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Why is competition from India & the Phillipines, etc. not stronger?

 8:44 pm on Nov 9, 2009 (gmt 0)

So..a couple of days ago I saw the movie slumdog millionaire ;-) which inspired me to ask this question:

It seems there are some developing countries, where A LOT of people can speak fluent English (Im not necessarily thinking India, but also the Phillipines, Indonesia, Thailand).

The cost of living in income in such countries is often way lower than in the US or Europe.

My guess would be that poor people (as in not spoiled) are hungry (I mean it as in eager to change their situation).

So, this makes me wonder: Why isn't there way more *strong* competition from India, the Phillippines, etc.? Do most of them not have access to the www (b/c of internet cafes being too expensive maybe) - something that could change and significiantly increase the competition in the English-language markets?

It seems that most of the time I hear someone mention an Indian SEO, they complain about a strange sounding link request they got from them.

Is (a very good grasp of the) language the main problem that keeps them from totally flooding the market? (I had the impression that in some developing countries the level of English is *really* good, but maybe Im wrong?)



 7:27 am on Nov 10, 2009 (gmt 0)

Culture: you need to understand you audience
Specific knowledge: You need to know what you are covering. If the Indian widget industry is different from the US widget industry, and Indian widget expert may not have the right knowledge to write for a US audience.
Good English plus internet access: you need both.
Good English is a valuable skill, and people whose English is good are usually well educated in other ways or are affluent - they have a lot of good alternatives.


 10:13 am on Nov 10, 2009 (gmt 0)

I wonder what you mean by "competition"? Is it in competing websites? Or in traffic,etc.? If it was the latter, I guess there is significant Indian traffic for many websites that cater to an international audience, despite the very low internet penetration in India.

If it was about not having enough Indian peers or enough Indian websites, I guess it has to do with the lure of American advertisers. The money you stand to make from American traffic is way more than what you can from the same volume of Indian traffic, and probably so you see a lot of websites that seem American, but in reality are from other places like India, Philippines or anywhere else in the world.


 10:15 am on Nov 10, 2009 (gmt 0)

The big Indian consultancies seem to be cleaning up on IT development in the UK.

Some call centre work on the other hand has come back "on shore" as there has been a certain amount of push back by customers.


 10:47 am on Nov 10, 2009 (gmt 0)

In a lot of cases the problems with the off shore contact centers was not the people taking the calls, but the lack of training and resources made available to them by the company that was outsourcing.



 7:42 pm on Nov 10, 2009 (gmt 0)

I wonder what you mean by "competition"? Is it in competing websites? Or in traffic,etc.? "

I meant competing websites. please dont mistake me for a wise-guy, but..traffic isn't really competition in any kind of way, or is it?;-)

Maybe youre right that more of the websites in English are Indian, etc. and I just dont notice it b/c their grasp of English is that good.

Good English plus internet access: you need both.

Is internet access (as in spending a lot of time in an internet cafť) still too expensive for many people in those countries? (I have no idea to be honest)

Is there a good chance, that it'll become cheaper for them, and then competition in the English language SERPs might increase dramatically (once that barrier to entry dissappears)?

(hope I dont c ome off as paranoid, I'm German, in Germany and German is my mother tongue, so I dont really have that problem...but I find the topic pretty interesting!)


 8:19 pm on Nov 10, 2009 (gmt 0)

Why is competition from India & the Phillipines, etc. not stronger?

. . . okay . . . I've caught my breath now from having the biggest laugh I've had in ages . . . . not laughing at you but at the irony . . . trust me, competition from these, and many other countries is alive and well and is one of the largest complaints of providers across the board. Everyone is screaming at how "unfair" it is that providers from these countries are "driving down" the quality of services due to low pricing structures.

I don't agree with that philosophy, it's really the fault of countries exploiting these workers that have put this in motion. Truth be told, **we** are responsible for it. We demand lower prices, companies can't meet that demand if they have to pay the overhead of U.S. employees, outsourcing to "third world" countries is a matter of survival. To wit . . . when you call a huge corporate entity for support, do they answer with a clear English inflection or can you detect they are speaking from a foreign country and background?

In the context of competing web sites - you probably don't see as many because SE's generally serve results to countries based on the language of the person searching, and not as many have made English versions of their site. (Probably a speculation on my part.)

