IDC: The overall market size of China's digital transformation will exceed 730 billion US dollars in 2028

Zhitongcaijing · 11/07/2024 05:57

The Zhitong Finance App learned that the International Data Corporation (IDC) recently released the 2024 V2 version of the “Global Digital Transformation Spending Guide”. According to the latest IDC data, the scale of global investment in digital transformation will exceed 2.1 trillion US dollars in 2023, and is expected to reach 4.4 trillion US dollars in 2028. The compound five-year growth rate (CAGR) for 2023-2028 is 15.4%.

With the booming development of the global digital transformation market, the scope of application of technologies such as cloud computing, artificial intelligence, big data, and 5G continues to expand, and the digital transformation of global enterprises has reached a stage of continuous development, which has also prompted enterprises to continuously increase their investment in digital transformation.

Chinese market

Focusing on the Chinese market, the Chinese government has been actively promoting the development of the digital economy, and has introduced a series of policies to encourage enterprises to carry out digital transformation, such as the “Digital China Construction Overall Layout Plan” and the “14th Five-Year Plan” related to digitalization. Furthermore, the widespread application of emerging technologies such as big data and generative AI around the world is increasing the demand for digital transformation from end users in all walks of life. As a result, China's digital transformation market will continue to grow rapidly. IDC estimates that in 2028, China's digital transformation spending is expected to reach US$733 billion, accounting for about 16.7% of the world. The five-year compound growth rate is about 15.6%, which is higher than the overall global growth rate of digital transformation.

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Hardware dominates China's digital transformation spending, but software spending is growing faster

Among China's digital transformation expenses, hardware spending accounts for the largest share in the five-year forecast, and will maintain around 50% of the investment share for the next five years. Hardware will maintain a dominant trend. In particular, the rapid development of generative AI also played a driving role in China's initial hardware infrastructure spending. IDC estimates that China's digital transformation hardware market will spend more than US$370 billion in 2028. The compound growth rate for 2023-2028 is 15.6%.

In 2023-2028, China's digital transformation software market had the highest growth rate, with a five-year compound growth rate of 19.8%. IDC estimates that China's digital transformation software market will spend more than US$120 billion in 2028. Countries and enterprises are paying more and more attention to software, and SaaS software is also a general trend. As a result, software growth is higher than average market growth, and its share of digital transformation expenditure also increased from 14.1% in 2023 to 16.8% in 2028.

In the future, investment in China's digital transformation market will be further skewed towards cloud-related markets

In terms of deployment models, cloud computing is a key technology to achieve digital goals and support hybrid work models, and is one of the country's development strategies for the next few years. With the development and maturity of cloud computing technology, the strategic demand for enterprise digitalization has gradually increased, and more enterprises have begun to use cloud services to support their business operations, and strengthening digital investment in the cloud-related (Cloud-related) market has become a major trend. In 2023-2028, cloud-related market spending will increase year by year. In 2023, cloud-related market spending will account for 15.7% of total digital transformation expenditure, and in 2028, it will account for 20.0%, with a five-year compound growth rate of 21.4%.

Generative AI is growing rapidly, and its share of digital transformation spending continues to rise

Currently, the ICT industry is in an era of major AI transformation. In 2023, AI related expenses for digital transformation will account for 5.5% of total digital transformation expenses, and this ratio is expected to reach 6.18% in 2028.

In the digital transformation market, generative AI spending is growing rapidly, with a five-year compound growth rate of 32.7%. In 2023, the State Internet Information Office issued the “Interim Measures on the Management of Generative Artificial Intelligence Services”, which clearly encouraged the innovative application of generative artificial intelligence technology and promoted the accelerated implementation of generative AI technology in various industries and fields. IDC predicts that generative AI technology spending in the digital transformation market will reach US$12.7 billion in 2028, and the share of digital transformation spending will rise from 0.87% in 2023 to 1.73% in 2028.

Industries and application scenarios

From an end user's perspective, the discrete manufacturing (discrete manufacturing) and process manufacturing (Process Manufacturing) industries are still the main spenders of digital transformation, and the combined expenditure of the two accounts for more than 25%.

Automobile manufacturing is the main expenditure in the manufacturing industry, and the digital transformation process is developing rapidly. GenAI technology promotes the upgrading of vehicle networking systems to intelligent computing infrastructure, and intelligent algorithms promote more advanced autonomous driving solutions, all of which have promoted the digital transformation process of automobile manufacturing. In the manufacturing industry, robotic manufacturing (robotic manufacturing) and autonomous operations (autonomous operations) are application scenarios with high investment in digital transformation.

In addition, by using digital technologies such as the Internet and cloud-native technology to build their own business systems to enable the transformation and upgrading of traditional industries, retail enterprises will continue to increase investment in digital transformation to achieve comprehensive digital transformation. According to IDC data, the retail industry's growth rate will reach 20.7% in the next five years, and its digital transformation process will lead the development of the industry.