Spending on cloud infrastructure services in mainland China grew 11% year-over-year in the second quarter of 2022, reaching $7.3 billion and accounting for 12% of overall global cloud spending, Canalys reports.
In contrast, Chinese market growth slowed significantly, falling below 20% for the first time from the strong growth momentum of 33% seen in the global cloud services market thanks to the resurgence of COVID-19 in China.
Canalys expects China’s cloud market to regain momentum in the second half of the year as business activity picks up in first-tier cities in June.
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“Chinese cloud services have entered a new era where cloud providers are no longer just focused on revenue scale and business growth, but more on standardized high-margin products,” the company said. analyst Yi Zhang.
Alibaba Group Holding Limited BABA Cloud, Huawei Technologies Co,Ltd Cloud, Tencent Holding Ltd. TCEHY Cloud, and Baidu, Inc. BIDU AI Cloud maintained its leading position in the Chinese cloud market.
The top four vendors accounted for 79% of total spending in China, despite a decline in their growth rate from previous quarters.
Alibaba Cloud remains the market leader for cloud services in China. It increased by 10% to represent 34% in Q2. I
Its market share saw a significant decline of around 2% compared to the previous quarter due to difficulties in acquiring customers in the public sector.
Alibaba Cloud continued to do well with its overseas expansion plans this quarter, launching four data centers in three countries, namely Germany, Thailand and Saudi Arabia.
Huawei Cloud accounted for 19% of the market after an annual growth of 11% and was the second largest cloud service provider in the second quarter.
Tencent Cloud accounted for 17% of China’s cloud market in the second quarter.
Baidu AI Cloud was fourth, taking 9% of the market and growing 25% year-on-year.
Alibaba CEO Daniel Zhang said the cloud computing business achieved full profitability for the first time in the last fiscal year with more than 4 million paying customers.
“For cloud, we expect BABA to be well positioned to seize market opportunities over the next few years,” Jefferies said.
Price action: Shares of BABA traded up 2.56% at $91.81 when last checked on Friday.
Photo by Fooksou Lamimo via Wikimedia Commons