The Asia-Pacific (excluding Japan) business process outsourcing (BPO) market is forecast to reach $9.5 billion in 2016, up from $5.9 billion in 2011.

In 2012, BPO market in Asia-Pacific (APAC) is on pace to reach $6.45 billion, according to a study by research and advisory firm Gartner.

“The Asia-Pacific BPO market is still relatively underdeveloped and underexploited (with the exception of Australia and New Zealand) when compared with other markets or regions,” said T.J. Singh, research director at Gartner.

“This presents opportunities to BPO service providers that are willing to invest in the region. Key drivers for BPO buyers in APAC are scalability, quality, best-of-breed process and technology infusion and improved service levels. Cost continues to be a consideration in all deals. APAC is an immature market for BPO services. Not one provider dominates every type of BPO service, and few BPO providers can successfully demonstrate true regional or Pan-Asia/Pacific BPO capabilities for multiple processes,” Singh added.

Largest BPO market

The largest BPO market in APAC in 2011 was Australia, with a market size of more than $4.63 billion, over 3.5 times larger than India ($1.26 billion), the second-largest consumer of BPO services.

The fastest-growing BPO markets within APAC will continue to be led by China and India. By vertical industry, banking and financial services, communications, government (both local and federal), technology, retail, and travel and transportation continue to be the largest consumers of BPO services in the region.

APAC continues to present service providers with lucrative high-growth and profitable markets that are still relatively underdeveloped and untapped.

US, European economic malaise

Even during these trying economic times — the US and European economic malaise — buyers in Asia/Pacific are still grappling with issues such as revenue growth, market share gains, scalability, quality of service and better cost management.

Some negative impacts may surface as BPO grows across the region, including higher wage inflation and attrition, as demand for talent in the domestic market competes with offshore demand from the US and Europe.

(This article was published on September 25, 2012)
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