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The Localization Service Sector in China at Dawn

by Cui Qiliang

Secretary-general of the Localization Service Committee of TAC

 

Localization service sector in China has gone through periods of start-up and development for over a decade. During 2007 and 2008, the sector strengthened publicity and exchanges with global counterparts, and has grown from a random state without any order to being regulated and organized. Despite the impact of the global financial crisis, opportunities are accompanied by crises and the blueprint of China becoming the new multi-language service center has been shown.

1. Localization sector strengthens exchanges and makes preparations for establishing trade organization.

Localization service is a new sector in China and the general public knows little about it. In the past few years, due to the small scale of this sector and lack of trade organizations or platforms for exchanges, there were few effective exchanges in the sector. With the growth of localization sector in China, the development of the Internet and information and communication technologies, the exchanges have gradually increased and preparations were made to establish the Localization Service Committee under Translators Association of China. In August 2008, the committee in preparation successfully organized four high-level forums of localization during the 18th FIT World Congress, which was the first time for the localization sector to make an appearance in a world conference. In October 2008, the committee organized the Summit of Localization Service Suppliers which discussed the impact of the financial crisis on software localization in China, and the technological development of machine translation and the impact of its business model on the localization sector.

2. The localization sector grows rapidly and the need for the training of specialized personnel is strong.

With economic globalization and localization of information, China is becoming a global center for language localization service. The huge market brought along by economic globalization, internationalization of enterprises, and localization of products prompt the great need for localization talents, while training of local people is counted as an effective way to meet the need.

In January 2007, IGS Technologies Co. Ltd was established, the first of its kind in China to provide a full range of training courses of technology, management and process for international and Chinese software development companies, localization companies, translation companies, university students and individuals. IGS has offered many localization courses such as internal trainings of enterprises, open courses or employment training, with an aim to explore a way for the training of localization professionals.

3. The Chinese localization market attracts the attention of the world and high-level international conferences are held in China.

The rapid economic growth in China, the great need for localization products, rich human resources, as well as the advantage of competitive cost of human resources have enabled localization sector in China to evolve into a new stage, which attracts the attention of localization sector in other countries. How to enter Chinese market and how to get accustomed to the requirement of Chinese culture and tradition? Localization sector in other countries need to understand and get familiar with Chinese market and the capacity of localization service in China through exchanges and discussions.

To organize international localization conferences in China helps the localization sector to understand China better and enter the Chinese market. Localization Industry Standards Association (LISA) held China Focus 2007 in Beijing during March 12 and 15 in 2007. Five days later, Localization World Conference took place in Shanghai, the first time for this high-level trade conference to be held in China. These two international conferences of localization were held consecutively in China, reflecting the important position of localization sector of China in the world. China has joined the rest of the world in global competition and cooperation.

4. Outsourcing service providers that are transformed from localization service companies are favored by international venture capital.

With growing business scale and improving skills of service, software localization companies such as VanceInfo, BeyondSoft, and hiSoft have transformed themselves to software outsourcing providers, as supported by the state policies of encouraging the development of software outsourcing. They are favored by international venture capital. On December 13, 2007, VanceInfo Technologies Inc. was listed on the New York Stock Exchange (NYSE: VIT) and raised 65 million US dollars. It is the first publicly listed company that was started up as a software localization provider and then has transformed into a software outsourcing provider.

VanceInfo Technologies Inc. was established in Beijing in 1995 and provided localization and translation services for software products of international IT firms such as IBM and Microsoft. It turned itself to the software outsourcing service sector since 2002. It has grown rapidly since then and become the leading provider of software outsourcing in China, attracting several venture capital firms both at home and abroad. Its listing in the US provides an example of the development model of localization service in China and has a profound influence on software outsourcing and localization service companies.

5. Localization service companies in China have grown rapidly and been ranked for the first time on the ranking of global translation service firms.

Starting in 2005, Common Sense Advisory, a US firm specializing in localization consultancy and technology research, releases each year a ranking of global Language Service Providers (LSP). hiSoft was listed in the top 25 in 2008. This is the first time for a Chinese company to be listed in Common Sense Advisory ranking.

6. The localization service companies face up to the challenges of the financial crisis and look for opportunities of development.

The international financial crisis in 2008 has a deep impact on Chinese localization service sector. Chinese localization company executives need to think how to face up to the challenges, seek opportunities of development and tide over the difficult time. In October 21, 2008, TAC organized the Summit of Localization Service Suppliers in Beijing. Many localization service providers participated in this summit, discussed and analyzed the challenges, opportunities and responses in the context of financial crisis, as well as the development of this sector.

Participants of this summit believe that in the future, localization service providers need to pay more attention to management-related issues, such as staff qualities, internal administration, service quality, models and skills. By laying a more solid foundation, localization service providers in China will be better prepared for opportunities and challenges. In the context of financial crisis, localization service providers should be able to seize the opportunities of the transfer of global language service to China, to upgrade service quality and scale, and to develop toward new and higher end of business such as technical writing.

7. Localization business extends and transfers from first-tier cities to second-tier ones.

With the growing cost of human resources and operations of first-tier cities, second-tier cities start to take advantage of state policies of promoting the development of software outsourcing and attract software outsourcing companies to their cities by a series of favorable policies. Some major localization service companies have expanded their business or transferred to second-tier cities. Shenzhen-based SDL established its processing centre of localization desktop publishing in the city of Changsha, hiSoft established its Wuxi subsidiary and move localization and desktop publishing from Beijing and Shanghai to the Southern city of Wuxi. E-C Translation and Localization (Beijing) Ltd also expanded its business through its Chengdu branch.

8. International localization service companies enter China while Chinese localization service companies go to the international market.

The huge market potential and the cost advantage of human resources in China attract more global localization companies to China. Amongst the top 25 global localization service companies, over 80% set up branches in China. In 2007 and 2008, Transperfect from the US and Tek from Europe set up their branches in Beijing and enter the Chinese market of localization service.

At the same time, Chinese localization service companies have quickened their steps to develop and set up offices in the overseas market, in order to be more accessible for their clients and respond to the need of their clients. Boffin Technologies Ltd set up an office in Toronto, E-C Translation and Localization (Beijing) Ltd set up an office in the US. With the growth of Chinese localization service companies, more will develop their business in the overseas market.

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