The fourth quarter of 2021 saw a year-on-year increase of 33% to US$7.7 billion. Canalys predicts that by 2026, the scale of the cloud infrastructure market in the mainland will reach US$85 billion, and the five-year compound annual growth rate will be 25%.

Visit here for AI Cloud market share.

Alibaba Cloud remains the leader with a 37% market share, ranking first in the cloud market in 2021, Huawei Cloud and Tencent Cloud second and third respectively, and Baidu AI cloud fourth. In 2021, the four cloud providers jointly accounted for 80% of the market share.

Huawei Cloud reached an 18% market share in 2021, with an annual growth of 67%. The rapid growth has widened the gap between Huawei cloud and Tencent Cloud, ranking second in the market.

Tencent cloud, the third-largest provider, accounted for 16% of the market share, an increase of 55%. Tencent Cloud grew steadily as a whole in 2021, with diversified growth in multiple sectors.

Baidu AI Cloud, the fourth-largest vendor, accounted for 9% of the market share, an increase of 55%.

Top 10 forecasts for China cloud computing market 2021-2024

China’s Public Cloud Services Market to Grow to 10.5% of global share by 2024

In 2020, the overall market size of global public cloud services (IAAs/PAAS/SaaS) reached US$312.42 billion, with a year-on-year growth of 24.1%, according to IDC.

The overall market size of China’s public cloud services reached US$19.38 billion, with a year-on-year growth of 49.7%, with the highest growth rate in all regions of the world. IDC predicts that the global share of China’s public cloud service market will increase from 6.5% in 2020 to more than 10.5% by 2024.

Check out market share of IaaS and PaaS markets in China here.

CIW Subscribers (Annual) can download the chart here to see the comparison of the cloud platforms in China.

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The purchaser is Science City (Guangzhou) Investment Group Co., Ltd., with a project valued of nearly 460 million yuan, which has become the largest bidding project order in the field of intelligent transportation in China this year.

The order includes the construction of vehicle road network infrastructure, intelligent intersection, Internet of vehicles, and other related application systems, which is expected to accelerate the construction of Guangzhou Development Zone and Guangdong Hong Kong Macao Bay Area Intelligent Network.

Baidu Performance in Q2 2020

Baidu App daily active users (“DAUs”) reached 204 million in June 2020, adding 16 million users in the last 12 months but 18 million less from March 2020, according to its financial results.

Over 800 sessions of topical live streaming were broadcasted in the second quarter of 2020 on Baidu’s platform, with sessions like Baidu Wiki Virtual Zoo, Summer Art Festival, and Wandering through Civilization Season 2, attracting over 40 million views.

Baijiahao (“BJH”) publisher accounts reached 3.4 million, up 52% year over year, in June 2020. The large scale of Baidu’s platform is drawing more original content creators to join BJH, which allows easy sharing of content across Baidu App, short-video app Haokan, Quanmin, and Baidu’s knowledge products.

Baidu Smart Mini Program’s monthly active users on Baidu App reaching 339 million, up 25% year over year or down over 4% from March 2020.

Revenue from Baidu Managed Page increased to approximately 30% of Baidu Core’s online marketing services revenue in the second quarter of 2020. Merchants with HTML5 websites across many industries are switching to Managed Page, as the landing page for their search results.

Baidu’s new AI businesses, including cloud, smart devices, and smart transportation, saw double-digit growth in the second quarter and stand to become an important revenue driver in the years to come.

Baidu is also diversifying its revenue streams through membership, online games, and others to increase the ARPU of the existing traffic according to Herman Yu, CFO of Baidu. The growth of Baidu App and new AI businesses have enabled Baidu Core’s adjusted EBITDA margin to reach 41% in the second quarter.

Baidu returned US$540 million to shareholders under the 2020 Share Repurchase Program in the second quarter, bringing the Company’s cumulative repurchase for the last two years to approximately US$1.9 billion.

Baidu’s board of directors recently approved a change to the 2020 Share Repurchase Program, increasing the repurchase authorization from US$1 billion to US$3 billion, which is effective through December 31, 2022.

DuerOS

In June 2020, Baidu’s DuerOS monthly voice queries on Xiaodu devices (its smart speakers) reached 2.8 billion, nearly doubling from last year, and DuerOS total monthly voice queries reached 5.8 billion, up 57% from last year.

DuerOS skills store now offers 4,000 skills in wide-ranging genres, including education, video, online game, and live streaming. DuerOS developer community has grown to over 42,000 members.