I keep referring to U.S. and English, and am aware you're from Germany, but this is how it looks from here.


 11:35 pm on Nov 10, 2009 (gmt 0)

Always glad if I can make someone laugh with a provoking post ;-).

Seriously, though, I'm aware of the fact that many IT people are scared of their jobs being outsourced to such countries.

However, whenever I hear the word "Indian" on an SEO forum, it usually goes hand in hand with something along the lines of "I got another one of those stupid link requests from India".

I remember someone from the Phillippines posting on an SEO forum mentioning she had xyz years experience in online marketing and was willing to work for 500$/month.

That just makes me wonder..those populations are so huge (India like 1 million? Not sure how high the population would be overall..if the Phillippines, etc. were included) - there must be a ton of smart and curious folks (including people in bad life situations, less spoiled than people in Germany or the US generally, who I would assume can't wait to make it out and are willing to put in the work). How come, the main thing I hear about Indian SEOs (for example) is that they (supposedly) send bad link requests, and are hoping to get jobs that pay 500$/month? (that's what I'm wondering)

Maybe those SEOs, etc. from India who are as good as I'd expect them to be..I simply don't hear about them, because their English is flawless and they're smarter than to send out wack link requests - and basically stay under the radar making their money?

PS: I hope this post doesn't come off as anti-Indian or something...I'm just wondering/curious...


 1:54 am on Nov 11, 2009 (gmt 0)

Somehow I mostly associate these low wage countries with sources of spam, fake designer products and worse, not with competition.

Why don't they get beyond what they do? Probably because it works what they do now.


 10:51 am on Nov 11, 2009 (gmt 0)

swa66, you clearly don't work for a major public company. I don't know about the Phillipines but the Indian consultancies seem to be taking over from IBM and Accenture in the UK when it comes to out-sourced development.


 2:06 pm on Nov 11, 2009 (gmt 0)

Here's a bit of info I've just dug up on the software sector in India:

The Indian Software Industry has grown from a mere US $ 150 million in 1991-92 to a staggering US $ 5.7 billion in 1999-2000. No other Indian industry has performed so well against the global competition. According to statistics, India's software exports reached total revenues of Rs. 46100 crores*. The total share of India's exports in the global market rose form 4.9 per cent in 1997 to 20.4 percent in 2002-03.

It is expected that the India Software Industry will generate a total employment of around four million people, which accounts for 7 per cent of India's total GDP, in the year 2008. Today, the Software Industry in India exports software and services to nearly 95 countries around the world. The share of North America (U.S. & Canada) in Indiaís software exports is about 61 per cent. In 1999-2000, more than one third of Fortune 500 companies outsourced their software requirements to India.

Source [business.mapsofindia.com]

* Definition: crores [en.wikipedia.org]



 1:07 am on Nov 12, 2009 (gmt 0)


I was mainly talking about competition as a webmaster, not in terms of the general IT sector.

Also where I live we don't speak English as a first language ... so letting your customers interact with anybody based in India or so isn't done all that easy.


 8:44 am on Nov 12, 2009 (gmt 0)

It takes time to build the skills and infrastructure, but it is happening. For example, Millennium IT, a Sri Lankan company, was bought by the London Stock Exchange for their technology. Millennium's trading system will be used to replace one supplied by Microsoft and Accenture that was not good enough.

One problem is the brain drain, a lot of the most skilled people can get better paid elsewhere. It makes it harder to build a skilled workforce.


 9:04 am on Nov 12, 2009 (gmt 0)

I agree with graeme_p, I'm pretty convinced that cultural differences are the main issue. If you don't understand your audience, their situations in life etc pp, you cannot build successful products for them. And: you can copy, but you can't easily learn. You've got to have lived in the culture you want to understand for many years. That's why, imho, those new products (as in innovative, not just outsourced or copied) that make it to western markets sometimes seem a bit weird, ironic or being 10 years late.
That's for the website-part. I personally wonder why there aren't more of us going to live in places that look like paradise and are extremly inexpensive while still serving western markets.


 5:49 pm on Nov 12, 2009 (gmt 0)

I personally wonder why there aren't more of us going to live in places that look like paradise and are extremly inexpensive while still serving western markets.

I have: an advantage of dual nationality.

