Airbnb, Uber, Flipkart fuel back-office boom in India

The technology start-ups now have multi-billion dollar valuations on the back of massive funding by VC firms globally

India's back-office service providers are seeing a boom due to the disruption caused by global app-based aggregators such as Uber and Airbnb and e-commerce firms such as Flipkart and Snapdeal.

These technology start-ups now have multi-billion dollar valuations on the back of massive funding by venture capital firms globally.

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At a roundtable with Business Standard at the Nasscom BPM Strategy Summit here, industry leaders said these companies were growing business rapidly, adding new services, expanding into new territories and approaching the likes of Genpact, WNS and Aegis to manage growth. The shift is making customers in traditional segments such as travel, airlines, banking and retail look at Indian business process management (BPM) firms to help compete effectively with asset-light technology-based companies.

"They are growing so fast that wherever they have capacity, they are after all of us. At this point, it is an exciting story and the next few years will be used to create capacity to meet the demand," said Keshav R Murugesh, group chief executive of WNS Global Services and chairman of the Nasscom BPM council. "All of them tried to create in-house capabilities, but just like any other good corporation, over a period of time, they decided what was strategic to them and what wasn't."

Indian back-office firms say a few years ago, they were dismissed by these start-ups. They add at that time, start-ups had said their technology solutions would suffice and they didn't need the support of back-office firms.

"But if you see the situation now, many of us are engaged with e-commerce companies, with the Ubers of the world. We have been able to put across the fact that while they are fantastic in what they do, in managing their set of customers, providing analytics and helping in the marketing and penetration strategy, we have expertise," said Murugesh.

"These guys, some of them are growing so fast that providers are finding it difficult to keep pace. That is the reality of today's situation." Home-grown Flipkart, which has a valuation of about $15 billion, and smaller rival Snapdeal are also working with back-office partners such as Aegis. "They are telling us 'you already do the front-end and part of the back-end. Why don't you take up end-to-end, and we own the billing and customers'," says Sandip Sen, global chief executive of Aegis. "The way they have grown, they say 'we need partners to handle that growth'."