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China catching up to India's outsource market


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China's outsourcing market is giving India "substantial competition" in terms of "footprint, awareness and capability", said Jens Butler, principal analyst at Ovum, in a statement released Thursday.

 

India's possible eclipse by China's ascension in the outsourcing business has been reported by analysts in recent years. They point to India's high attrition rates, poor infrastructure, and rising wages as factors contributing to the country's decline in shared services and outsourcing (SSO) activities.

 

In a study conducted by Tholons and Global Services, India was the top global outsourcing nation in 2009. China was among the top five.

 

Butler called the competition between China and India a "two-horse race to the finish".

 

Both countries, said the analyst, are frequently touted to have low-cost delivery locations, which attract investments from several foreign enterprises to set up operation. Both countries are also becoming increasingly influential global centers of political and economic power, added Butler who is based in Sydney.

 

Butler stressed the need to consider each delivery location on "an individual contractual demand basis" because each market has its own unique advantages and trade-offs. For instance, India's maturity of its outsourcing marketing vis-a-vis China's cost-competitive rates that will appeal to companies eager to tap the huge domestic market.

 

However, political stability and government support are also key, noted Butler, adding that such factors play a "key role".

 

In India, there is province-led support for homegrown free-market organizations. In China, under the country's Five-Year Plans--aimed at turning its economy from mostly manufacturing to including services--the government has given strong supportto boost the local outsourcing industry. It has done this by supporting outsourcing centers, temporarily removing business taxes on offshore local contracts, and opening up more jobs in the industry.

 

India has non-IT outsourcing to look to

India's key information technology (IT) outsourcing market may be threatened by China's, but outsourcing for other industries in the country is on the rise. Spurred by the high quality of writing and the cost savings of hiring Indian legal writers and editors, there are now at least 140 legal outsourcing companies in India as at end of 2009. In comparison, there were a mere 40 in 2005, according to a report from Indian consulting firm ValueNotes.

 

 

 

Butler also pointed out that there are a host of other countries which provide alternatives to the two current "magnets" of SSO activities, such as the Philippines, South Africa and Latin America."These locations may not compete from a pure scale perspective, but they may well continue to extract market share from both", just as China is doing to India, he concluded.

 

 

 

http://www.zdnetasia.com/china-s-outsourcing-market-closes-in-on-india-62203127.htm

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Jess Bartone

And mark my words, China will not only catch up, they will surpass India after the debacle that is about to unfold there, the Commonwealth Games are in a shambles, and supposed to start in a few days. Outsourcing companies will jump ship in droves as the world watches the collapse of The Games as we know them, there will be terrorist attacks too, and the Indian government is wasting all its energy trying to cover up the mess instead of doing something about it. Australia (amongst others) has been busted red-handed taking bribes for voting for India to get the games in the first place. You think the Philippines is disorganised? Ha! A well-oiled machine by comparison.

 

Outsourcing contractors in the Philippines should not only be ready, but should actively seek to catch some of the spill-over. The expression "like rats off a sinking ship" comes to mind.

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Jesse;

 

 

 

The RP can only benefit if they are awake at the wheel. Remember the article also points out another selling point that China's infrastructure is better than India's and it goes without saying that its better than the RP's. For the RP to really benefit they need to not only clean up their act now but continue to do so asap.

 

 

 

And mark my words, China will not only catch up, they will surpass India after the debacle that is about to unfold there, the Commonwealth Games are in a shambles, and supposed to start in a few days. Outsourcing companies will jump ship in droves as the world watches the collapse of The Games as we know them, there will be terrorist attacks too, and the Indian government is wasting all its energy trying to cover up the mess instead of doing something about it. Australia (amongst others) has been busted red-handed taking bribes for voting for India to get the games in the first place. You think the Philippines is disorganised? Ha! A well-oiled machine by comparison.

 

Outsourcing contractors in the Philippines should not only be ready, but should actively seek to catch some of the spill-over. The expression "like rats off a sinking ship" comes to mind.

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  • Admin (Retired)

yeah and if they get mad at each other they got a billion people to throw at each other

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The problem with India and China is that they are trying to do things that they are not equipped to do..... and that is the fault of the Western world...American automotive companies in particular..... Countries that have a strong manufacturing tradition have been left behind because they can't compete with the technology and efficiency that these countries have to offer.... BULLSHIT!!!

 

They can't compete against the labor cost in these countries..... these countries do have access to the technology but they don't have access to the skilled people it takes to make it all work... A western supplier will quote a job....then the automotive company will give a benchmark price quoting thirdworld labour rates.... it's common practice in our GLOBAL economy...ever wonder why we experience so many product recalls nowadays....???? it's all about cutting corners to hit the "cost" target.

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  • Admin (Retired)

years back i remember hearing something about modern day China, can't remember where i heard it from to be honest, it was simpley China is great at copying and implementing current technologies that is their strong suit. but they are no good at creating

 

for now that's good enough i suppose

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years back i remember hearing something about modern day China, can't remember where i heard it from to be honest, it was simpley China is great at copying and implementing current technologies that is their strong suit. but they are no good at creating

 

for now that's good enough i suppose

 

 

Long before that, they said the same thing about Japan.

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