The Asia Pacific business process outsourcing (BPO) market is forecast to reach $9.5 billion in 2016, up from $5.9 billion in 2011, according to Gartner, Inc.
In 2012, BPO in Asia/Pacific is on pace to total $6.45 billion. Asia Pacific however, does not include Japan.
“The Asia Pacific BPO market is still relatively underdeveloped and under exploited (with the exception of Australia and New Zealand) when compared with other markets or regions,” said TJ Singh, research director at Gartner adding that this presents opportunities to BPO service providers that are willing to invest in the region.
Gartner said key drivers for BPO buyers in Asia Pacific are scalability, quality, best-of-breed process, technology infusion, and improved service levels.
"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 largest BPO market in Asia Pacific in 2011 was Australia, with a market size of more than $4.63 billion, over 3.5 times larger than India ($1.26 billion), the second-largest consumer of BPO services.
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.
Even during these trying economic times — the US and European economic malaise — buyers in Asia Pacific are still grappling with issues such as revenue growth, market share gains, scalability, quality of service and better cost management.
Some negative impact 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 US and Europe, Gartner said.