Enterprise ICT revenue in China to hit $179bn by 2026https://securityitsummit.co.uk/wp-content/uploads/2022/11/china-city-5156636_1280.jpg 960 640 Stuart O'Brien Stuart O'Brien https://secure.gravatar.com/avatar/81af0597d5c9bfe2231f1397b411745a?s=96&d=mm&r=g
The enterprise ICT revenue opportunity in China is expected to increase at a compound annual growth rate (CAGR) of 8.5% between 2021 and 2026.
The ongoing government initiatives prioritizing industrial digitalization and acceleration of digital transformation activities across large enterprises and SMEs provide a promising ground for the ICT market growth in the country, forecasts GlobalData, a leading data and analytics company.
GlobalData’s research on “China enterprise ICT market” reveals that the digitalization of national governance systems and government capabilities along with the expansion of 5G infrastructure and extensive use of digital applications such as e-commerce and digital payments will drive the demand for ICT services and products in the country over the forecast period.
Pragyan Tarasia, Technology Analyst at GlobalData, said: “While the country’s economy is largely concentrated around manufacturing, the government’s push to create a diverse digital economy as one of the key objectives under its 14th five-year plan (2021-2025) and Vision 2035 is significantly driving the demand for various ICT products and services in China.”
IT software segment to be the fastest growing enterprise ICT market
GlobalData forecasts IT software to be the fastest growing enterprise ICT segment at 10% CAGR and reach $171.9 billion in 2026.
Tarasia continued: “Increasing adoption of process automation and application-based service delivery model among enterprises in China to support digitalization as it transitions from manufacturing to service-based economy will drive the revenue prospects for the software segment.
“Furthermore, Chinese tech giants such as Huawei, ZTE, Xiaomi, and Haier that are specialized in hardware or telecommunication equipment also have a strong presence in the software segment. The presence of other key domestic IT players such as Alibaba, Tencent, and Baidu has also significantly increased the innovation capability of China’s IT software segment.”
Manufacturing the largest end-use vertical
GlobalData forecasts manufacturing sector to account for 14.2% share in the overall cumulative ICT market revenue in China over the forecast period. ICT revenue from the manufacturing sector is forecast to grow at a CAGR of 8.3% to reach $104.5 billion in 2026.
Tarasia added: “The use of Industry 4.0 concepts is a linchpin in making the manufacturing sector a key market for ICT. While China boasts companies like Xiaomi in smart hardware and Beijing Automotive Group in automotive, it also hosts factories and production units for several international industrial conglomerates. The five-year plan for smart manufacturing to support large manufacturers achieve digitalization by 2025 will boost intelligent manufacturing in the country.
“Recent sanctions from developed nations may stifle China’s future industry growth by some extent. For instance, the US Commerce Department has prohibited supplying high-tech equipment to chipmakers in China. This type of sanctions will have a negative impact on China’s growth rate in chip technology.”