China set to grab BPO leadership position from India: XMG consulting firm

According to latest report by a Canada based consulting firm, its China and not Philippines who will take over the leadership position from India in outsourcing space. The midyear report on outsourcing industry by XMG Global, a leading research and advisory firm based in Canada says that China’s outsourcing market has exhibited largest growth when compared to its competitors India and Philippines. The report indicates that the BPO market in China will continue to grow and strive hard to overtake India as the BPO leader in the global market in next two to three years.

china-india-flag. Image source

XMG Global founded in Canada has been offering research and advisory services since 2004 for various industries. They are also trusted advisors to International governments and developing agencies helping them with technology, economic, social, health and education development objectives. Their advisory services include project management, business process consulting, technology management consulting and management consulting.

According to the report by XMG, global outsourcing industry is expected to exhibit continued growth but at a marginally lower rate when compared to previous years. This is because of the slower economic growth and rising sentiments against offshoring of jobs in America. As per the report, revenue for the industry has increased by 13.9% to reach $425 billion when compared to last year’s 14.4% increase to reach $373 billion.

The report claims that the growth rate for Philippines in terms of revenue for the last three years (2010 to 2012) was 25.4%, 23.6% and 15.7% respectively. India showed a growth rate of 13.2%, 8.6% and 7.1% for the same period and for China the growth rate at the same period was 43.5%, 63.65 and 33%. In 2010, revenue for India was $18.6 billion more than that of China and by 2012, the revenue difference dropped down to $9.4 billion which is a significant reduction.

All these figures suggest that China is growing to take over the BPO leadership position that India has been enjoying for a decade. In terms of total market share also, its China and Philippines who are showing the real growth when compared to that of India.

XMG further reports that top destinations of outsourcing activities are BRIC countries (Brazil, Russia, India and china), Indonesia and Philippines with India still holding predominant share in the global market. The report forecast the revenues to grow from $59 billion in 2011 to $63.2 billion in 2012 for Indian outsourcing market, from $45.7 billion in 2011 to $83.8 billion in 2012 for Chinese outsourcing market and $11 billion in 2011 to $ 12.7 billion for Philippines outsourcing industry.

The bottom line is that the outsourcing industry is growing but the relative position of the players in the market is changing. If the trend continues, then by 2014, China will be the leader in the BPO market and moreover there will be room for new players to share a pie of the industry threatening the position of India.

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