Cloud Service Expenditure in Mainland China Is Expected to Increase By 18% In 2024

From finance to manufacturing, a cloud revolution is sweeping across industries. Cloud services are being adopted at an accelerated pace, with China's cloud infrastructure market projected to grow by 18% in 2024 alone (Canalys). This rapid shift is driven by businesses seeking to leverage the cloud's potential to optimize operations, fuel innovation, and adapt to the ever-changing digital landscape. 

The rise of remote work arrangements has further emphasized the critical role of cloud-based solutions. They enable seamless collaboration, communication, and access to essential data and applications from any location. 

Chinese cloud manufacturers have been lowering prices one after another to accommodate price-conscious consumers, accelerating market competition. To stand out in the constantly escalating price war, cloud vendors are focusing on improving service standards, promoting technological innovation, and enhancing the overall cloud service ecosystem. 

In the fourth quarter of 2023, the three leading companies in China's cloud service market - Alibaba Cloud, Huawei Cloud, and Tencent Cloud - continued to maintain their dominant position, achieving a combined growth of 28% and occupying a market share of 74%. 

Since the beginning of 2024, both Huawei Cloud and Tencent Cloud have held partner summits, and the three companies have increasingly focused on developing partner ecosystems to rapidly expand their business, accounting for 25% of the total revenue in the Chinese market. This proportion is expected to continue rising in the coming years. 

Huawei Cloud continues to maintain its position as the second-largest cloud manufacturer in Chinese Mainland, with a market share of 19%. In the fourth quarter of 2023, Huawei Cloud achieved a year-on-year growth rate of 23%. Throughout 2023, Huawei Cloud's revenue increased by 17%, demonstrating stable performance in each quarter and narrowing the gap with its competitor Alibaba Cloud. In 2024, Huawei Cloud will promote two plans: cloud distributor and cloud solution provider, while continuously expanding through new customer incentives and annual growth incentives. 

Leading cloud service providers are well-positioned to capitalize on this growing demand. They are expanding their offerings, enhancing their capabilities, and investing in cutting-edge technologies to stay ahead of the curve. 

Furthermore, initiatives by the Chinese government to promote digital transformation and foster the development of the cloud computing industry are expected to significantly accelerate market growth. 

As enterprise customers gradually step out of the IT optimization stage, they will restart their investment in cloud services, and the rise of generative AI will further drive the growth of cloud consumption.