Canalys published its annual cloud services market share report for China on Monday. Overall, 2021 was a strong year in the mainland of China, with the cloud infrastructure services market growing 45% to a total of $27.4 billion. The year was closed out by a healthy 33% year-on-year growth in Q4 2021, which reached $7.7 billion.
Alibaba Cloud maintained its lead and was the number one player in the cloud market for 2021, with Huawei Cloud in second, Tencent Cloud third, and Baidu AI Cloud fourth. Together the top four cloud vendors accounted for 80% of the market in 2021.
Alibaba Cloud led the cloud infrastructure services market in 2021, accounting for 37% of total spending. Alibaba‘s slight decrease in market share in 2021 was attributed to policy regulation which slowed the overall growth of Internet-based customers. The company also recently launched a strategy called ‘DingTalk with Cloud’. DingTalk, a communication and collaboration platform for enterprises, will serve as an entry point for cloud services into traditional industry sectors.
Huawei Cloud managed to capture an 18% market share in 2021, growing by 67%. With specialty industry experience in government affairs, Huawei Cloud has consistently maintained a leading position in this segment.
Tencent Cloud, the third largest provider, accounted for 16% of the market, growing 55%. As a pan-entertainment industry-focused Internet company, Tencent Cloud has also started to expand its customer base to include more traditional sectors. For example, it has won over key users in the government sector through its strength in big data solutions.
The fourth provider, Baidu AI Cloud, accounted for 9% of the market, also growing 55%. Due to its business mainly focusing on online marketing and AI, Baidu was impacted less than Tencent and Alibaba by government regulations over the last year. Compared to the other three cloud vendors, Baidu AI Cloud has chosen the industrial segment as its main target, with key wins in industrial internet, smart manufacturing, energy, and power utilities.
Pandemic-related consumption drivers that have continued to develop, such as remote working and learning, e-commerce and content streaming, have remained important contributors to the market. In addition, the boom in the digital transformation strategy execution by traditional enterprises has also increased the demand for these cloud services.
Canalys expects the cloud infrastructure market in mainland China to reach $85 billion by 2026, representing a five-year CAGR of 25%.