Market Process Outsourcing mushrooms in India; reaches Rs 1200 crore market size

BPO, KPO and now MPO, the latest buzz word doing the rounds in Indian outsourcing market is Market Process Outsourcing. There are many questions being raised on this latest concept which is even new at the global level. Though MPO is in a very nascent stage the total MPO market in India is estimated to be around Rs.1,200 crore and this has made more MPO companies to join the party. Recently the number of companies offering these services is going up and in India earlier the MPO’s were concentrated in Southern States but now more and more companies are setting up operations in northern part of India especially NCR region.

Fierce competition is witnessed in the field of marketing with each and every company vying for attention from the customers. This puts a lot of load on the in house marketing departments. This is where MPO’s pitch in. MPO’s provide end to end marketing solutions to their clients and carry out their entire range of marketing activities ranging from advertising to pitching to sales. The biggest advantage of engaging MPO’s is that the clients need not have interface with multiple agencies like advertisement agencies, distributors etc. Generally MPO’s are hired by big multinational companies, SMB’s and start ups but the latter two contribute the most to the MPO business.

The biggest challenge that SMB’s and start ups face in the initial years is the lack of marketing might to face the onslaught of MNC’s even if they have high quality products. MPO’s like CMO Axis and Wital See Marketing are operating in this space to add teeth to the marketing efforts of SMB’s. This sector has seen tremendous growth over the years and firms like CMO Axis which was till now focusing on Bangalore and Chennai has started focusing on Delhi-NCR and Mumbai. CMO Axis which started its operations in 2009 has clocked revenue of 3.5 crore in 2012. The revenue in 2009-10 was 1.2 crores. This growth of revenue is testimony to the growth of MPO.

A pioneer in MPO, CMO Axis has aggressive plans to increase their client base from 35 to 100 and have plans of expanding to US, Middle East, Europe and Singapore. Wital See Marketing a firm based in Gurgaon which started its operations in 2011 is also becoming a major player in MPO. They are also focusing on SMB’s and have product manufacturers and real estate players as their clients. They have got 20-25 clients and expect to break even in next 2 to 3 years at a CAGR of about 25%.

Though MPO activity is said to pick up in coming years, one of the major challenges faced by MPO firms is the perception of prospective customers and clients about marketing. The clients and prospective customers still perceive marketing as a critical function of an organisation to part with and to convince them is a herculean task. This market is expected to mature in the years to come and we will see more players entering into this field offering specialised marketing services.

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