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China’s ICT spending in 2020 set to decline by 7.6 percent

by on16 July 2020


COVID-19 pandemic bit it bad says Global Data 

China’s ICT spending for 2020 is expected to register a decline of 7.6 percent, against the estimated positive growth rate of 7.2 percent before the COVID-19 outbreak, according to beancounters at GlobalData.

While China’s domestic ICT spending had grown by eight percent in 2019, the COVID-19 outbreak will lead to a decrease in ICT spending from last year across almost all segments of the market.

An analysis of GlobalData’s Market Opportunity Forecasts reveals that spending on hardware is estimated to register a negative growth rate of 8.5 percent in 2020  as against the positive growth rate of 8.9 percent in 2019 and the projected growth of 6.8 percent before the COVID-19 outbreak.

GlobalData Technology Analyst Anshuma Singh said that China had seen a heavy fall in the sales of hardware devices across the country and decreased capital expenditure on hardware devices by enterprises will negatively impact the growth of infrastructure hardware segment this year.

The demand for software is also set to fall due to the impact of the COVID-19 pandemic, with enterprises delaying the roll-out of new applications and renewal of software licenses in 2020.

The market for enterprise social networking and collaboration platforms is set to increase by 23.7 percent for 2020 due to the growing demand for audio and video collaboration tools to provide remote working facilities

Public cloud will witness high demand in this pandemic situation, with the market expected to grow by 3.2 percent over 2019.

Small and medium enterprises are migrating to cloud-based solutions from traditional application software to operate efficiently in this pandemic situation.

Anshuma said: “In this pandemic, vendors are relying on the versatility and scalability of their cloud-based solutions to cater to the diverse enterprise requirements. This outbreak is an opportunity for cloud vendors in China to further scale-up their cloud revenues as they expand their cloud offerings to allow for the normal functioning of enterprises without any service disruptions. The impact of this pandemic on ICT spending will be high in the short and medium-term, but will diminish over the long-term.”

Last modified on 16 July 2020
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