Alibaba maintains leads in China’s hot cloud computing market as Tencent and Baidu play catch-up

Tencent Cloud ranked second with a share of 17.4 per cent and Baidu was fourth with 8.7 per cent

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Cloud computing is a fast-growing market in China. Photo: istock

Published: 7:00am, 18 Sep 2019Updated: 7:26am, 18 Sep 2019

Alibaba Group Holding maintained its lead in China’s cloud computing market in the second quarter of 2019 while Tencent Holdings and Baidu chalked up strong growth, according to a recent report released by research firm Canalys.

China’s cloud infrastructure services market grew rapidly in the second quarter of 2019, with total spending up 58 per cent year-on-year at US$2.3 billion. Alibaba remains the clear leader, with a 43 per cent market share. Tencent Cloud ranked second with a share of 17.4 per cent and Baidu was fourth with 8.7 per cent, although both firms showed strong growth.

“Competition in China has intensified, mainly due to local cloud service providers, including Alibaba Cloud, Tencent Cloud and Baidu Cloud,” said Daniel Liu, a research analyst at Canalys, last week. “Boosting revenue from cloud services is a top strategic priority for these companies amid growing domestic demand.”

Alibaba’s cloud computing business saw revenue grow 66 per cent to 7.8 billion yuan (US$1.1 billion) last quarter, primarily driven by an increase in average revenue per customer.

Tencent’s founder and chief executive, Pony Ma Huateng, said in May that the internet giant not only expects its cloud business to contribute to revenue but also serve as the platform connecting the consumer internet with the industrial internet.

Earlier this year Tencent said it wanted to enable greater connectivity across Chinese industry, leveraging the capabilities and expertise it has built up serving consumers. Meanwhile, Baidu is developing an AI could computing centre in north China to help build more smart cities, according to Xinhua.