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The back-office market in Greater China, which includes Taiwan and Hong Kong, will grow faster than India in the next five years, says a report from research firm Ovum.
While the BPO market in Greater China will increase at a compounded annual growth rate (CAGR) of 16.1 per cent between 2010 and 2015, India and South Korea growth at 15.7 per cent and 14.6 per cent, respectively.
Australia & NZ
Among the developed economies in Asia-Pacific, Australia and New-Zealand will show the highest traction with a CAGR of 7.4 per cent in the forecast period, according to a statement from Ovum.
Speaking to Business Line , Ovum analyst Ms Hansa Iyengar, said, “The major reason for the dramatic growth is that the Indian BPO sector is fairly mature than the Chinese one and as markets mature, the shift is more towards outsourcing up the value chain rather than sheer volume. Hence there will be a drop in growth rates (this can be seen when Indian BPO market is compared with say the US for example).
In fact, the BPO market of Greater China has been growing faster than the Indian market for the last few years now.
“The Chinese market is growing rapidly as enterprises in the financial services, telecoms and retail segments are massively outsourcing their back-office functions like bill /cheque processing, document management/processing, etc while Indian enterprises are looking at more complex areas such as HR/talent management outsourcing, and R&D outsourcing,” said Ms Iyengar.
The business process outsourcing or BPO market in Asia Pacific is expected to reach revenues of $17.47 billion in 2015, growing at a CAGR of 9.3 per cent from $11.18 billion reported in 2010.
key issue
In order to take advantage of the predicted growth in outsourcing, vendors will have to be cognizant of the fact that pricing of contracts is the major issue in the current scenario.
“Enterprises are moving away from multi-billion dollar, single vendor deals, and are spreading out their investments and risks.”
“Meanwhile, the small-to-medium sized enterprise segment is rapidly opening up to outsourcing and vendors need to be prepared with a game plan to meet this segments demand for low-priced, highly-flexible and scalable solutions, which are accompanied by the option to customise offerings and personalised customer service,” said Ms Iyengar.
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