China’s digitalisation driving growth of Huawei’s enterprise unit

Huawei Technologies, the world’s largest telecom equipment provider, expects its enterprise business to account for a higher proportion of future group revenues as the digital transformation of the economy is embraced by the Chinese government and private companies.

The enterprise business unit, which produces network gear for corporate customers in cloud computing, big data, and smart city development, will see revenue growth “double every two years” on buoyant demand for digitalisation in China, unit president Yan Lida said in an interview in Shenzhen.

“Chinese society is adopting a liberal view towards digital technology. After the banking industry became one of the first to go digital, other industries like energy, electronics, and transport are now following suit,” said Yan. “Meanwhile, local Chinese governments are also keen on smart city developments, which have gradually shifted from utilising smart solutions to safeguard cities to [using them to] better promote economic growth.”

The demand for digitalisation in China has motivated companies like Huawei to invest in Internet of Things (IoT) solutions – where internet-linked devices embedded in everyday objects gather, send and receive data – to help governments and enterprises carry out digital transformation and reap profits.

In late March Alibaba Group Holding, China’s largest e-commerce platform and owner of the South China Morning Post, also announced a plan to build a network of 10 billion connected devices within the next five years as part of a push to expand its business in IoT. Other technology giants in China, including Baidu and Tencent Holdings, also have their own IoT platforms. Worldwide spending on IoT is forecast to reach US$772.5 billion in 2018, according to an research firm IDC.