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China has become the management consulting market with the most rapid growth rate
Last Updated(Beijing Time):2004-08-02 10:11

By Zhou Lei

There have been over 200 management consultants of BearingPoint Inc. in company' office on the 14th floor of Beijing Kerry Center.

"[The company plans to rent the adjacent 13th and 15th floors," and though the daily rent of Kerry Center is US$ 0.7 per square meter, a director of BearingPoint just shrugs, "the place is not big enough since there are newcomers joining us continuously".

Similar situation also happens in BearingPoint's offices in Shanghai and Guangzhou. In fact, during the three years since BearingPoint – an international management consulting company – entered China's market, its number of staff has rapidly expanded to as high as 1000 and BearingPoint has become a "giant" in China's consulting industry.

“It needs at least 1000 staff to meet the enterprises’demand in China's market”. Huang Hui, the president of BearingPoint China emphasizes that the next several years will be the golden age of China's management consulting industry and China's management consulting market will face more restructuring and shuffle.

At present, various transnational magnates are actively getting involved to seize the opportunity. Cap Gemini, the largest management consulting company in Europe, has recently acquired China's well-known Bexcel Management Consultants and claims that it is not impossible for the company to continue to acquire China's consulting companies. The principal in China of Roland Berger Strategy Consultants, another management consulting magnate, expresses that the company's office areas in Beijing and Shanghai will be further enlarged and its third office in China will be established in Chongqing to serve clients of the West China.

The expansion of BearingPoint seems especially conspicuous. BearingPoint came to China in August 2001. Then it acquired the consulting department of Arthur Andersen, employed over 1000 staff within less than 3 years, and established two global development centers in China. As a service provider of business consultation, system integration and management outsourcing, BearingPoint has become the one and only large management consulting company in China that is able to provide clients with "end-to-end solutions".

It is learnt that among the over 1000 staff of BearingPoint, nearly 70 percent comes from other consulting companies. However, in China's management consulting market, the annual salary of a good management consultant is as high as RMB 320 thousand! The rapid recruitment enables BearingPoint to set the gap with its rivals in the light of service team, but also greatly increases the pressures regarding the company's finance, operation and the like.

Is the speed of BearingPoint's expansion too fast? Huang Hui states that the competition between management consulting magnates has reached the climax that not to advance is to go back. Based on the precondition of sustainable development, BearingPoint needs to expedite its speed of development to the best of its ability. If the company does not develop rapidly, the space of career will not be big enough and thus the company cannot draw high-level talents. It is a significant issue concerning whether consulting companies can achieve a virtuous cycle.

"Capital is not a problem. BearingPoint's business scale and profitability are both top-level ones in China, and we obtained profits at the beginning of last year!" Huang Hui reveals that BearingPoint's next objective is that its number of staff in China will surpass 6000 in 2008. It is a typical huge-crowd strategy!

Does China’s market really need a management consulting team of a thousand staff?

It is learnt that since Chinese enterprises are not competent in terms of their overall qualities and implementing capabilities, it is often the case that some foreign consulting companies fail to adapt to China's situation, which is mostly reflected by clients' encounter with bottlenecks during the implementation of schemes.

Therefore, besides providing advice and schemes, consulting companies should further help clients to implement those advice and schemes. A project of strategic management usually needs 10 to 15 consulting staff and the implementation usually needs 20 to 40 staff. BearingPoint's largest project in China has involved a team of 80 staff. However, the return on "implementation" strategy is also striking: the implementation effects are self-evident as the strategy helps to not only increase clients’loyalty but also attract more clients. It is said that 11 out of China's top 20 enterprises have become the clients of BearingPoint.

As introduced by Dr. Eugen von Keller, President Asia of Roland Berger Strategy Consultants, in the US and European countries that together occupy three-fourth of the global consulting market, the depression of consulting industry is widely spread, and consulting companies’business volume in most Asian countries has decreased. Data provided by BearingPoint reveal that the scale of China's management consulting market increased by 30 percent to 50 percent each year in the past three years. It is estimated that the total volume of management consulting business in China reached US$ 650 billion in 2003. China has become the management consulting market with the most rapid growth rate in the world. 
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