Service Outsourcing Reinforce Needs Power of “Taiwan and Mainland”
Source: View: 260 Date: 2016-01-20

"Under background of slow recovery of global economy and big press of domestic economic downturn, service outsourcing industry in China has general good trend” explored by director of MOFCOM recently, the amount of service outsourcing contract signed by China’s enterprises in 2015 was 130.93 billion RMB, the implementation amount was 96.69 billion RMB, which increasing 22.1% and 18.9% year-on-year respectively.

The director indicated that in the year of 2015 China’s service outsourcing mainly had six features including stable development of offshore service outsourcing, gradually optimized structure of offshore service outsourcing, relative stable main outsource market layout, gradual importance of “One Belt & One Road” market, rapid business growth of coastal provinces and cities of Yangtze River Economic Zone and deep integration of service outsourcing and vertical industries.

Industrial insiders believe that service outsourcing layout in China has become integration of offshore outsourcing market & onshore outsourcing market & “One Belt & One Road” emerging market. In the year of 2016, China’s service outsourcing will keep good trend of development, strong demands of market especially in domestic market. To strengthen service outsourcing industry need consolidate Europe, USA and other offshore market, need develop “One Belt & One Road” and other emerging offshore markets, also need develop and release demands of onshore business.

Offshore Business Steadily Develops & Enterprises Need Real “Go-outside”

According to data from Ministry of Commerce, in the year of 2015, the amount of offshore service outsourcing contract in China was 87.29 billion USD; implementation value was 64.64 billion USD, which increasing 21.5% and 15.6% year-on-year respectively. Among them, the implementation value from USA, Europe and HK increased 17.5%, 17.6 and 28% year-on-year respectively. Influenced by continue depreciation of Japanese YEN and big politic environment between China and Japan, Japanese business also decreased.

Zhang Qiang, the secretary of CITSA said when interviewed by reporter that from feedback situation of partly outsourcing enterprises, offshore market businesses from Europe and USA have decreased, Japanese market also has some adjustment but keeps stable situation. “This is different from data that may because of statistic methods and requirements”.

He also introduced that because of segmented demands, business agility and quick feedback, outsources may have higher requirements for outsourcing service providers. “This requires outsourcing enterprises to have higher local delivery ability. Nearly all of famous domestic outsourcing enterprises has established local work team in USA and provided direct services for American customers; thus, per capita unit price and profit of business have been greatly increased.”

Mrs. Sha Qi, the vice president of Devott also indicated that offshore outsourcing business in China is transiting from offshore services to onshore services; more and more American outsourcers require China’s service enterprises to have nearby service ability and delivery center for USA. “The ability of nearby service has gradually become one of important standards to evaluate service providers, which requires enterprises to really ‘go outside’.”

The amount and implementation value of service outsourcing contract undertaken from costal countries of “One Belt & One Road” in China have increased 42.6% and 23.4% year-on-year respectively. The importance of “One Belt & One Road” market has gradually improved that nearly becomes a consensus of all industry. Two experts above believe emerging market like “One Belt & One Road” will become new blue sea of offshore service outsourcing. Sha Qi believes that “with development of international cooperation and aid project, how China’s service outsourcing enterprises ‘go outside’ following country, Huawei/ Zhongxing and other big enterprises and how establish outsourcing service structure and system in early stage of market development are key missions of developing these emerging markets.”

Huge Demands of Onshore Market & Deepen Integration of Vertical Industry

The offshore service outsourcing implementation value of information service industry and manufacturing industry in China were 31.56 billion USD and 17.73 billion USD in the year of 2015, which accounting for 48.8% and 27.4% of all industry respectively. With formal implementation of “internet +” strategy and activity plan in 2015, professional production organization way based on internet and vertical industries including modern information technology has been widely used to further deepen integration between service outsourcing and information service industry , manufacturing industry, wholesale & retail, traffic & transportation, energy, finance industry, and health industry. “The implementation and promotion of national policies like ‘internet +’ will release huge amount of IT demands, in the process, outsourcing industry also need to integrate with relative industries deeply.” Zhang Qiang believed that internet +, cloud computer, big data and other new technologies bring many opportunities for traditional industries; however how traditional industries transplant may need help from IT industry. The wide uses of service outsourcing mode not only improves professional service ability of domestic enterprises; but also promotes transformation & upgrading of industrial structure and increases efficiency of whole production to accomplish better economic benefit and social profit.

Sha Qi told reporter: “integration of information and industrialization, Industry 4.0, internet + and other national policies promote development of onshore market demands; meanwhile, service outsourcing also becomes core power to promote these processes. In future, with all industries becoming driving powers of IT, all enterprises becoming IT enterprise, all enterprises need outsourcing, service outsourcing will play promotion function in the process of transformation of internet +.”

Sha Qi suggested that outsourcing enterprises shall transform from general outsourcing services to real and high added-value solution and products providers in vertical industries deeply. In this process, enterprises shall more focus on accumulating data assets, understand industrial development trend, more under customers than themselves; more concentrate on service productization and integration of software & hardware.

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