Australia remained the largest market for BPO services in Asia Pacific in 2011, with a market size of more than $4.5 billion - over 3.5 times larger than India at US$1.26 billion – and the second-largest consumer of BPO services.
And, in its latest report, Gartner says the fastest-growing BPO markets within the Asia Pacific region will continue to be China and India, with the total APAC market – excluding Japan - forecast to reach US$9.5 billion in 2016, up from $5.9 billion last year.
According to Gartner’s research director, T.J. Singh, 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.”
“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.”
According to Singh, the Asia Pacific market presents opportunities to BPO service providers that are willing to invest in the region, with key drivers for BPO buyers being “scalability, quality, best-of-breed process and technology infusion, and improved service levels.”
However, he stresses that cost continues to be a consideration in all deals. “Asia Pacific is an immature market for BPO services. No one provider dominates every type of BPO service, and very few BPO providers can successfully demonstrate true regional or Pan Asia Pacific BPO capabilities for multiple processes.”
With the fastest-growing BPO markets within Asia Pacific continuing to be led by China and India, and Singh also says that 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.
“The BPO service market in Asia Pacific, excluding Japan, consists of a wide range of local, regional and multinational (including India-based) service providers. Although the market is dominated by global and India-based service providers, there are also a number of fast-growing regional and niche BPO service providers,” Singh said.
Singh defines the BPO market as consisting of four segments - that break down into many distinct sub markets - including:
• Customer management (sales, marketing and customer care)
• Enterprise services (HR, finance and accounting [F&A], operations and payment services
• Vertical services (vertical-industry-focused processes, such as mortgage services and credit card services for the banking sector, claims processing for insurance, and billing services for telecommunications) and,
• Supply management services (logistics, procurement and warehousing