The town I live in has lots of British people, but I have not any webmasters. Most are in hotels/tourism, real estate or building. The later two groups rip-off other British people who want to live here.


 12:33 am on Nov 27, 2009 (gmt 0)

I have lived in cheap countries while serving UK markets and its not all its cracked up to be. Home is home.


 7:59 am on Nov 28, 2009 (gmt 0)

India is very diverse..hugely so. Every part of India has its own culture. A large part of India is rural. Some parts such as the north-east are plagued by terrorism. Barring the major metros and a dozen or so cities, the rest of India isn't going to be competition for Europeans and Americans for a long time to come, if you're talking about internet entrepreneurs. This is partly because most don't have the education, background, skills, entrepreneurial zeal and the money for this.

I'm based in Mumbai, the commercial capital of India and have been running my own websites for over 10 years. I've done consulting work for several companies in Mumbai. The trouble in our society is that people are bound by convention. They're expected to confirm to stereotypes. If you work for a $5 billion software giant and get paid $16,000 a year (in rupees), that's seen as better than doing your own thing and making more because there's a sense of 'security' in working for a large company. Never mind the Satyam Computers scandal. People will fudge resumes, submit fake testimonials and even have others take their place for interviews to get a job with one of these companies. Ask them to do their own thing and very few will have the courage to do it. Most people spend four to five hours a day traveling everyday. I walk down to work every day and I make more than most of these techies but when I've tried to get any of my friends to get into their own, it has never worked! People run up huge debt in a short span of time when they have a secure job and soon they need a large amount of money every month to keep going. This makes it impossible to get into their own because that's the minimum they want to make from the first month!

The call center boom in India has ruined a whole generation. They're just sweat shops where the work doesn't really need a lot of intelligence (and that's an understatement). There's no motivation to think. Experience in call centers doesn't count when they apply for other jobs. Except for the money, it gets a person nothing! The odd hours take their toll. Many end up with pot-bellies, poor health and nothing to show for it at the end of their stint.

If there had been no call centers we might have had thousands of success stories. When I contribute to an open-source software project started by an American or European and become part of a whole community building on it, I find very few of my fellow Indians are part of such communities. I don't think that's going to change anytime soon though. Most people here seem to pursue short term agendas and don't see the larger picture. They're only looking for new cell phones, buying cars and running up credit card debt. There's no drive to achieve or create something of lasting value or being part of a community that works towards this.

There have been some major successful websites from India but even some of the biggest ones don't measure up. Most internet entrepreneurs don't have vision. The media is so ignorant that anyone starting a fancy website and talking big can get in the magazines. Right now everyone's only picking the low hanging fruit. There's demand for certain types of websites. So even the most mediocre survive and thrive.

About spam, I've found that even major websites and brand names don't understand the concept of 'permission marketing' and will shamelessly spam, giving you the 'option' to unsubscribe from their junk.

I've also found that it takes very little for people here to start getting a sense of achievement. Twenty somethings who're in their first job will show attitude and behave arrogantly without realizing that they have a really long way to go. New management graduates will throw jargon and act like they're the cat's whiskers. People are self absorbed and narcissistic. Read Indian blogs or visit social networking profiles and you'll see what I mean. I recently read about a major bank which wanted one of their new IIM (Indian Institute of Management) recruits to send out greeting cards on Diwali to their major customers and the management grad had a major ego problem about this. He had to be convinced a lot before the task was finally done. All this comes in the way of making progress.

Until the recession came along there were millions who had never seen tough times. The slow down was a reality check. Job recruiters who had been chasing all the trash suddenly stopped calling even the worthy candidates. During the boom I found that a lot of people had no desire to learn anything new. They were only interested in sending out their resume and finding bigger suckers who would hire them for more money. Many people went into therapy because of losing jobs. Some people behave like the world owes them a living. Nothing changed for me, fortunately. Traffic on my websites has increased over the past couple of years.

If you want to understand the IQ level of the average person in urban India, I suggest you watch some of the Bollywood films - they have English sub titles usually when released outside India. Bollywood fare is meant for the masses and will give you an insight. Every year we have one nomination for the Oscars which gets laughed out!

