The APAC (APAC; excluding Japan) business process outsourcing (BPO) market may reach $9.5 billion in 2016. This forcast has come out in a report by Gartner, titled “Market Trends: How to Profit From BPO Services in APAC, 2012”.

According to TJ Singh, research director at Gartner, the APAc BPO market us still relatively underdeveloped and underexploited (with the exception of Australia and New Zealand) when compared with other markets or regions. “This presents opportunities to BPO service providers that are willing to invest in the region. Key drivers for BPO buyers in APAC are scalability, quality, best-of-breed process and technology infusion, and improved service levels. Cost continues to be a consideration in all deals. APAC 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- APAC BPO capabilities for multiple processes,” Singh said.

The largest BPO market in APAC in 2011 was Australia with a market size of more than $4.63 billion, which is over 3.5 times larger than India ($1.26 billion) - the second-largest consumer of BPO services. The fastest-growing BPO markets within APAC 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.

APAC 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 U.S. and European economic malaise — buyers in APAC are still grappling with issues such as revenue growth, market share gains, scalability, quality of service and better cost management. Some negative impacts 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 U.S. and Europe.

The BPO market consists of four segments that break down into many distinct submarkets. These four segments include:
•    Customer management (sales, marketing and customer care)
•    Enterprise services (HR, finance and accounting [F&A], operations and payment services)
•    Vertical services (vertical-industry-focused processes, such as mortgage services and credit card services for the banking sector, claims processing for insurance, and billing services for telecommunications)
•    Supply management services (logistics, procurement and warehousing

“The BPO service market in APAC (excluding Japan) consists of a wide range of local, regional and multinational (including India-based) service providers. Although the market is dominated by global and India-based service providers, there are also a number of fast-growing regional and niche BPO service providers,” Singh said.

The complete report can be found at Gartner’s website- http://www.gartner.com/resId=2036515