Since 2006, China’s market for the outsourcing of technology services has experienced rapid growth and has been heralded as a challenger to India’s market dominance. According to China’s Ministry of Commerce, the total contract value of executed outsourcing contracts in 2010 with Chinese-based service providers was approximately $19.8 Billion, a 43.1 per cent increase from the prior year. Nonetheless, this rapid growth represents a mere fraction of the global IT services market and hardly 26 per cent of India’s market volume. So how can China rise to compete globally in IT Services? 1. Focus on market share, not on “beating India” a) Focus on unique markets The sharp increase in offshore business is closely tied to China’s unique linguistic and demographic advantages in supporting South East Asia. Vast differences in economic development, culture and labour skill-sets have provided Chinese cities and local providers with their own specialised competencies. Below is an independent analysis conducted by Avasant that illustrates the strengths and weaknesses of the key outsourcing cities in China. Additionally, the large potential for growth of the domestic market in China (including MNC subsidiaries in China) has only recently been unleashed. These unique markets should continue to be the focal […]
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