China bypasses Japan as biggest APAC tech spender

Asia-Pacific is forecast to spend US$689 billion on tech goods and services this year, led by China which has surpassed Japan to become the region's biggest tech spender.

Asia-Pacific is expected to spend US$689 billion on tech goods and services in 2016, led by China which has surpassed Japan to become the region's biggest tech spender.

This would climb to US$723 billion in 2017, according to projections from Forrester.

In local currencies, the region's tech expenditure would chalk up US$598 billion this year and US$621 billion in 2017, growing at 4.5 percent and 3.9 percent, respectively. Against the US dollar, the growth rate would drop to 3.2 percent this year, but still would be healthier than a 2.8 percent decline in 2015.

Currency fluctuations would play an influencing factor in the tech markets, especially against the US dollars against which all Asia-Pacific currencies fell in 2015. This pushed US-denominated tech market growth to decline, Forrester explained.

The research firm noted that India and China would clock some of the fastest tech market growth, while Japan and Australia were expected to have some of the slowest.

According to its estimates, China in 2015 become the region's largest tech spender at US$209 billion, bypassing Japan--which spent US$203 billion--for the first time. In 2014, Japan spent US$229 billion, compared to China's US$192 billion.

This year, China was forecast to chalk up US$224 billion in tech expenditure, followed by Japan's US$203 billion and India at US$57 billion.

Forrester noted, however, that China's growth would be slower than in past years, as the country's declining economic growth would result in tech buyers becoming conservative in their purchases.

Hardware and telecommunications services would dominate the Chinese tech market, with local giants such as Huawei, Lenovo, and ZTE holding up against their Western competitors.

Japan's tech market would grow just 1 percent this year before flattening out in 2017, dragged down by the lack of real economic growth in the country. And while India is the region's third-largest tech spender, its market would account for just one quarter of Japan's and despite its GDP making up almost 60 percent of Japan's.

The gap reflected India's immature tech market, where tech spending still would be focused on building the necessary hardware infrastructure, Forrester explained, adding that spending on computer and communications equipment was greater than that on consulting services.

South Korea's tech market also was expected to outpace Australia's in size and growth, clocking an estimated US$48 billion last year and US$50 billion this year, compared to the latter's US$48 billion last year and a drop to US$47 billion this year.

Across all Asia-Pacific markets, spending on telecom services would hit US$196 billion in 2016, accounting for about a third of overall expenditure. Computer equipment, the second-largest product category, would see spending of US$142 billion, while software would clock US$110 billion.

The region's spending on tech consulting and systems integration services would reach US$69 billion, with tech outsourcing accounting for US$42 billion.