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AP BPO industry to be worth US$9.5 billion by 2016

The Asia Pacific (excluding Japan) business process outsourcing (BPO) market could be worth US$9.5 billion in 2016, up from US$5.9 billion in 2011, according to a Gartner report.

The study, Market Trends: How to Profit From BPO Services in Asia Pacific, 2012, also predicts that the market is on pace to total US$6.45 billion in 2012.

“This presents opportunities to BPO service providers that are willing to invest in the region. Key drivers for BPO buyers in Asia Pacific are scalability, quality, best-of-breed process and technology infusion, and improved service levels,” said T.J. Singh, research director at Gartner.

“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,” added Singh.

The fastest-growing BPO markets within Asia Pacific will continue to be led by China and India. By 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.

Asia Pacific continues to present service providers with lucrative high growth and profitable markets that are still relatively underdeveloped and untapped.

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 U.S. and Europe.

The Gartner report classified the region’s BPO market into four main segments, including customer management, enterprise services, vertical services and supply management services.

“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,” said Singh.

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