Indian domestic BPO mkt to reach $1.4 bn in 2011

MUMBAI, INDIA: The business process outsourcing (BPO) market in India would reach $1.4 billion in 2011, up 23.2 per cent from 2010, says a recent report from Gartner, a provider of IT research and advisory services.

The report added that the Indian BPO market would grow into a $1.69 billion market by 2012 and increase to $2.47 billion by 2014.

The BPO market was totaled to $1.139 billion in 2010, a 28.6 per cent increase from 2009 revenue of $885.6 million, said a press release.

The outsourcing market’s growth was driven primarily by increasing volumes in existing BPO engagements, clients expanding the scope of existing BPO relationships.

BPO market dominated by India-based providers

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 services 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, the release added.

“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.

He added that there is growing demand for multicountry 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.

Singh reiterated,“ 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 $7.0 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.

Also Read: IT-BPO industry sees strong growth: NASSCOM

By vertical industry, banking and financial services, communications, government (both local and federal), technology and travel and transportation were the largest consumers of BPO services in the region, the release added.

India the fastest-growing BPO market

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, Andromeda.

Over the past three years, many established India-based BPO service providers and U.S., and Europe-based multinational BPO services providers have started focusing on the Indian domestic market, the release added.

Some of the local providers 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 focusing solely on the international market realized 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 Singh.

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