The Indian domestic business process outsourcing (BPO) market could reach $1.4 billion in 2011, up 23.2 per cent from 2010, according to Gartner estimates. It says it will grow into a $1.69-billion market by 2012 and further to $2.47 billion by 2014.
The BPO market in India totalled $1.139 billion in 2010, a 28.6 percent increase from 2009 revenue of $885.6 million. The market's growth was driven primarily by increasing volumes in existing BPO engagements, clients expanding the scope of existing BPO relationships, and a number of new BPO deals in 2010 were from pent-up demand from 2009.
The BPO services market in Asia-Pacific and Japan is made up of a good mix of multinationals, regional and local pure-play BPO service providers; IT service providers with BPO assets and capabilities; and telecom vendors. Though the BPO market is dominated by global and India-based service providers, there are also a number of fast-growing regional and niche BPO service providers.
“Changing demographics, increasing affluence and economic growth in Asia-Pacific continues to drive shared services and BPO adoption, especially in Australia, India, Southeast Asia and China,” said T. J. Singh, research director at Gartner.
“There is growing demand for multi-country shared services and BPO services within Asia-Pacific. Buyers continue to invest in services that deliver scalable, high quality and consistent services across their geographical presence. There was significant consolidation in the global and regional BPO market in 2009 and 2010 with some large merger and acquisition (M&A) deals impacting the regional BPO service provider landscape.”
The BPO services market in Asia-Pacific (excluding Japan) reached $8.6 billion in 2010, a 21.5 per cent increase from 2009 revenue of $7 billion.
The largest BPO country market in the region is Australia, which is more than three times larger than India, the second-largest consumer of BPO services. By verticals, banking and financial services, communications, government (local and federal), technology and travel and transportation were the largest consumers of BPO services in the region.
India is one of the fastest-growing BPO market in Asia-Pacific. This segment was earlier dominated by small service providers with some local companies, such as Magus Customer Dialogue, Infovision and Andromeda. Over the past three years, many established India-based BPO service providers and U.S and Europe-based multinational BPO service providers have started focussing on the Indian domestic market. These include Omnia, Kenkei, Androemeda, Genpact, Magus, MphasiS, Intelenet Global Services, Tech Mahindra, Aegis, Spanco and HTMT.
“This phenomenon has been accentuated by the advent of the global slowdown in the U.S. and Western Europe, in which service providers who were focussing solely on the international market realised that there is merit in the Indian BPO market, given the fact that it grew rapidly even during the global economic crisis. The large and midsize players have now stepped up their activities,” said Mr. Singh.