JD.com announced that Xiaodu series of smart displays and smart speakers were the best-selling in the smart speaker category on its platform during this year’s June 18 Shopping Festival.

Cloud, AI Services & AI Platform.

Baidu formed a strategic partnership with China National Building Materials Group (CNBM Group), the parent of 13 listed companies.

CNBM Group plans to use Baidu AI PaaS, equipped with big data and IoT edge computing capabilities, to provide intelligent logistics, intelligent factory and industrial autonomous driving.

For example, CNBM Group plans to use Baidu AI PaaS paired with Baidu intelligent map to improve the routing efficiency of its logistics vehicles and track the vehicles whereabouts to optimize operational costs and increase traffic safety.

Baidu’s AI open platform, built on top of Baidu Cloud, offers over 260 AI capabilities, which are tapped by over 2.1 million developers.

Apollo

The Apollo robotaxi operations in Beijing, Changsha and Cangzhou have expanded into larger networks and more complex road conditions, such as downtown streets.

In May 2020, Baidu completed the 145,000 square feet Apollo Park in Beijing, an autonomous driving and V2X testing facility that supports testing, operational command center, cloud control system, vehicle warehousing, maintenance, and calibration.

iQIYI

One of the top online video platforms iQIYI’s subscribers reached 104.9 million, up 4% year over year, in June 2020, and membership revenue was up 19% year over year.

Financial Results

Total revenues reached RMB 26.0 billion ($3.69 billion), decreasing 1% year over year.

• Online marketing revenues were RMB 17.7 billion ($2.50 billion), decreasing 8% year over year.
• Other revenues were RMB 8.3 billion ($1.18 billion), increasing 18% year over year, driven by the strong growth of iQIYI membership and Baidu’s cloud and smart transportation solutions.
  • Revenue from iQIYI reached RMB 7.4 billion ($1.05 billion), up 4% year over year.

Its share price fell more than 6% in the extended session Thursday.

Revenue from Baidu Core reached RMB 18.9 billion ($2.68 billion), decreasing 3% year over year.  iQIYI membership revenue grew 19% year over year, partially offset by online advertising revenue declining 28% year over year.

Cost of revenues was RMB 13.1 billion ($1.86 billion), decreasing 19% year over year, primarily due to a decrease in traffic acquisition costs, sales tax and surcharges, and costs of goods sold. The decrease in traffic acquisition costs reflected decreasing union revenues, as Baidu focused on optimizing profitability over revenue growth.

Selling, general and administrative expenses were RMB 4.4 billion ($625 million), decreasing 16% year over year, primarily due to decreased marketing spending and personnel-related expenses.

Research and development expenses were RMB 4.8 billion ($685 million), increasing 2% year over year.

Operating income was RMB 3.6 billion ($516 million) and operating margin was 14%. Baidu Core operating income was RMB 5.0 billion ($703 million) and Baidu Core operating margin was 26%.

Non-GAAP operating income was RMB 5.6 billion ($793 million), and non-GAAP operating margin was 22%. Non-GAAP Baidu Core operating income was RMB 6.5 billion ($917 million), and non-GAAP Baidu Core operating margin was 34%.

Total other income was RMB 366 million ($53 million), decreasing 70% year over year, primarily due to loss from equity method investments, which is booked a quarter in arrears and reflects the impact of COVID-19 on its investees.

Income tax expense was RMB 1.2 billion ($174 million), which included tax withholding accrual for dividend distribution to offshore entities, compared to RMB 416 million in Q2 2019.

Net income attributable to Baidu was RMB 3.6 billion ($507 million), and diluted earnings per ADS was RMB 10.31 ($1.46). Net income attributable to Baidu Core was RMB 4.4 billion ($626 million).

Non-GAAP net income attributable to Baidu was RMB 5.1 billion ($719 million), and non-GAAP net margin was 20%. Non-GAAP diluted earnings per ADS amounted to RMB 14.73 ($ 2.08). Non-GAAP net income attributable to Baidu Core was RMB 5.7 billion ($801 million), and non-GAAP net margin for Baidu Core was 30%.

Adjusted EBITDA was RMB 7.0 billion ($993 million) and adjusted EBITDA margin was 27%. Adjusted EBITDA for Baidu Core was RMB 7.8 billion ($1.1 billion) and the adjusted EBITDA margin for Baidu Core was 41%.

