Slower economic growth will become China’s “new normal.” To combat this, the Chinese government is launching a series of initiatives to drive tech market growth in 2015, including economic stimuli across industries, starting an Internet Plus project, and creating new free-trade zones. My latest report, China Tech Market Outlook: 2015, provides the drivers behind Forrester’s forecast that China’s tech market will reach $136 billion in 2015 — representing year-over-year growth of 9% in US dollars. What’s more, China’s share of total Asia Pacific tech spending is still growing; it increased to 25% in 2014 and will rise further to 27% in 2015.
Key tech market trends in China in 2015 include:
- Purchases of computer equipment will remain the largest segment of China’s tech spending. The massive increase in the number of mobile consumers in recent months has led to an explosion in demand for digital content and personal cloud services. Online content and platform providers are investing heavily in cloud infrastructure to efficiently respond to this rising demand.
- Communications equipment spending growth will be flat.The country’s three major telcos all started building nationwide 4G base stations in 2014. This momentum will continue in 2015, even though the growth in volume will be offset by the falling prices of communications hardware as technologies and markets mature.
- The software segment will grow quickly. Chinese organizations will continue to prioritize virtualization and consolidation to drive efficiency and automation of virtualized resources.The explosive growth in eCommerce will drive investments in B2C and B2B commerce platforms, mobile commerce solutions, and mobile point-of-service technology.
- Tech consulting and outsourcing show the strongest growth, but from a small base.Chinese organizations will make use of specific tech consulting services with a focus on architecture skills, program management, and agile development for front-end systems.
My report provides more details to analyze the key tech spending trends and factors that will have an impact on tech purchases in China in 2015 and guidance on how CIOs in China need to react to these macro trends.