Loh Tiak Koon, CEO of Beijing-based IT outsourcing giant HiSoft, said within the booming global outsourcing market, the Chinese market will continue to grow a lot faster than its counterparts. Citing research from IDC, China saw 25 percent year-on-year growth in 2011, whereas India grew in the mid-tens, he told ZDNet Asia in an interview Thursday.
Loh, a Singaporean based in Beijing, was at a media event here where HiSoft’s Singapore officereceived the international headquarters (IHQ) status from the Economic Development Board (EDB), making it the headquarters for HiSoft’s Asia South–excluding mainland China and Japan–business.
According to Loh, the Chinese IT outsourcing industry has grown well vis-à-vis the Indian players and will continue to be "extremely strong" in the next three to five years. He attributed his outlook to four main reasons.
First of all, there is the huge and rapidly growing domestic market in China, coupled with still low IT penetration, that local outsourcing companies can tap.
Second, there has been a tremendous push by multinational corporations (MNCs) to enter the Chinese market, which they increasingly realize that their systems must be localized in order to succeed.
Third, the size of the IT labor force including IT graduates in China is equal to that of India. But while the Indian labor force has been fully exhausted because Indian outsourcers have been fully deployed over the last 10 years, the Chinese labor force has not been tapped as much, meaning means room for tremendous growth in the "infant years", Loh explained.
The last reason is that Chinese outsourcing companies also have business opportunities in Japan which has an aging population, he noted. "In terms of proximity like geographical distance and cultural affinity, the best country to serve Japan’s outsourcing [needs] is really China," he said.