Sets up labs, centres of excellence.
Bangalore, Dec. 16
IT giant Wipro is strengthening its operations in China by setting up four new labs and three centres of excellence but a US-based analyst firm has warned that rising competition from Chinese vendors could hit the Indian firm.
Wipro Technologies Chief Sales and Operations Officer for APAC and China, Mr Rajat Mathur, said the company has opened a lab each for android platform, wireless telecom, mobility and ATG and three centres of excellence.
Mr Mathur said China is very strategic for Wipro across multiple businesses and its global delivery centre in Chengdu, which is among the seven such centres across the globe, delivers IT services to over 18 customers across the US, Europe, Asia Pacific and Japan as well as customers in China. In China, Wipro is focusing on local customers in manufacturing, telecom, retail, technology and BFSI.
But the US-based analyst firm SIG Susquehanna International said that Chinese vendors may take away some business from Wipro. “As the Chinese vendors begin to report, watch for further erosion among key Wipro customers that have begun diversifying their suppliers into China,” the report said. It also said Wipro's testing practice is also facing growing competition from China.
The report said while China's IT outsourcing is still fledgling, its best success has been conducting outsourced R&D for the western IT industry. Microsoft, Cisco and Nokia are among a longer list of companies that now outsource IT development to China.
“Historically, outsourced R&D for the tech sector is the largest offering for Wipro, which has reported a spike in attrition and wage inflation in the last few quarters that exceeds industry peers.”
Mr Mathur said 95 per cent of the total employees at Chengdu are local nationals. The company hires graduate students from more than 20 universities for Shanghai and Chengdu offices. Wipro operates out of two other locations in China, which are Dong Guan for consumer care and Changzhou which has its hydraulics factory.
“We have a stringent recruiting mechanism to make sure we have the right people. All employees go through rigorous training programmes (technical, culture assimilation, language and other soft skill training modules) to gear up to manage global assignments,” he added.