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June 2011 | Outsourcing Blog | BPO Industry Updates and Articles

Outsourcing Opportunities in China

by: Ronald Escanlar

Tuesday, June 21, 2011 | Comments (0)

Category: Outsourcing Research / Trends

India-based outsourcing service providers only had a 1 percent share of the global sourcing market about ten years ago. At present, they command almost 20 percent of the sourcing market. China is also on the move to seize their fair share of the outsourcing market, as government bodies hasten development of the Chinese sourcing markets and service providers.

Outsourcing opportunities in Chinese market

Outsourcing advisory firm TPI Inc. cites five trends in the outsourcing environment which may help and spur the growth of the Chinese market:

Global service is the new norm. According to TPI, two-thirds of all transactions involve delivery from offshore service centers.

Multisourcing arrangements are increasing among client-companies and service providers. The playing field is getting leveled by companies turning to multisourcing instead of relying on one outsourcing service provider.

A spotlight on risk management has driven companies to prefer multi-country service delivery options. TPI says more locations are developing specialized skills that are cost-effective for client-companies.

Outsourcing deals are increasingly becoming more cost-effective. TPI says clients are saving 33 percent more money compared to seven years ago.

Opportunities in China are too attractive to pass up. The rising importance of the burgeoning Chinese domestic market, coupled with the strong support of the Chinese government, is enough to convince global service providers, large captive centers, and organizations interested in penetrating the Chinese market that China will yield profitable results in the long run.

As with other countries, China presents challenges such as data privacy, intellectual property rights, language and cultural barriers, and labor relations. Nevertheless, the outsourcing industry has overcome these challenges through practical solutions that reflect the resourcefulness of the industry.