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Amazon expands its cloud presence in China as it locks horns with country's internet giants

Key Points
  • Amazon expanded its cloud presence in China
  • Amazon Web Services partnered with Ningxia Western Cloud Data Technology Co to open its second cloud region in China
  • Amazon is battling local giants including Alibaba and Tencent founder and CEO Jeff Bezos.
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Amazon expanded its cloud footprint in China Tuesday in one of the fastest-growing but most competitive markets in the world.

The U.S. e-commerce giant said it partnered with Ningxia Western Cloud Data Technology Co (NWCD) to open its second Amazon Web Services (AWS) operating region in China. AWS is Amazon's cloud computing arm.

Amazon will now have cloud services available to customers in the Ningxia region, which is south west of Beijing.

The Seattle, WA-based firm already has a cloud footprint in Beijing thanks to its partnership with Sinnet.

It's difficult for American firms to enter China without a partnership. Through the relationships with these Chinese firms, Amazon is able to get its cloud products into China. NWCD offers AWS products to Chinese customers on behalf of Amazon.

Operating in China is not always easy, particularly for companies handling customer data. Last month, Amazon sold parts of its cloud business in China for up to 2 billion Chinese yuan ($301 million) to its partner Sinnet. In a statement at the time, Amazon said it sold "certain physical infrastructure assets" to "comply with Chinese law."

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China is a tough but potentially lucrative market for foreign cloud players. In the cloud services market, where Amazon is a player, Chinese operators account for around 80 percent of revenues, according to market research firm Synergy Research. But at the same time, public cloud spending in China grew 55.6 percent year-on-year in the first half of 2017, according to IDC, highlighting the potential of the market.

Amazon is battling local giants including Alibaba and Tencent.

"For years, AWS and our partners have had an enthusiastic base of customers in China, a country with one of the world's largest and most dynamic cloud ecosystems," Andy Jassy, CEO of AWS, said in a press release on Tuesday.

Amazon said it has "thousands of active customers in China already" such as Lenovo, Samsung Electronics and Xiaomi.

The company said that the Ningxia launch marks its seventh cloud region in Asia-Pacific.