Indian outsourcers find it difficult to make foray into China
In sharp contrast to global success of Indian IT and ITeS firms, the Chinese market continues to remain elusive for them. In fact, they are finding it extremely difficult to establish their footprint in China – one of the most promising and fastest growing markets globally despite the willingness by several Chinese businesses to outsource their work.
A recent report in a financial website says that though China and Japan constitute the largest economies in the region, the presence of the Indian tech firms in these two countries is insignificant. On the contrary, they are expanding in a major way in Latin America. According to industry experts, apart from the linguistic barriers, the major problem with India’s immediate neighbor across the mighty Himalayas is cultural difference, while Japan’s resistance to change is holding back the Indian tech firms to enter those lucrative markets.
The report quotes Wipro joint chief secretary Suresh Vaswani as saying that the agile Indian tech firms are actually finding it difficult to adjust with the state-driven enterprises in China. Genpact chief executive Pramod Bhasin also agrees with Vasani saying there is a vast gulf between the entrepreneurial styles of India and China.
Despite this, a few are endeavoring hard to crack the tough outsourcing market in this communist nation. India’s largest IT firm Tata Consultancy Services (TCS) is one among them. According to a recent announcement made by the company, it intends to double its 1,000 employee base in China by 2011. According to TCS CEO N. Chandrasekaran says that market acquaintance over a period of time would definitely have its positive impact.
Even Bhasin is of the view that having a good knowledge regarding navigation in China’s corporate power structure would facilitate their entry into this vast economy. He suggested that the Indian tech firms need to take a cue from the US multinationals like IBM, McKinsey and Accenture in this regard. In fact, Genpact already has already established three operational centers in China – at Shanghai, Changchun and Dalian. Even Wipro, India’s third largest IT/ ITeS firm, has an existing facility in Shanghai and recently opened a global delivery hub in Chengu.
Meanwhile iSoftStone vice-president Seth Pinegar is of the view that the Chinese firms have an edge over their Indian counterparts while working on the Chinese soil. Substantiating his view, Seth said that it is much easier for the Chinese multinationals to executive large-scale projects with Chinese professionals in their own country.
While the Indian government has been making efforts to enhance bilateral trade between the two countries, including the participation of Indian tech firms in China, Beijing has already initiated measures to promote the outsourcing industry. Recently, the Chinese government has announced that the outsourcing services vendors in 21 cities in the country would be exempted from business tax on offshore contracts till 2014. According to global auditing and consulting firm Deloitte, the country’s outsourcing industry contributed revenues worth $26 billion in 2009.