Cost Undercutting in the Indian Localization Market and the Rising Sustainability Questions - 1

PART I

In my maiden post under this blog, I intend to discuss my views about the most disturbing problem facing the Indian translation and localization industry from my point of view – the cost. I will be greatly obliged to have viewer comments and differing points of view about the topics covered.

What came to my mind first, was the plethora of problems facing the industry in India, and why it is taking so long to mature in a country which has taken pride in its language heritage. So I zeroed in on cost, but it is a contentious issue involving long discussions. Thus, I will divide it into three parts - the legacy pricing problems, the people who have fuelled it and where it has really lead to and the questions which now look at the industry in its face.

The Legacy

Since time immemorial, foreign companies and merchants have been keen to operate in India, earlier because India was big and wealthy, and in the present day marketplace because of the number of potential buyers.

Operating in a multi-language, multi-cultured society like India, means some serious cost. India has 22 official languages, hundreds of other languages and thousands of dialects. With over 1.2 billion people in the market, or, one-fifth of the world within one border, nobody wants to lose out. So that makes the defining factor for localization in India a no brainer too – the cost of localization.

Great Indian Price War

In this part of the world, cheaper is the name of the game and bargaining is the way of life. Around the year 1990, there were no ‘localized’ products in India. What we had were ‘translated’ products, done in-house at some advertising agencies, or by translators that these agencies could find. Translators were paid meagerly and translations were done using pen and paper.

The 90s saw a lot of technical advancement and advent of digitized output of translations. Around Y2K, localization companies, with specializations started surfacing. Microsoft paved the way for the first ever localized products for the Indian market, with 5 major languages in the first round. Languages were selected based on their user base and user community's business standing. This led to specialized rates (!) for localization, for the first time.

Once Microsoft entered the market, it was Adobe's turn to test the waters. However, some factors, more of internal than market factors made them not rush to localize their products. Google came into Indian languages towards the end part of 2000's, Yahoo, a bit earlier, and Oracle almost at the same time as Yahoo (for a learning endeavour they did for schools).

With this sudden in-flow of business, localization became the buzz word and content and language companies, even publishing houses wasted no time in securing a place in this Gold Rush. All of these wanted a pie, while sustainability and survival questions were non-existent in their minds.

Damage Done by the Not-so-Thinking Players

Since localization was a new phenomenon, and the earlier localizers were either translating for publishers/newspapers or some ad agencies, nobody understood the costs and other factors about localization. That made certain players quote prices which were far below anything done internationally. These companies/resources were not intending to be the fore-runners in the market, but were rather trying to grab a part of the localization booty one time, since there was lesser competition. That paved the way for ‘peanut pricing’ of Indian languages in the localization realm, which was here to stay.

With time, the companies who had just tried to cash-in on the sudden rush for localization in Indian languages were out of the race and new players as well as their ‘more serious’ contemporaries managed the entire scenario. However, they had an uphill task -- to push the per word value to a point where it could be acceptable and could make them survive despite mounting market pressures.

With all this new business coming, new localization techniques emerged and CAT tools were enabled for Indian languages. But whatever the changes on the business or technical front, the asking prices always remained very low, since outsourcers now knew the vulnerability – Indian companies could go back too much on price to grab business.

When Microsoft first ventured into Indian languages, they worked with very few companies. In those days, the industry was non-existent and loosely knit teams of freelancers helped some of the MS partners in getting the first jobs done. They paid translators according to the word count they could deliver, quality was often bypassed and swift and cheaper rate translation gradually gained prominence. The disorganized sector was born.

Part II

Cost Undercutting in the Indian Localization Market and the Rising Sustainability Questions - 2