Asia-Pacific represents exciting growth for all Contact Center Vendors
Published on: 5th Jun 2008
Note -- this news article is more than a year old.
Dynamic growth is being predicted for both the number of contact centers and customer service agent positions in Asia Pacific. Market analysis firm Datamonitor puts this down to a combination of a growing middle class in China and India, the expansion in demand for products and services and the increase in offshoring. According to the report, which covers India, China, Australia, Japan and South Korea, this will lead to the creation of four times as many new contact center agent positions (APs) in developing markets over the next four years as in developed markets.
"Vendors will need to carefully strategize which country and which vertical markets their sales and marketing teams are to target if they want to generate profitable revenue growth", says Mona Sultan, Customer Interactions Technology analyst with Datamonitor and author of the study. A heterogeneous mÉ©lange of cultures, languages, consumers and countries characterizes the Asia-Pacific contact center market. Understanding the full range of macroeconomic, social and business trends in APAC is therefore vital for vendors creating successful go-to-market strategies."
The middle classes are growing in size and purchasing power in India and China.
India and China currently represent over one third of the world's population. India has traditionally been perceived as an underdeveloped nation, yet all market projections indicate its middle class, and its income, are set to increase substantially. The same is true of China; recent reforms have put China back on the global trade map. The consequence of the reforms is an exploding Chinese middle class, leading to an increase in income and an increase in the consumption of goods and services.
"But this poses a challenge for enterprises", says Sultan. "Enterprises need to not only tap into this emerging demographic but to retain their loyalty. What we are seeing in India, for example, is that APs are set to increase significantly from 370,000 in 2006 to 567,000 in 2012 - a compounded growth rate (CAGR) of 5.6%."
Developed nations, like Japan, South Korea and Australia, present challenges to the contact center vendor
When you operate in a developed nation you can sometimes reach a plateau - how do you continue to generate new revenue from a saturated market? This is of key concern for many vendors that have operations in developed APAC nations. A second key concern is culture; when North American enterprises move into Japan and South Korea there are often cultural confusions.
The developed countries in the Asia-Pacific region have strong economies, a strong technological infrastructure and a growing need to service a sophisticated consumer base. Despite deflation issues and intense competition amongst contact center vendors, Australia's kangaroo economy keeps bouncing along. In contrast Japan's once frail economy has strengthened in recent years. Despite falling wages, Japan's economic expansion of the past few years has dramatically increased the demand for labor. This has increased the demand for consumer goods and services. "And in South Korea we see cutting-edge communications technologies being used in everyday business, in the corporate world and among consumers. This is a very promising economic climate for contact center vendors," says Sultan.
Investing in Asia-Pacific will reap long-term rewards
Much has been said about the credit crunch facing enterprises in North America and in some parts of Western Europe. Organizations need to geographically diversify their portfolios, not only to spread risk but to generate new revenue.
"We can already seeinternational telecoms operators investing in India and China to grow market share. Vodafone, South Korea's SK Telecom and Spain's Telefonica are all purchasing shares in Chinese companies in the hope of sharing the rewards of China's growing economy."
The stakes in China Netcom and China Mobile may be small, but international operators can have significant influence. International operators and their contact center vendors can take advantage of opportunities in China's upcoming telecom restructuring which will positively impact contact center technology spend.
"Similarly, we see that contact center vendors are starting to cross-fertilize by applying their experience in one market to other less saturated industries. An example is seen with the manufacturing industry in Japan. It can be a difficult market to break into, but contact center vendors can gain much from entering it. This Japanese industry is facing stiff competition from China leading firms to develop and design more sophisticated products." Making the staff more efficient in how they handle customer enquiries will be a prime objective for Japanese manufacturers, and a significant opportunity for contact center vendors.