Most business and tourist visitors to China visit Beijing, Shanghai and the Pearl River Delta Megalopolis. Not many blaze a trail further afield and away from the coast. Without becoming a travel agent or spokesperson for the Chinese Tourism Industry, they are missing out.
One of the highlights of central China is of course Xian. Xian has a population of just under 9 million people, making it a tier 2 city by Chinese standards. That statistic alone is one of the many “only in China moments”. As a comparison, the city alone has more people than Switzerland, Austria, and Israel.
Xian was the site of the first capital of a unified China and is the home of the superlative, Terracotta Warriors. It is a major domestic and increasingly, international tourist location in its own right.
I wasn’t there for a holiday, I was there to see the Teleperformance contact centre capabilities and to understand the market capabilities more broadly. Teleperformance had first mover advantage in the city in terms of global contact centre providers. Convergys, Concentrix etc, are in China of course, but not Xian. It is the largest centre in China for Teleperformance which has had a very successful globalisation policy for delivery of customer experience.
The attractions of Xian are obvious.
– Average wages are about 1/3 cheaper in Xian than Beijing and Shanghai, although specific skills carry a premium.
– It has one of the largest university footprints in China
– The city is considered a magnet for central and western China, although for many reasons locals tend to not aspire to shift towards the coastal cities
– A strong innovation and manufacturing led economic basis
– City and provincial government support
– Infrastructure is modern with a strong airport and cultural offerings
Some of the challenges include
– The quality of English is much more limited than the coastal cities. You do not invest there for English skills.
– In general, there is a very Chinese culture. There are limited pools of non-Chinese skills in the market. Any that exist are not likely to be attracted by the call centre space.
– Attracting the expatriate market to the city is a tough call. The climate and environment are tough.
Overall for non-Chinese the primary role of Xian is to develop capabilities as an R&D hub. This has not gone unnoticed. Samsung has a large presence in the city, as does Emerson and other foreign entities, ZTE is one of the many local entities that have R&D based there.
China has more major cities than any other country on earth. That is of course not a surprise. The challenge is identifying what cities are the best source of skills for both local and foreign entities. Xian is one such centre. Whilst the major opportunity for contact centres has largely been successfully captured by Teleperformance, from the perspective of R&D, it has the potential to be one of the top 3-5 centres in China. Innovation has already flowed from Xian and it will continue to do so from semiconductors to battery power.