Running mining devices is a rather complicated task, which turns many people away from engaging with it. Cloud mining companies spotted this business opportunity and started to rent the mining power they possessed.
Now there are many dedicated mining operations setup in countries/locations with favorable electricity pricing and cooling options, that rent hashing power to anyone who shows interest.
So a cloud miner is actually mining cryptocurrency by using rented hashing power. This is usually less cost effective than owning your own mining hardware, but it's also much easier to manage.