TCS sees huge business potential in China

Monday, 23 June 2003, 07:00 Hrs
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NEW DELHI: Tata Consultancy Services (TCS), a software development and services arm of India's industry conglomerate Tata group, is bullish about business prospects in China, especially in sectors like telecom and finance.

TCS, India's largest software company, is one of the few Indians IT companies with a presence in the Chinese market.

The company, which started operations in China over a year back, has a development centre in Hangzhou that provides services to clients over the Asia Pacific region, in coordination with TCS' delivery centres in India.

It also has offices in Beijing and Shanghai, said Atul Takle, vice president (corporate communications) of TCS.

"TCS entered China with a three pronged strategy. The first strategy was to do work for our global clients for their Chinese business," Takle told IANS in an e-mailed response from the TCS headquarters in Mumbai.

"Secondly, we also wanted to tap and exploit the market opportunity which exists in a market like China. We are doing this through strategic tie-ups with local Chinese IT services companies in some strategic areas like telecom.

"Our third strategy was to offer our Chinese facilities as a location for off-shoring work from neighbouring countries like Japan and (South) Korea," he added.

"China is a market which offers high potential in each of the above mentioned categories, and TCS will tap into these."

The TCS official said the company was focusing on verticals like telecom, financial services and banking for providing its technology services.

Senior officials of TCS are visiting China as part of a high-level Indian business delegation accompanying Prime Minister Atal Bihari Vajpayee, who flew to Beijing Sunday on a six-day visit.

Stung by a demand slowdown in the U.S., Indian software companies are aggressively eyeing other markets, including neighbouring China, which accounts for a negligible share of Indian software exports.

According to the National Association of Software and Service Companies (Nasscom), India's software industry umbrella group, IT exports from India to China is worth 200 million, or a meagre 0.05 percent of the total software exports in 2001-02.

Analysts say the Indian IT firms can leverage Chinese infrastructure and abundant talent to tap opportunities in China or offer global customers research and development services.

Besides TCS, Hyderabad-based Satyam Computer Services, the country's fourth largest software exporter, has a sales office in Shanghai, which the firm plans to expand soon.

The New Delhi-based NIIT Ltd., one of India's computer training majors, says it has drawn up a strategy to strengthen its IT training in China. NIIT entered China in 1998 and operates about 100 centres.

Infosys Technologies, India's largest listed software exporter, says the company is close to resolving all legal wrangles that had put roadblocks on its way to setting up a branch office in China.

Takle of TCS said of the over 100 people working at its development centre in China, more than 80 were locals hired from Chinese universities.

"In a global economy, competition is a way of life, whether from a country or a company. China will undoubtedly grow stronger in the IT services space in the coming years," he said.

"Which is why we took a conscious decision to actually be there as a part of the Chinese market itself, and identify and exploit opportunities which may come about."

Revenues of TCS for the fiscal year ended March 31, 2003 touched 50.12 billion ($1.04 billion), up from 41.87 billion in fiscal 2001-02. The company has over 24,000 professionals working in over 100 branches in 32 countries.
Source: IANS
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