Indian Software Magnates Grab Chinese Markets

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Last updated at: (Beijing Time) Friday, June 21, 2002

Indian Software Magnates Grab Chinese Markets

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Tata Consultancy Services (TCS), India's top software service magnate and biggest of its kind in Asia, set up its first branch in Pudong District of Shanghai on June 18 under the name of Tata Information Technology (Shanghai) Co. The Branch will serve as the Indian company's China headquarters, overseeing operations in Shanghai, Beijing, and Hangzhou in east China's Zhejiang province.

By now India's top four software magnates have all expressed the wish to set up their China branches and unexceptionally chose their site in Shanghai, a signal that India's software magnates have kicked off their grab on Chinese markets.

Landing in Shanghai

As reported, India's second biggest software magnate Infosys has obtained "go-ahead" from the Chinese government for setting up office in Shanghai, and the third biggest Wipo is busily talking with Pudong software park for moving in. While the fourth Saryam has began operation with its R&D center under plan.

Statistics show India's IT industry only count for 1.68 percent of its GDP in 2000. With a developed software industry and weak domestic demands, India's productivity has far exceeded its market demand and huge volumes of products are exported.

But India has been paying attention to entrusted processing rather than property rights, which has been eyed as an big barrier for future development, so they are now eager to put out products of their own property rights.

India's close neighbor-China has become the first choice for software capital expansion with its good and cheap labors, tens of thousands of enterprises who are eager to become informationized and build up their e-business. Indian companies have speeded up their actions in China since their government put out flexible tax policy to help big companies to conduct overseas business.

If you add up the output of TCS, Infosys and Satyam they count for over 30 percent of India's whole software industry. What should be noted is that they all choose to set up solely owned companies in China and focus on richly returned software market of communication, banking and manufacturing sectors, apparently wishing to pack off all benefits on their own.

Chinese enterprises can hardly cope

Compared with Indian magnates Chinese enterprises seem small, weak and scattered, with only 2 mainland companies reaching CMM level 3 and 5 level 2. While in India, the world biggest software exporter, enterprises reaching level 4 or 5 are taking 50 to 60 percent of world total.

China needs at least 5 to 10 years to catch up with India, said Wu Gang, a project manager with Pudong Software Park. India's software industry started in the 70s while China in the 90s, and China should learn from India in term of software standardization, export strategy and so on. But competition would surely push forward China's software development.

By PD Online Staff Member Li Heng

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