Hyderabad, 09 August, 2010
Burgeoning Indian consumer class to fuel demand for customer-facing services
While historically the bulk of attention has been paid to India’s status as an offshore contact center giant, most recently enterprises have noted the commercial possibilities associated with onshore domestic CRM outsourcing designed to service Indian end-users. A newly-published Ovum report highlights this potential, while adding a dose of realism in terms of the operational obstacles that prospective CRM outsourcing investors may face when entering this national market.
Ovum’s recent report ‘Profiting in the Indian Domestic CRM Market’ highlights the increased activity by third-party call center vendors in the rapidly-growing onshore market in India. According to Ovum’s projections, India’s domestic growth in CRM outsourcing will drastically eclipse that of offshore over the coming 5 years. Much of this expansion comes due to the increase in the size of India’s middle class, which is driving consumption of non-essential goods and services. This in turn is forcing enterprises to look to outsourcers in order to help maintain margin levels and customer service quality.
‘The Indian consumer is no different to that of North America, Western Europe or Australia’, stated report author and Ovum Lead Analyst Peter Ryan, ‘They are becoming much more conscious of service levels that they receive, and are willing to change vendors if interactions are not optimal. Enterprises in India are aware of this fact, and are working with CRM outsourcers as a means delivering high quality service without taking on increased overhead costs.’
One conclusion of this report that was abundantly clear was the importance India will have in the coming years, as the total size of the consumer class increases. Currently, India’s middle class is estimated at between 200-300 million people, nearly equal to the entire US population at the high end. As this segment grows, so too will its demand for products and services. According to Ryan, CRM outsourcers should position themselves as the partners of enterprises during this period of rapid growth.
‘The Indian consumer class is expanding at a very rapid rate, and for many enterprises it will be hard to keep up with the volumes of calls that they will be fielding from end-users. CRM outsourcing is an ideal way for firms across verticals in India to absorb new customers and their queries, without taking on the cost of hiring agents and buying the associated technologies and commercial properties’, said Ryan.
However, vendors looking to penetrate India’s domestic CRM outsourcing market should be wary of a number of operational particularities. Possible challenges include a large group of languages that require servicing, coupled with a lack of middle management talent in smaller centers. Further, CRM outsourcers that aim to transform existing offshore operations into domestic delivery sites may also run into difficulties, as explains Ryan below.
‘The Indian domestic contact center environment is completely different from its offshore counterpart. Costs are much more squeezed due to tighter margins, and it is simply untenable to house domestic work profitably in cities like Mumbai or Delhi. Plus, with the large number of languages requiring servicing, firms are likely to find themselves forced to set up several contact centers in various regions around the country.’
