cloud vendor in Mainland China in Q1 2024 with a 19 percent market share.

Huawei Cloud strengthened its partner ecosystem by hosting the APAC Partner Connection Summit in April 2024, launching the Huawei Cloud AI Services APAC Partner Ecosystem. Huawei Cloud also committed to providing additional incentives to support partners in enhancing their professional services and sales capabilities, focusing on AI products and solutions.

Tencent Cloud held a 16 percent market share and ranked third in Q1 2024. In May 2024, Tencent Cloud introduced three categories of large model tools — Knowledge Engine, Image, and Video — designed to facilitate enterprise AI application development.

Tencent Cloud also launched the Generative AI Ecosystem Plan, partnering with 17 companies to expand the application scenarios of its AI foundational models. Following Alibaba Cloud’s lead, Tencent Cloud announced significant price cuts to its foundational models in May, with reductions of up to 70 percent.

Baburajan Kizhakedath

Related News

Latest News

Latest News