You must get some idea from the issues that shape our election outcomes. In the west you have gay marriages, pro-life and anti-life debates, healthcare concerns and other serious issues on the basis of which people vote for one candidate or another. In India, politics is usually around caste, community, hatred, dividing people, naming roads, building statues of people dead for centuries and unrealistic promises to please 'vote banks' of women, scheduled castes and others.

I recently read this book titled 'A Whole New Mind' by Dan Pink. I would recommend it to anyone here who's concerned about Indians taking over their jobs. The author talks about how left-brained jobs have been outsourced to developing countries and how right-brained work is where the future is for the western world.

You have little to fear that India will turn into a nation of internet entrepreneurs.

[edited by: vik_c at 8:03 am (utc) on Nov. 28, 2009]


 7:59 am on Nov 28, 2009 (gmt 0)

Coming from India, I still agree with Makaveli2007's comment that

However, whenever I hear the word "Indian" on an SEO forum, it usually goes hand in hand with something along the lines of "I got another one of those stupid link requests from India".

I've wondered why have I had so many instances of embarassment from fellow Indian internet marketers. Thanks to them, I was denied eligibility to join so many of programs on CommissionJunction.

But when I think of it, I can see why - there are a lot of people in need of money all over the world, including US, UK,etc. However, in these countries, the opportunity cost in having to do one of the get-quick-rich schemes including cheap SEO, click ads to make money,etc. is huge because you only get paid in cents or double-digit dollars at the max.

But in India, the exchange rate is such that, even if you do a few such schemes, you can make enough money in Indian Rupee terms. I'm not sure if anyone actually makes money with these get-rich-quick scams..But at least, we have enough reason to be lured to 'Make $10000 per month' ads.

10K dollars is what entry-level software engineers earn in two years here..


 11:05 am on Nov 28, 2009 (gmt 0)

Wow. Interesting stuff @vik_c &anand84. Thanks for the input guys!

As for left-brain vs. right-brain kind of jobs - I haven't read the book by Dan Pink, but that's something I've heard elsewhere, too. I guess for our generation it's not a bad idea to do something that can't be outsourced or automated.

Another job like that, that comes to mind is systems analyst

PS: I hope it's perfectly clear, that I was just quoting what I often hear other people say (complain) about Indian internet marketers/SEO doing on the www (spammy link requests, etc.). It's not my opinion or anything like that..just something I've read on forums quite a bit before (that surprised me, and made me wonder how come). That being said, personally I also know 2 Indian guys who truly get it...maybe 4 now ;-)


 12:10 pm on Nov 28, 2009 (gmt 0)

I must reiterate that the number of 'genuine' Internet marketers from India is more than what is perceived because most of them realize that the money is in the West. Why write on 'Mumbai politics' when you can research a bit more and write on 'New York politics'. You get paid more!

I myself contribute freelance to one such website!


 5:53 pm on Nov 28, 2009 (gmt 0)

I've wondered why have I had so many instances of embarassment from fellow Indian internet marketers. Thanks to them, I was denied eligibility to join so many of programs on CommissionJunction.

It's hard to find fault with affiliate networks that don't want to deal with internet entrepreneurs from India. Fortunately CJ started accepting Indian signups some years back. Yet the genuine webmasters lose out because of the unscrupulous ones in many cases. Getting auto-declined when you apply for affiliate programs is very common. On most occasions writing to the merchant gets a positive response. Yet that makes it somewhat tedious.

@Makaveli2007 you don't have to be defensive. I know what the general perception is like and what makes it so :)


 9:17 pm on Dec 25, 2009 (gmt 0)

India is very diverse..hugely so....

I have to completely agree with this mumbaitee.
Very well said.


 11:26 pm on Dec 26, 2009 (gmt 0)

One of our largest competitors is an Indian company. They built a site and essentially bounced onto the scene by copying recent content from competitors daily for a year. Talking tens of thousands of posts all manually copied and altered slightly. In most cases not altered at all.

They definitely have the man and brain power to compete.


 11:57 pm on Dec 26, 2009 (gmt 0)

vik_c has described it very well. I left Bombay for NZ/AU over 30 years ago but I keep in touch with the Indian web industry for personal and work reasons.

Inertia has a lot to do with it. Some skilled Indians make it their early ambition to live in the West and succeed. So we'll disregard the many celebrated examples of "American" web companies built by people of Indian origin.

