For Wipro, continental Europe comes before emerging markets

Wipro sees flat to negative revenue growth from Asia-Pacific, 12% of its revenue

Information technology (IT) giant Wipro, headquartered in this city, disagrees with one aspect of the growth strategy of its peers.

At a time when most Indian IT service companies plan more attention on emerging markets (EMs), since growth in developed regions appears to have plateaued, Wipro says it has chosen continental Europe as a focus market, along with America, Britain and India.

“When you have investment dollars, you focus like crazy on areas that you can make an impact. Wherever you cannot make your impact, you don’t waste time,” T K Kurien, chief executive officer, told Business Standard. “We will keep our current clients in EMs happy; we are not exiting the market but are going after (only) very specific opportunities.”

In EMs, which include the Asia-Pacific (Apac), he said the company would mainly focus on three business segments — telecom, natural resources and retail banking.

In the quarter ended March 31, Wipro reported a 4.1 per cent quarter-on-quarter decline in revenue from the Apac region. Primarily, it conceded, due to its reduced focus on the region. In the coming quarters, the company expects flat to negative revenue growth from Apac, now 12 per cent of overall revenue. A report issued last year by PricewaterhouseCoopers says as many as 16 Indian companies are on the list of the top 100 software vendors in EMs.

“Apac, by itself, is too dispersed. We will look at specific opportunities in those areas but we won’t go out there and start canvassing for business,” said Kurien. “We have to move to continental Europe in terms of investments.” Adding: “The UK, the US and continental Europe are going to be our primary three growth engines. We think there is enough head space there.”

Wipro’s increased focus on continental Europe has starting producing benefits, said Kurien.

In 2013, the company appointed Ulrich Meister as head of business on the continent, with the mandate to chart strategy for each market in the region. Wipro had made strategic investments in continental Europe, through growth and buys, over 10 years. Nearly half its employees in the region are local hires, including region heads. It is engaging with local institutions for a graduate training programme.