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IT could still swing India's way in China
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The two elements Indian IT firms need to succeed in China are “right partner” and “domain knowledge,” says Fanny Chan, senior vice-president, ChinaSoft International.
Chan is on her first visit to India as a member of the Chinese delegation to Nasscom’s three-day IT conclave here.
“Tier I companies are finding it hard to do business in China because they believe in doing things themselves. In China, you have to find the right partner who understands the market. Tier II companies, on the other hand, partner easily and hence have better chances to succeed. Also, in China, you need time to conduct business. Indian companies need to understand Chinese culture before they can hope to make any meaningful impact,” she said.
Indeed, Indian IT biggies haven’t managed to replicate the IT success story in the middle kingdom and most of the bigger players are either running behind schedule on their China plans. At any rate, China operations are yet to throw up significant revenue numbers for any of them.
Only Tata Consultancy Services, which has formed a joint venture with Microsoft and local IT firms, has met with any success, though nowhere near the scale it has back home or even Latin America, where it has scaled up to 5,000 people in under five years.
The China operations of Infosys and Satyam Computer Services are nothing to write home about yet. Infosys has under 1,000 employees in China and the subsidiary is yet to break even.
The Chinese IT market is one of the fastest growing, with the hardware sector growing at 15-20% per annum and services sector at over 30%. However, the market is highly fragmented.
Hong Kong Stock Exchange listed ChinaSoft, amongst the top three IT companies, has revenues of about $100 million and has only 5,000 employees on its rolls.
In contrast, TCS, India’s top IT company, employs several times that figure in a single city it operates in.
“In China, the top 10 companies have only 30% of the market size. There are lots of small companies who operate in a niche segment and this is where partnership opportunities come in,” Chan said.
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Updated on:
18 Feb, 2008
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