Tencent, Baidu gain ground on Alibaba as China’s cloud market expands at rapid pace

Chinese tech giants Tencent Holdings and Baidu are gaining ground in China’s fast growing cloud infrastructure market although Alibaba Group Holding still leads the sector by a wide margin.

Tencent Cloud’s share in the country, the second biggest cloud market in the world, grew to 18 per cent in the fourth quarter of 2019, behind Alibaba which accounted for 46.6 per cent of the total spend as the biggest cloud service provider in China, according to a Canalys report last week. Alibaba is the parent company of the South China Morning Post.

Tencent is gradually catching up with the leading player. In the first quarter of last year Alibaba and Tencent accounted for 47.3 per cent and 15.4 per cent of the market respectively, a report by Canalys in June showed.

Baidu’s AI Cloud moved into third place with an 8.8 per cent share in the fourth quarter, up from 8 per cent and fourth place in the first quarter of 2019, behind Alibaba, Tencent and Amazon.

China’s cloud infrastructure market grew 66.9 per cent to US$3.3 billion in the fourth quarter of last year, which accounted for a 10.8 per cent share of the global total. For the full year, China’s spending on cloud infrastructure services increased 63.7 per cent to US$10.7 billion.

The cloud market in China is expected to receive a boost this year after major players rushed to offer cloud capability to keep the country operational during the coronavirus outbreak, helping to move government, business and educational services online.