Japan and Korea Driving IT Outsourcing in China According to New Report
China has seen increased IT outsourcing coming its way from regions such as Europe and the US. Japan and Korea have also begun outsourcing to China to utilise the availability of huge labour forces. Minimal costs have also been attracting these countries to this region. The market is expected to grow substantially.
Increased foreign investment and strong support from the Chinese government have been driving factors in this market. Language barriers and a lack of high skilled professionals however continue to prove to be challenges for this market.
TechNavio’s IT Services Outsourcing Market in China 2010-2015 report has been prepared based on an in-depth study of the market along with inputs from various experts. The report contains market and vendor landscape supported by drivers, restraints and trends. It also contains an analysis of key vendors in the market.
For the purpose of this report the market includes the Chinese Information Technology Outsourcing (ITO) market and key vendors. The Chinese Business Process Outsourcing (BPO) market and its vendors are not covered in this report.
Traditionally the US and Europe have been key contributors of IT outsourcing to China. Of late, Japan and Korea have also followed suit. Availability of a large pool of labor coupled with significant cost advantages has been making the Chinese market attractive. Moreover the familiarity of regional languages has been an added advantage for countries like Korea and Japan. The growth of the Chinese market is viewed as a threat to other outsourcing leaders such as India and the Philippines.
The growth of the Chinese market as an outsourcing hub can be directly attributed to foreign investment and strong support from the Chinese government. Transportation, telecommunications and network infrastructures have been developed quickly and consistently to be at par with developed countries.
TechNavio’s analyst says, Mergers and acquisitions will continue to be the key strategy used by organisations to gain a share in this market. The possibility of low cost acquisitions has been attracting several global companies into this market.