India’s Top IT Services Provider TCS Eyes 25% Growth in China

Submitted by jcherian on Thu, 12/10/2009 - 16:00

India's no.1 IT services provider, Tata Consulting Services Ltd, anticipates a growth target of 20-25 percent in China in the near future. Those figures stem from Tata's success in tapping the Chinese outsourcing market, particularly the financial services market.

According to TCS CEO N. Chandrasekaran, Tata's outsourcing interest in China was affected by the economic downturn due to the slowdown in offshore trading from the U.S. to the mainland. However, TCS was able to offset the crisis by cashing in on Chinese financial firms that were shielded from the economic crisis in the U.S.

TCS is planning to make an entry into Chinese energy and utility outsourcing industries, said Chandrasekaran. In China alone, the outsourcing giant has more than 30 international and local customers in the financial services, telecom, government, and manufacturing sectors. The company announced earlier that it would spike its staff in China from 1,100 to 5,000 toward the end of 2014.

Chandrasekaran told the China Daily, China is huge economy and TCS is focusing on the market. TCS plans to convert China into an Asian offshore hub. Moreover, the company plans to decrease its presence in Europe and U.S. while increasing its profile in markets like the Middle East and the Asia Pacific region. These regions currently comprise 7 percent of TCS' revenue.

Consultancy group IDC said, the revenue from software-development in China is likely to increase more than twofold from $2.72 billion this year to $6.78 billion in 2013.

TCS, based in Mumbai, raked in $1.5 billion in revenues during the second quarter in the fiscal year 2010. The Asia Pacific, which consists of key markets like Australia, Japan, and China brought in about 5.3 percent of that figure. Incidentally, TCS made an entry into China in 2002 and has a 66% stake in TCS China, a joint venture with three Chinese firms started in 2006. Two years later, Microsoft Corp. joined the bandwagon with a stake of 8.7 percent in TCS China.