Most of the world's largest software companies still operate in the United States, but even American tech giants are paying attention to the software revolution underway in China. Revenue for China's software development industry is anticipated to grow to $1.2 trillion in 2021, with profit accounting for 14.5% of that amount.
China produces legions of new software engineers each year. Modern Chinese software firms are big and getting bigger, and it is possible China will soon challenge the United States as the world's preeminent international technological competitor. However, this growth is not without controversy: American tech companies remain highly critical of Chinese piracy tactics and the U.S. government has implemented a serious of sanctions aimed at protecting companies from theft of intellectual property (IP).
With that in mind, here are five of the largest and most influential Chinese software companies.
- China's five biggest software companies based on annual revenue are Huawei, JD.com, China Mobile, Alibaba, and Tencent.
- With a 2020 annual revenue of $136.7 billion, Huawei is a global telecommunications company that manufactures and sells smartphones, laptops, and telecom equipment.
- JD.com is a large online retailer with a fulfillment network that reaches 99% of the Chinese population and has 471.9 million active customers.
- China Mobile is a state-owned telecommunications company with over 450,000 employees and 942 million mobile subscribers.
- Alibaba is known as the "Amazon of China" because of its popular online sales platforms, while Tencent is known for its mobile games and prominent social media and messaging app, WeChat.
Started by a former Chinese military officer in 1987, Huawei is a global telecommunications market leader. The company employs 197,000 workers in over 170 countries. The company manufactures smartphones, smartwatches, laptops, and telecom equipment. Huawei ranks as the world's second-largest smartphone seller, after Samsung.
In 2020, the company posted annual revenue of $136.7 billion, an increase of about 71% over five years. Despite this impressive growth, the company has faced strong headwinds due in part to the economic fallout from the global pandemic and pressure from U.S. sanctions. The U.S. placed the company on a blacklist, cutting Huawei off from critical computer chip supplies and restricting its business with American companies.
On Aug. 6, 2021, the privately-held company reported its largest-ever revenue drop, generating $49.6 billion in revenue for the first half of the year. Smartphone sales took the biggest hit, with the company reporting a revenue decline of 47% over the previous year.
2. JD.com Inc.
Founded in 1998 and headquartered in Beijing, JD.com (JD) is China's biggest Internet company by revenue and largest online retailer. The company's fulfillment network reaches 99% of China's population and maintains over 1,200 warehouses. Through its e-commerce platform, the company sells its customers everything from clothes, cosmetics, fresh food, household goods, furniture, appliances, and electronics. JD.com's New Business segment offers logistics, business, and technology services to its customers.
JD.com's net revenue for 2020 was $114.3 billion, a year-over-year increase of 29.3%. Annual active customer accounts grew by 30.3%, increasing from 362 million in 2019 to 471.9 million in 2020.
The combined annual revenue of the five Chinese technology companies on our list.
3. China Mobile
Like many major Chinese companies, China Mobile Ltd. is state-owned. The company is primarily a mobile service provider, not a software designer, but it does boast a large software team among its over 450,000 employees.
Based out of Beijing, China Mobile reaches more than 942 million mobile subscribers and, by that measure, it is the world's largest phone company. Most of China Mobile's customer base is Chinese, although it reaches Pakistan and Hong Kong. As of May 2021, the company had a $134.9 billion market capitalization. Its annual revenue reached $111.3 billion in 2020.
4. Alibaba Group Holdings Ltd.
While known as a large e-commerce retailer, there is a case to be made for Alibaba Group Holdings Ltd. (BABA) ranking among China's most important software companies. Founded in 1999 by a group of entrepreneurs led by Jack Ma, a former English teacher from Hangzhou, the company seeks to help small and medium-sized Chinese businesses sell their goods both domestically and in the global marketplace.
Referred to as the "Amazon of China," Alibaba develops and implements digital technologies that assist online transactions. This includes mobile commerce infrastructure, cloud computing, logistics platforms, and fulfillment networks.
All of Alibaba's software offerings are produced through a wholly-owned subsidiary, Alibaba Software. The firm offers its own payment and banking service, Alipay. Alibaba, with a market cap of $463.7 billion as of Aug. 25, 2021, reported revenue of $109.5 billion for the fiscal year ending March 31, 2021.
5. Tencent Holdings Ltd.
Shenzhen-based Tencent Holdings Ltd. (TCEHY) operates as an investment company that focuses on online advertising, fintech, and value-added services. The company offers online and mobile games, along with a variety of Internet and mobile applications. Tencent is also a Chinese social networking giant. Its WeChat messaging app claimed more than 1.25 billion monthly users in the second quarter of 2021.
As of Aug. 25, 2021, Tencent's market cap was $584.5 billion. The company reported annual revenue of RMB 482.1 billion ($74.4 billion) in 2020, an increase of 27.9% over the previous year.