IT Outsourcing - China

China

Revenue in the IT Outsourcing market is projected to reach US$29.03bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 9.31%, resulting in a market volume of US$45.31bn by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$36.88 in 2024.
In global comparison, most revenue will be generated in the United States (US$197.30bn in 2024).

Key regions: Netherlands, United States, Japan, Germany, Italy

Definition:
The IT Outsourcing market refers to the external contracting of IT functions, services, or projects instead of relying on company-owned resources. By outsourcing IT tasks (e.g., to IT suppliers or software developers), enterprises are able to focus on their core functions and save internal resources and costs (e.g., office space, maintenance, and utilities). Thus, outsourcing teams becomes a viable cost resilience strategy in an environment where companies are looking to save money more than ever.

In an IT context, these activities include IT administration, IT application, and web hosting services. Non-IT-related outsourcing services are excluded.

Structure:

IT Outsourcing contains four distinct markets that are based on different services:

Administration Outsourcing refers to the market for services associated with the external sourcing of typical IT administration tasks such as hardware supply, setup, configuration, maintenance, security, and support.
Application Outsourcing refers to the market for all IT application services in a software production context, spanning from requirement assessments to concept and design of software applications.
Web Hosting includes all types of internet hosting services that allow companies or individuals to provide access to their web page via the World Wide Web.
Other IT Outsourcing refers to aggregated revenues of the types of IT outsourcing that are not specifically mentioned in the other IT Outsourcing markets, such as infrastructure outsourcing, network outsourcing, and managed services.

Additional Information:

The IT Outsourcing market comprises revenues, revenue change, average spend per employee, and revenues of the outsourcing types. Market values represent revenues that are generated by primary vendors either directly or through distribution channels at the manufacturer price level (excluding VAT). Reported market revenues include spending by enterprises (B2B) and governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed. Key players in the market include IBM, Accenture, Capgemini, NTT, and Hewlett Packard Enterprise.

For more information on the data displayed, use the info button right next to the boxes.

Market

Region

Region comparison

Currency

Analyst Opinion

China, known for its manufacturing prowess, has also established itself as a major player in the IT outsourcing market.

Customer preferences: Chinese IT outsourcing clients are increasingly seeking high-value services, such as cloud computing, big data analytics, and artificial intelligence. With the rise of digital transformation, companies are looking to outsource IT services to improve operational efficiency, reduce costs, and enhance customer experience. Additionally, Chinese companies are looking to expand their global presence, and outsourcing IT services can help them achieve that goal.

Trends in the market: One of the major trends in the Chinese IT outsourcing market is the shift towards domestic outsourcing. Previously, Chinese companies outsourced IT services to foreign companies, but now they are increasingly outsourcing to domestic providers. This is due to the Chinese government's push for self-sufficiency in technology, as well as the growing capabilities of local IT service providers.Another trend is the rise of niche IT outsourcing providers. As Chinese companies seek more specialized services, niche providers are emerging to meet their needs. These providers focus on specific industries or technologies, such as healthcare or blockchain, and offer tailored services to their clients.

Local special circumstances: China's IT outsourcing market is unique in that it is heavily influenced by the government's policies and regulations. The Chinese government has been pushing for self-sufficiency in technology, and as a result, it has implemented policies that favor domestic IT service providers. Additionally, the government has strict regulations on data privacy and security, which can make it challenging for foreign IT service providers to operate in China.

Underlying macroeconomic factors: China's economy has been growing rapidly in recent years, and this growth has fueled the demand for IT outsourcing services. As Chinese companies expand their global presence, they need to outsource IT services to remain competitive. Additionally, the rise of digital transformation has created new opportunities for IT outsourcing providers to offer high-value services to their clients.In conclusion, the Chinese IT outsourcing market is experiencing significant growth and transformation. Chinese companies are increasingly seeking high-value services, domestic outsourcing is on the rise, and niche providers are emerging to meet specialized needs. The government's policies and regulations, as well as the underlying macroeconomic factors, are shaping the market's development.

Methodology

Data coverage:

The data encompasses B2G, B2B, and B2C enterprises. Figures are based on enterprises' technology spending on products, consulting, and outsourcing services.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players in the industry, Statista's primary research and surveys, and IT associations. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, internet users, and telecommunication. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing method is used based on the market data characteristics. The main drivers are the GDP and its sector composition, internet penetration, the level of digitization, and the attitude toward IT security.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.