China comes of age in services offshoring

13 August 2010

13 August 2010 | Lindsay Clark

China has joined India and the Philippines as a “mature” location for the offshore delivery of outsourced services, according to the Everest Research Institute.

China has been a hub of outsourced manufacturing for many years but this analysis suggests it is now also a reliable location for offshoring of services.

However, Everest warned that the country was only best suited for regional work and lacked some capabilities that global companies seek for supporting operations in North America and Europe. Everest found that three-quarters of China’s offshore services exports are focused on Japan, Korea and south-east Asia.

“In the last three years, China has witnessed continued interest and activity, with service providers scaling up operations and buyers starting to experiment with more seriousness,” said Everest research director Anand Ramesh. “In our advisory engagements, China is frequently cited by buyers as a consideration but is primarily playing a role as a regional centre within their global sourcing portfolios.”

Everest found that buyers remained concerned about data privacy and intellectual property protection and this constrained the types of services and platforms that they were comfortable supporting.

Everest had earlier found that although buyers were expanding the number of locations they considered for offshoring of services, they were also doing more business in established locations such as India.

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