Threat From China

China is one of the major competitor of Indian call center industry. China has several advantages over India and has a strong base to become a major hub for call centers in the coming years.

The competition between two old rivals, China and India, is sparking up as both countries become prime destinations for a substantial number of well-paid IT jobs. Many multinationals, especially U.S. corporations, plan to move operations overseas to slash costs.

The major strengths of China in the global outsourcing markets are :

• Manufacturing - China's emergence as a global manufacturing hub is one of the major factor drawing foreign software developers.
• Information Technology - Its IT market is the strongest in the world.

• Lower Manpower costs: The Chinese workers cost about 15 percent less than equally qualified Indians.
• Infrastructure: China has more comprehensive and reliable infrastructure.
• Japan Advantage: China is likely to grow through the Japanese outsourcing route. India currently offers almost no BPO services in Japan.
• Extremely low cost real estate and power: These costs are lower than in India. This can be a very attractive to the US companies, which are looking for cost cutting due to the downturn.
• Proactive Govt.: The govt. is very friendly to this sector and has taken several steps like english teaching and other skill sets.

Apart from all these advantages China also has certain disadvantages :

• Lack of a good Quality record in Software: India has a better image as a quality supplier
• Low English speaking population: It has a very small proportion of the population speaking fluent English.
• Less mature: China has only recently entered into BPO. As such, despite lower billing rates, total project costs in China would turn out be higher because of the higher overheads incurred.

China is on the process of overcoming these drawbacks to beat India to become a major destination of call centers. Chinese government is strongly supporting the call center industry and is on toes to compete with India. China in turn has become a major challenge and the largest threat for Indian call center industry which needs to be overcome in order to maintain its supremacy.

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