The cloud infrastructure services market is China increased 45 percent to $27.4 billion in 2021, according to the latest Canalys research report.
China’s cloud infrastructure market rose 33 percent in Q4 2021 to $7.7 billion – driven by growth drivers such as remote working and learning, ecommerce and content streaming remained important contributors.
Alibaba, Huawei, Tencent and Baidu are the leaders in China’s cloud infrastructure market, said the report.
Canalys forecasts the cloud infrastructure market in China to reach $85 billion by 2026, representing a five-year CAGR of 25 percent.
The market is witnessing a diversification trend in its client base, ranging from the Internet industry to traditional industries such as manufacturing, finance and retail.
“Enterprise investment in digital transformation has created a massive opportunity for cloud service providers,” said Canalys Research Analyst Blake Murray. “But these efforts are multi-year, highly complex projects, which require cloud vendors to provide technical capabilities and professional experience”
Alibaba Cloud led the cloud infrastructure services market in 2021, accounting for 37 percent of spend. Alibaba’s drop in market share in 2021 is mainly attributed to policy regulation which impacted it by slowing the growth of Internet-based customers.
Alibaba’s Cloud business grew 30 percent, driven by long-term consumption commitments from key clients and expansion of its business in traditional industries.
Huawei Cloud reached an 18 percent market share in 2021, growing 67 percent. The rapid growth has widened the gap between Huawei Cloud and Tencent Cloud and secured the second position in the market.
Tencent Cloud, the third largest provider, accounted for 16 percent of the market, growing 55 percent. Tencent Cloud’s overall growth in 2021 was steady, with diversified growth across multiple sectors. Tencent Cloud has also started to expand its customers to include more traditional sectors.
Baidu AI Cloud, accounted for 9 percent of the market, growing 55 percent. Due to its business mainly focused on online marketing and AI, Baidu was impacted less than Tencent and Alibaba by government regulations over the last year.