As of June 30, 2020, cash, cash equivalents, restricted cash, and short-term investments were RMB 154.1 billion ($21.80 billion), and cash, cash equivalents, restricted cash and short-term investments excluding iQIYI were RMB 144.6 billion ($20.46 billion).

Free cash flow was RMB 7.3 billion ($1.04 billion). Free cash flow excluding iQIYI was RMB 8.8 billion ($1.24 billion).

Baidu may spin off its online storage business

Baidu recently plans to split multiple internal businesses, which may be listed independently, according to Business Data.

Baidu declined to comment on the news.

If spun off, Baidu online storage business can benchmark the US cloud storage company Dropbox for its valuation. The market value of Dropbox has exceeded $9.016 billion at the intraday price on July 28.

After 360 Cloud disk, Kingsoft Online Disk, Xunlei Express Disk, Netease Cloud Disk, and other similar products stopped services, Baidu Online Disk, launched in February 2012, continues its service with a large storage capacity of 100G and clean interface.

According to 36Kr, in November 2019, the number of MAU (monthly active users) in China’s personal online storage industry was 107 million, with a penetration rate of 22.1% for mobile Internet users nationwide. Baidu Online Disk market share is 82.9%, followed by Tencent Weiyun, about 8% market share.

Questmobile’s data show Baidu Online Disk has a market share of over 85% with 600 registered users and over 100 million MAU. It currently generates revenues from users, advertising, information, mini programs, and etc.

Baidu starts offering Microsoft’s MSN ad inventory on a new ad platform

Baidu announced on 8 July 2020 that it is providing advertisers direct access to Microsoft’s MSN native desktop inventory via Baidu’s MediaGo advertising platform. The agreement enables advertisers around the world to reach consumers in the United States through premium placements on multiple MSN properties.

Rather than requiring advertisers to purchase bulk inventory, as is standard practice for many digital ad companies, this collaboration allows advertisers to secure the placements that fit their goals and budget on MSN’s desktop site.

As part of Baidu’s ongoing effort to bridge the gap between Eastern and Western markets, Baidu works with Microsoft to offer their premium MSN placements to its advertising partners in China, the U.S. and beyond. It will continue to explore meaningful ways to provide mutual growth opportunities to global advertisers and U.S. media.

The cooperation allows advertisers worldwide to access high-visibility, native placements on the MSN homepage, as well as other sister pages throughout the MSN site, via Baidu’s MediaGo ad platform.

With MediaGo, advertisers can upload assets, select placements on top-tier MSN properties and measure campaign success on a single centralized platform. MediaGo also offers 24/7 local language account management services.

“Baidu’s MediaGo platform streamlines the process for global advertisers to purchase high-visibility ad placements on MSN, helping them reach new customers,” said David Carkeek, Principal PM Lead at Microsoft.

Baidu International launched MediaGo overseas advertising platform last year when it had established cooperation with Snapchat, Reddit, Pinterest, etc., which will provide a very good channel for China’s domestic small and medium-sized enterprise owners to promote overseas.

Mobile reach in Q1 2020: Tencent, Alibaba, Baidu, ByteDance

Interbrand recently released their 2016 ranking of the Global Top Brands; Apple ranks first with $178,119 million brand value, followed by Google, Coca Cola, Microsoft, and Toyota.

Technology is, not surprisingly, the most dominant sector, with four brands in Top 10: Apple, Google, Microsoft, Samsung. It also features some of the Top Growing Brands, with Facebook (+48%) as the Top Growing Brand in 2016, followed by Adobe (21%), Huawei (18%), Samsung (14%) and SAP (+13%), and number 2 ranked Google at (+11%).

Sogou, one of the top three search engines in China after Baidu and Qihoo 360, announced their cooperation with Microsoft Bing with the launch of two new products: Sogou English Search and Sogou Scholar Search.

While conducting academic research online, a lot of Chinese are more inclined to use Google search which for the reasons we all know can not be easily accessed. The new vertical search products from Sogou specifically target this segment of users, who have higher education and income levels.

Sogou English Search users can also type in Chinese to search for English content.

Also read: Baidu Mobile Search Users Reached 663 Mn in March 2016

On July 29 2015, Windows 10 operating system was launched in China, which caused a stir among Chinese users. On the first day of the release, Microsoft had announced the adoption within 24 hours was 14 million copies in China. On the third day, Windows 10 OS had been installed on over 67 million computers in China.

