NetSol and White Clarke have
both entered developing markets. Antonio Fabrizio examines local
competition and how they have faced up to local
difficulties.
With the crisis hitting all mature
leasing markets, some software houses are looking to opportunities
provided by emerging countries as potential new marketplaces for
their products.
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White Clarke Group (WCG) and NetSol
Technologies are two such cases. Despite the differences between
the two – WCG just opened a new office in Turkey, while NetSol has
expanded its existing team in China – both companies conducted
extensive research before making their first moves.
According to Ayub Ghauri, NetSol’s senior
vice-president, the company – which entered the Chinese market in
2005 – took various factors into account before entering. These
included the need for localized systems, the opening up of the
local leasing industry and the need for compliant systems with
Chinese regulations.
“With the auto industry rapidly expanding and
about 1.5 million vehicles making it to the road each month, the
market seemed ripe to target the auto finance industry,” Ghauri
said.
He added that the competition in the leasing
and finance IT solutions industry in China has become “quite mature
and intense” over the years, with other companies present in the
market aggressively marketing their solutions.
For WCG, it took over a year of research to
decide to enter the Turkish market.
Peter Kainradl, MD of WCG Europe, explained:
“For me, the first element to consider is that there must be a
desire in that market for a new entrant, which was clearly
there.”
Kainradl’s team did a lot of research work
with FIDER, Turkey’s leasing association, to identify existing
players, market segments and suppliers – creating a country report
that will be made available to international lessors interested in
entering Turkey.
WCG also identified the need for a team with
“local expertise” and the choice fell on Nazli Civelek, who
Kainradl described as “extremely knowledgeable of the Turkish
market”.
Currently she is the only person in the
Turkish office, but WCG is recruiting two more people and then will
look at further expansions following the development of the
situation.
In Turkey, the competitive landscape is
extremely varied. As Kainradl pointed out, apart from local and
international software houses, the main challenge comes from
in-house solutions developed by lessors. One such example is
Garanti Leasing. Turkey’s largest leasing company has an in-house
solution developed by Garanti Technology, another subsidiary of the
Garanti group.
NetSol’s team in China, on the other hand, has
increased over the years, and now comprises six permanent members –
four being native – and another 15 professionals on standby for
permanent placement.
Both companies have worked meticulously so
that their products meet local needs. For NetSol, this mainly meant
customised applications and the ability to meet Chinese leasing
companies’ stringent project timelines.
Ghauri commented: “NetSol has acquired a deep
understanding about the best practices and regulatory factors
involved in the Chinese finance industry. The need for solutions
with Chinese language readiness was also strongly prevalent in the
Chinese market, which was successfully identified and delivered by
NetSol.”
Kainradl added that an advantage for
international providers like WCG is combining products which are
proven to work in multiple marketplaces with a step-by-step
approach to creating specific products for the new marketplace.
As far as customers are concerned, NetSol has
already an extensive array of clients – with the most recent wins
in China being Minsheng Financial Leasing, Guangzhou Automobile and
Volvo Automotive Finance – and plans to further consolidate its
position.
WCG, on the other hand, is still at an early
stage of development, but is already in talks with a number of
perspective clients and hopes to close a number of deals by early
2010.
It also plans to strengthen its international
customer base in Turkey, with a particular attention to Greek
lessors – many of which also operate in Turkey – in view of the
fact that it could then open an office in Greece, too.
Both companies are also carefully considering
all the main obstacles within these markets. One, of course, is to
achieve credibility in that market, which for Ghauri can only be
attained with time. The most important, however, is to remain
profitable.
Which can be a challenge, as Kainradl pointed
out: “Wherever you go in an emerging country, you are working in a
low-cost market. That is our biggest challenge, to make the numbers
meet.”
