The Asia Pacific (excluding Japan) business process outsourcing (BPO) market is forecast to reach US$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.

“The Asia Pacific BPO market is still relatively underdeveloped and underexploited, with the exception of Australia and New Zealand, when compared with other markets or regions,” said T.J. Singh, research director at Gartner.

“This presents opportunities to BPO service providers that are willing to invest in the region. Key drivers for BPO buyers in Asia Pacific are scalability, quality, best-of-breed process and 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.”

The largest BPO market in Asia Pacific in 2011 was Australia, with a market size of more than US$4.63 billion (A$4.5 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.

Gartner defines the BPO market in 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); and
• Supply management services (logistics, procurement and warehousing

“The BPO service market in Asia Pacific (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, “said Mr. Singh.