BPO sector eyes emerging markets for new locations, more growth-A A +A
Friday, August 30, 2013
TAPPING the emerging markets is the “next big thing” in the global contact center industry, a top official said.
Asheesh Mehra, who leads the Asia Pacific, Japan and Middle East region for Infosys yesterday urged the contact center players to start looking beyond the US market, saying that next biggest contributor in the global economy are the emerging markets.
“Seventy percent of offshore services come from the US market. But if we are to increase our global footprint we should not put all our investments in one basket. We need to open our eyes and look at what’s happening out there,” said Mehra during the plenary sessions of the International Contact Center Conference and Expo at the Radisson Blu Hotel Cebu.
Mehra said the next big location for contact center services are in the emerging market economies (EMEs) such as China, Russia, Mexico, Brazil, Poland, Malaysia, Indonesia, India, Russia and Thailand.
Out of the 192 countries, Mehra said, 81 of these are recognized as EMEs.
They make up 80 percent of the world’s population and contribute 70 percent to foreign exchange and 12 percent to the world’s equity market.
“We need to spread our wings and think about the next big thing. These numbers are just too big to ignore,” Mehra said, adding that some $600 billion in investments have been poured into EMEs.
An emerging market economy has low to medium per capita income and is considered a transitional market, shifting from being close to an open economy. It also records increasing local and foreign investments.
“You need to start spending at least 10 percent of your time exploring the EMEs. Start to understand their language, culture and people skills and know what these new markets can offer to you,” Mehra said.
EMEs are projected to grow by 4.9 percent this year.
In 2012, Ernst and Young noted that 21 of the 25 EMEs posted higher growth than the US economy while 24 EMEs grew higher than the Eurozone. G7 economies in the same year registered a growth of only 1.4 percent.
While tapping new markets presents many opportunities for growth, Mehra warned that the entry to these new markets would not be that easy. He advised players to look for the right partner when getting into a new area.
“Look for a partner who’s willing to take chances with you in exploring a new market.
It could be your existing clients who are satisfied with your service. What is crucial here is to create a value proposition that would make them get into these new markets,” he said.
Mehra believes the contact center industry would grow in the EMEs because business owners would need more services to be outsourced.
He is also convinced that the industry should step up and start offering complex contact center services, not only as a differentiation but also as a way to retain employees.
“We need to look beyond the voice space given that automation is here already. Technology advancement is now starting to re-shape the industry landscape affecting jobs,” he said.
“Focus on voice but bring in more data in the voice process because the new breed of employees are beginning to assess whether there are learning a new skill or not. High-value services would help address attrition in a way,” said Mehra.
Economist Bernardo Villegas, on the other hand, urged contact center companies to consider expanding or duplicating their success in the Association of Southeast Asian Nations (Asean) market.
“Ten to 20 years from now we will be seeing an integrated Asean economy that is strong enough to challenge China and India in economic supremacy. We’ve got a young demographics and a 600 million population that would strengthen our position,” he said.
Published in the Sun.Star Cebu newspaper on August 30, 2013.