According to Statcounter, in July 28, before the official release of Windows 10, Windows 7 remained as the dominant operation systems in China (60.84%), followed by Windows XP (25.05%) and Windows 8.1 (7.68%); and Mac OS X also enjoyed 1.37% of the share before Win10 (0.37%, the preview version).

However, by July 31, less than 48 hours after the release of Windows 10, the Chinese subscribers had been more than that of Mac OS X. The retail edition of Windows 10 Home was officially priced at 888 yuan (US$138.71), Windows 10 Professional 1799 yuan (US$281.02).

Also read: China E-Payment Insights 2015

According to ZenithOptimedia’s new report Top Thirty Global Media Owners 2015, Baidu is now the fourteenth-largest media owner in the world growing 43% YoY. In the Top 30 list, Google ranked on top, followed by Walt Disney and Comcast.

Baidu and Sohu ranked the second and fourth respectively in the world’s top 5 biggest search engines by revenue in 2014.

Related: China Top 10 Online Advertising Media in 2014

CCTV, China’s national state television company, accounts for about a quarter of China’s television ad market ranking the 20th largest media owner.

Mobile: Almost 1/3 of Online Video Ad Revenue in China in Q1 2015

According to a Microsoft recent blog post, China is generating the second highest number of downloads on Windows Phone from Windows Store.

Sina tech news released on December 18 2013, that Amazon Web Service (AWS) achieved strategic cooperation with cloud valley belonged to China Broadband Capital (CBC). AWS finally was ready to launch AWS in Chinese market.

It’s very likely that AWS and CBC would build data base in Ningxia province and locate operating center in Beijing. The specific cooperation between AWS and CBC was still unclear, but it might refer to Microsoft’s Windows Azure model.

On November 1 2012, Microsoft agreed with 21Vianet Group, a carrier-neutral internet data center services provider in China to launch Microsoft Enterprise Cloud Services Office 365 and Windows Azure in China. Microsoft offered technology support, and 21Vianet Group operated these two cloud services in China. Microsoft successfully avoided telecom value-added services license issues.

Word had been spreading that AWS to enter Chinese market so many times. The most recent rumor was in the beginning of 2013, actually, Amazon did made several preparations for entering Chinese market. Amazon launched Chinese website by the end of 2012 and began recruiting Chinese staff. Seemingly, Amazon was about to enter Chinese market very soon, but then the cooperation negotiation was dominated by Amazon American company and it didn’t end well.

Amazon chose CBC this time probably because the latter’s success in helping Evernote enter Chinese market. AWS had developed over 10 years, in 2001, Amazon global began offering web technology support and operation for offline retailers which was the predecessor of AWS. In 2002, Amazon offered AWS paid services to third parties. Now, AWS was one of the fastest growing business of Amazon, Evercore Partners analysts predicted that Amazon’s market value would surpass USD 50 billion in 2015.

AWS was invincible in the U.S. market, but it faced fierce competition in Chinese market with Alibaba Cloud Computing, Baidu Cloud Storage, Sina Cloud and Ucloud. Ucloud CEO told media that AWS entering Chinese market would be a good thing for Chinese cloud services companies, because of its high-profile in cloud services could help developing Chinese market.

AWS still faced localized operation difficulties, Ucloud CEO said that if AWS want to win Chinese market, they need to focus on product development, technology support and sales. Kaifu Lee once told media in May 2013, that the era of global enterprises operating their businesses in China through its subsidiary coporations had failed, AWS could only had the chance to compete in Chinese market by authorizing its technology to a single Chinese company.

Shen Xiangyang, Microsoft’s Senior Vice President, Director of Search Engine, disclosed Bing Search’s strategy in China recently.

He said, in order to acquire the 5% high value English search queries, Bing will implement differential competitive strategy in the short run. The core is to provide users with better English search services, including translation and online dictionary.

Though mobile searches still have some limitations compared with that on PC, no one will ignore the potential of it considering the high growth of mobile internet’s development. Shen also points out that Microsoft regard mobile search as the key point for Bing to hit the search market.

Currently, Bing Chinese Search launches a new version, adding some functions like dynamic home page. As for the wireless field, it supplies Window phone with some services like one-touch search.

Instead of giving comments for the 3B War between Baidu and 360, Shen shared Bing’s development in China and the U.S. “In America, Bing has deep cooperation with leading SNS platforms, Facebook and Twitter. Users can directly use Bing once log in on Facebook. Bing is the only search engine cooperated with Twitter.”