The Domestic BPO Market in India:
Scoring a Home Run!
The Indian domestic market has undergone a transformation over the past decade – rising from the periphery to emerge as a viable, high potential opportunity for the country’s IT-BPO sector. From a situation where the domestic business did not figure on the industry’s agenda, to now, when companies are evolving strategies targeted at building a presence in the domestic sector, the market has witnessed heightened interest from customers, as well as outsourcing services providers at a global level. It has also emerged as a silver lining for companies in today’s changing markets especially against global economic uncertainties.
As per NASSCOM’s analysis, the domestic market saw a growth of 40 per cent (26 per cent in INR) in FY2008 to clock revenues of USD 11.6 billion. With 450,000 employees currently, FY2009 estimates peg the domestic market ~ USD 13 billion, backed by a strong growth prospect, with sustained inflation as a possible medium-term risk.
Domestic BPO has emerged as a major segment in this pie. As Rajdeep Sahrawat, VP, NASSCOM says, “It was predominantly voice, but other complex processes have been added, with more in the pipeline.” He also feels, “there is very little to differentiate companies from the product point of view and therefore offering very high quality, personalised, 24x7 customer service is critical. This requires scale, flexibility and expertise”.
Domestic players have certain advantages, starting with areas like cost management and efficiencies, deeper understanding of Indian businesses, requirements and greater flexibility. The market in its current growth phase will always need niche mid-sized quality players.
In this space, since English language skills are not imperative, the market becomes relatively larger, spanning Tier-2 and 3 cities as well.