Cost-effective operations and an English speaking talent pool have driven several global firms to look at India as a base to outsource their operations. Market research firm Synovate, which has a turnover of $12 million in India, is no different. It recently introduced its offshore research division in India.
This seems like a logical extension given that the entire finance function for Synovate, which operates in 63 countries, is based out of India. The recently formed ‘marketing management analytics’ team will process advertising and media related data for global clients in the US and Europe. In the future, the company might also look at off-shoring other business groups like report writing and legal services.
Synovate India Managing Director Mick Gordon refuses to put a figure to the cost the agency will save with this move, but is quick to note the value that Indians bring to the table. “In recent years, the cost arbitrage in India is declining due to salary inflation but the availability of high quality education, excellent work commitment and the enormous growth of the economy continue to make India an interesting marketing,” says Gordon. “The company is also eyeing other segments in the future,” adds Gordon, who is excited about leading the new team of 30 people. The new group, which was earlier part of sister company Aegis Media, will now be part of Synovate. For the record, Synovate and Aegis Media operate under the Aegis Group.
Synovate, which ranks third in the $250 million market research industry, competes closely with research groups like IMRB, TNS and Nielsen. The key sectors for Synovate are automotive, fast moving consumer goods, health care and financial services.
Throwing light on the research environment in India, Gordon says that the client expectation from market research has evolved and customers are moving from vendor-based relationships to partnerships. “Now the research arm is often part of the core strategy group of a company and market research firms need to be more accountable,” says Gordon. Also, the focus on data modelling rather than only data collection has grown significantly.
Market research in India continues to be led by traditional tools like face-to-face interviews. “It is the volume driver of the business as internet penetration is still low,” says Gordon. However, the growing importance of the internet and social media has impacted the way research is conducted. “India has a large profile of young people and we cannot ignore this medium,” says Gordon. The social media platform supplements traditional research tools. Gordon also believes that the 3G revolution in India will open up a lot of opportunities and research through mobile phones will be an important channel.
Industry players feel Synovate is pretty late in the outsourcing trend which began a few years ago. For example, TNS has an outsourcing team of 2,500 people who analyse data in India. Similarly, Nielsen too set up its off-shoring team almost five years ago. However, Synovate argues that the services of the new team will go beyond data processing and scripting. “This is data that has been supplied by leading companies around the world for high level of analysis,” says Gordon. The pricing of this service makes it affordable for clients only from the Western markets.