(Yicai Global) April 26 -- The world's second-largest cloud provider Amazon Web Services has officially begun operations in Hong Kong in a step to Asian rivals like Alibaba and Tencent.

AWS Asia Pacific Hong Kong Region went live yesterday, spanning three Availability Zones to serve Cathay Pacific Airways, Hong Kong Disneyland Resort and other corporate customers in the special administrative region, the firm said in a statement the same day. The move will allow companies, schools, government agencies, developers and non-profits to run their applications locally in Hong Kong, offering lower latency to end-users, it added.

The global public cloud market grew 21.4 percent last year with Seattle-based AWS, Microsoft Azure and Alibaba Cloud Computing commanding a combined share of over 70 percent of the sector, according to research from Gartner.

While many competitors are still splurging to enhance their market share, AWS already contributed to more than half of Amazon's operating profit and was the first provider to turn a profit. It contributed 10.3 percent of Amazon's fourth quarter revenue last year, but made up USD2.2 billion, or 57.5 percent, of the firm's operating profit for the period, according to the parent's earnings report for 2018.

But in Asia, AWS faces stiff competition from local rivals. Alibaba Cloud's share of the infrastructure as a service and infrastructure utility services sectors in the APAC region last year rose 4.7 percent annually to 19.6 percent last year, larger than AWS's 11 percent and Azure's 8 percent combined. 

In China, the gap is even greater. Alibaba Cloud commanded 43 percent of the Chinese public cloud sector last year, followed by Tencent Cloud at 11.2 percent and China Telecom at 7.4 percent, according to International Data. AWS was the fourth largest provider with a 6.9 percent share and Azure was seventh with 3.7 percent.

The new Availability Zone will be AWS's eighth in the Asia Pacific region behind Beijing, Mumbai, Ningxia, Seoul, Singapore, Sydney and Tokyo, and the company's 64th in 21 geographic regions worldwide. It also plans to add 12 more AZs in Bahrain, Cape own, Jakarta and Milan.

Editors: Xu Wei, James Boynton