The majority are either not interested in leaving or can't leave for a lot of valid reasons. The Indian market is sufficiently large for some web owners to target Indian audiences. The same goes for bricks-and-mortar businesses. Note that India did not have a recession recently.

To get back to the original question about Indian websites competing with the West...

A lot of Indian websites do precisely this but you would not know that they are Indian. I have helped one that looks like (and it is) a US law office and it is in the finance industry. Most of the time, there is nobody in its physical office location. The owner has contracted with local American lawyers to participate in his business remotely. In India he has over 50 full-time staff to do the leg work. They have a small building that they own and are moving to an even larger building soon. No Indians other than employees ever walk in their front door.

Another WW member runs an affiliate business using only AdWords. He targets the US. He has a handful of partners/staff, his own premises and is happy to stay at that level. Nobody would know from an ad that there is an India-based business behind it.

At Pubcon I have met a few similar Indian entrepreneurs so I believe that there is a significant number of "cottage industry" web players who are happy to pick up the small offshoring jobs. I am spammed at least twice a day because people think I need their services. I get at least two phone calls from the Philippines or China each month offering me either offshoring or amazing "investment" opportunities. :)

The SEO industry in India (speaking about genuine players and not small-time amateurs) appears to be good at working with a checklist and not good at custom assignments. e.g. their idea of link building is to submit URLs to a directory whose home page shows a certain PR. I operate a free, AU-only directory, so I see about 60-70% reject rate in spite of warning each registrant not to submit websites that are not AU-related. This is sometimes the fault of the poorly paid employee trying to meet a link quota and sometimes points to a lack of product design or quality control by the owner.

The point of these examples is to say that India (or name any country) has a lot of people who don't care about the big picture or excelling in their profession. Being mediocre still lets them make a comfortable living. The best part is that they don't know that they are mediocre! :) They see no need to break a sweat and build something that gets millions of Western customers and can be sold for a zillion dollars.


 12:47 am on Dec 27, 2009 (gmt 0)

I recently read this book titled 'A Whole New Mind' by Dan Pink. I would recommend it to anyone here who's concerned about Indians taking over their jobs. The author talks about how left-brained jobs have been outsourced to developing countries and how right-brained work is where the future is for the western world.

You have little to fear that India will turn into a nation of internet entrepreneurs.

That's a little outdated thinking because I met a lot of good right-brain workers in India.

Having outsourced to India and been there in the mid-90s I can say that at the time the infrastructure in New Delhi couldn't handle it. Lights going on and off all day, people commuting way out to special work zones, computer gear being tracked by guys with guns at gates, it was a freaky experience.

The engineers were very sharp but nobody had computers at home, most couldn't afford them and those that could might not have phones. One guy had been waiting for a new phone at his new place that was promised in "6 months" and that was over a year ago when I was there. Also, The phones at that time were spotty and bandwidth was VERY slow, I don't even want to think about it.

Things are changing and when the infrastructure catches up where anyone can get a PC and get online it's going to be a new developer paradigm.

But until that fine day when India picks itself up and dusts itself off, the cab driver I had for weeks who was a PhD from the University of London will probably still continue driving a cab.

[edited by: lawman at 4:21 am (utc) on Dec. 27, 2009]

subhankar ray

 3:19 am on Dec 27, 2009 (gmt 0)

There is joke in India. Please, note it is a joke..

One proud Indian father was bragging that two of his daughters were married to two stable salaried gentlemen, but he worried about his 3rd daughter because his husband owns a business, even though other two son-in-laws work for him.

It is easy to get a good wife (or husband) if you work for Intel, IBM etc. than owning your own company.

Jokes aside, a lot of good Indians practice mediation, and at peace with the world around them irrespective of their financial net-worth.

Indians are also very family oriented that could be a perceived barrier.

Improved access to capital, and efficient infrastructure will change it in coming years.


 4:27 am on Dec 27, 2009 (gmt 0)

That's a little outdated thinking because I met a lot of good right-brain workers in India.

incrediBILL, nothing I say applies to everyone in India. I'm describing the larger picture and you'll find most of my fellow Indians here will agree. There's no doubt that there is a reasonable workforce of right-brained workers in India. We have writers, authors, filmmakers, product designers, consultants in every industry etc. Yet, if it comes down to numbers and creating an industry out of it, India is never going to be on the map.

