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March 29, 2010

Indian BPO market to grow 19% through 2013, says Gartner

Changing demographics, focus on service quality and increasing affluence drive shared services and BPO adoption

By CBR Staff Writer

Indian domestic business process outsourcing market is expected to grow into a $1.2bn market by 2011 and $1.8bn by 2013, with estimated growth of 19% through 2013, according to IT research and advisory firm Gartner.

The Indian domestic BPO services market grew by 7.3% year on year in 2009 primarily due to the global economic uncertainty which led to some price and volume pressures.

Gartner said that changing demographics, focus on service quality and increasing affluence in Asia/Pacific continues to drive shared services and BPO adoption, especially in Australia, India, Southeast Asia and China.

In addition, there is also a growing demand for multi-country shared services and BPO services within Asia/Pacific. Last year saw significant consolidation in the global and regional BPO market, with some large M&A deals impacting regional BPO deals.

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According to Gartner, IBM has large market presence in this segment with estimated revenues greater than INR8bn, while BPO service providers 3i-Infotech, Firstsource, Perot Systems, Sitel and Wipro has the midsize market presence with revenue between INR495m and INR1.35bn. Aditya Birla Minacs, Alcatel-Lucent, Amdocs, ADP, First Data, HP, SunGard Data Systems, TCS and Tech Mahindra has small market presence with revenue between INR105m and INR365m in the segment.

TJ Singh, research director at Gartner, said: “In the short term, market trends such as changing demographics and affluence levels, consumption of value-based services, increasing focus on service quality and the continued momentum of mergers and acquisitions bear watching, as their impact is certain to influence shifts in buyer needs and behaviour.

“In the last two years, many established Indian BPO providers and some of the multi national corporation service providers focusing primarily on the international offshore services market have shifted greater focus and investments to the Indian domestic market.”

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