China’s ICT spending for 2020 is expected to register a decline of 7.6%, against the estimated positive growth rate of 7.2% before the COVID-19 outbreak, says GlobalData.
While China’s domestic ICT spending had grown by 8.0% 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 model reveals that spending on hardware is estimated to register a negative growth rate of 8.5% in 2020 as against the positive growth rate of 8.9% in 2019 and the projected growth of 6.8% before the COVID-19 outbreak.
Anshuma Singh, Technology Analyst at GlobalData, comments: “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.
However, the market for enterprise social networking and collaboration platforms is set to increase by 23.7% 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% over 2019. Small and medium enterprises are migrating to cloud-based solutions from traditional application software to operate efficiently in this pandemic situation.
Among verticals, travel and leisure, transport and logistics, manufacturing and medical devices sectors’ growth will fall sharply in 2020 due to the Covid-19 outbreak.
Anshuma concludes: “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.”