India just doesn't have standards or a desire for excellence. For instance, if you look at product design or architecture..you'll have one person deciding the look of a flyover or bridge that is projected as being path-breaking and world class. Then we'll have workers paint it like they were painting a tea-stall in their village. Our train compartments are not standardized. No two bogies are exactly the same in Mumbai. I can show you two brand new Indian cars of the same make that are not identical.

I believe this can be attributed to something like Maslow's hierarchy of needs. Until you meet the basic needs of people, they're not going to think on a higher plane. Personal security, financial security, health and well-being and a safety net against accidents/illness and their adverse impacts is the first level. Why would a worker who gets paid $2 a day give a damn whether the coat of paint he's applying is smooth when he's worrying about his hungry kids at home. This is the lowest strata of society and the most obvious example. This applies as much to the middle class and the richer class where excellence is almost never a goal.

India's priorities and yardsticks are different. If you're a brilliant sculptor or a painter and make a decent living a month, you'll get less respect (from almost anyone) than someone running a convenience store who makes twice as much and has a larger car even if he never finished school. Millions of parents push their kids to dance in reality shows on television to pre-recorded music. Those are Indian so-called 'right-brains' at work. How many of these people have ever composed an original song? When was the last time any of these people read a non-fiction book that wasn't a text book? Outside our trashy Bollywood, how many independent successful music bands do you know from India?

Some of our most talented sports persons beg for sponsors to pursue their dreams while large corporations spend billions of dollars each year on some of the dumbest television soaps ever made. Unfortunately that's where our priorities lie.

We're country of 1.2 billion people and 40% of them can't sign their name. India's problems are too many and too complex. We're going to spend 1,70,000 crores (about $35 billion) in an education program over the next few years. Rahul Gandhi, arguably the most powerful man in India has said on record that only 5% of the money the government spends, reaches the masses. The rest is siphoned out by politicians. So let's assume that $2 billion will really be put to use. That's $4 to educate every Indian. That wouldn't buy you a good pencil box in the United States.

[edited by: lawman at 4:31 am (utc) on Dec. 27, 2009]


 5:23 am on Dec 27, 2009 (gmt 0)

Amazingly Vik c that is my total perception of how India and China are developing now and I live on the East Coast of the US.

Can you give us a quick synopsis of what you know about the India pharmaceutical industry. It seems you canít purchase a generic in the US that isnít from India. India seems to be dominating that market quite well. I perceive of it as almost like the call center thing.


 6:00 am on Dec 27, 2009 (gmt 0)

I noticed the mention of Thailand... Well I live in Thailand, where my Internet connection drops if it rains, of disconnects for a few minutes if a snake farts in the yard, and you can still find wax paper used as insulation on the phone lines.

If you want an idea of the quality of IT services here... Until last week, the Thai government's own website was listed in the SERPS as 'May harm your computer'. It was riddled with malware, as are many many Thai hosted sites. Most expertise here is imported.


 12:01 pm on Dec 27, 2009 (gmt 0)

I come from the Philippines though presently living in the US (brain drain in action!), and I must say that they're still not there with regards to the Web. Access to the Web is still expensive, much less to broadband, especially for average families. They even sell pre-paid Internet access, similar to the prepaid phone cards here. You can't develop a solid web business from prepaid Internet cards!

Broadband access is still very small, with government estimates running below at 10% -- definitely below other Asian countries. The government was supposed to develop a program called National Broadband Network to create the infrastructure for broadband. However, as most things from the Philippines, development has been hampered by corruption, bribery and there was a huge brouhaha over the bidding. Philippines is wayyyyyy behind in terms of broadband development

Mobile development is huge. Texting has been in vogue in the Philippines earlier than in the US. My mom, who won't touch a computer even if her life depended on it, cannot live without her mobile phone. She types on her phone way faster than me. Everywhere you look from the street vendors to jeepney drivers, people are texting on their mobiles.

The call center business, though, is gaining the most momentum. Philippines has the advantage of language, as English is taught as early as nursery. I learned ABC alongside my ABaKaDa. Accent is easier to understand, and in fact, the more "prized" call center reps are those who can fake an American accent the best.

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