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Indian Domestic BPO Market Jan 2008

Indian Domestic BPO Market Jan 2008



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Published by saysamir
Survey of indian bpo sector
Survey of indian bpo sector

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Published by: saysamir on Jul 01, 2008
Copyright:Attribution Non-commercial


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Indian Domestic BPO Market –An EmergingOpportunity
January 2008
Key Findings
Indian Domestic BPO is USD 1.8Bn industry in FY2008
and is expected to grow at a CAGR of 35% for the next 4years, becoming a USD 6Bn industry in FY2012
Historically a captive market, outsourcing began in full earnest between 2003-08, with most 3
party vendors growingat over 100% to capture a 18% share of the overall market in FY2008
With the emergence of several large, proven and well-capitalized vendors, outsourcing will continue its momentum. It isexpected that 3
party vendors’ market share will increase to 30% in FY2012
goposc mare srucure wn e pary venor anscape; op payers accoun or o e r parydomestic BPO revenues in FY2008
Customer care and Sales and Marketing are the two largest business segments and accounts for over 78% of theoverall market in FY2008
Banking, Insurance and Telecom are the key industry verticals and account for 68% of the overall market in FY2008;Retail and Media and Entertainment are the emerging verticals
Because of the attractiveness of the market, many Global BPOs are entering this space, both organically and throughacqusons
We expect rapid consolidation in this industry with 8-10 large players emerging as distinct market leaders over the next18-24 months
Private & Confidential2
*FY follows April-March cycle 
Rapid growth of Indian economy over the last few years has resulted in increasedconsumption…
India’s growth has accelerated progressively since 1960s. From the ‘HinduRate of Growth’ of 3.5% up to 1980, growth accelerated to 6% following thereforms in 1980s and early 90s
Over the past four years, the GDP growth performance has been even moreimpressive, averaging 8.5% per year; and over the last fiscal it was 9.4%,
In 2006, India became the 12
largest economy at current exchange ratesand 3
largest in purchasing power parity terms
It is now widely believed that India’s growth acceleration is more structuralthan cyclical, with an investment boom and high productivity enhancing theeconomy’s productivity. Consequently India is projected to enjoy sustainable
growth rate of 8-9% till 2020.
Economic growth has brought about a spurt in per capita GDP, resulting in arapidly growing middle class. Per Capita GDP increased at a CAGR of 8.6%between FY04 to FY07.
A recent study by McKinsey Global Institute states that India will witnessraid rowth of its middle class households with disosable incomes from
GDP at Market PricesReal GDP Growth Rate
Source: Ministry of Statistics and Programme Implementation 
USD 5,000 –50,000 a year. That class, which now comprises of about 50Mnpeople (~5% of population) will enlarge to about 583Mn people (~41% ofpopulation) by 2025.
Rising incomes, the creation of a massive middle class and growingpopulation will propel India to become the 5
largest consumer market by2025. Consumption will increase at an aggregate rate of 7.3 percent
Privateconsumption2005DisposableIncomeGrowthGrowth inno. ofhouseholdsChanges insavingsPrivateconsumption2025Contribution to
annually over the next 20 years to reach nearly USD 1.7 Trillion
Source: The McKinsey Quarterly, Lehman Brothers Report titled ‘India: Everything To Play For’, Goldman Sachs BRIC Report Note: 
Private & Confidential
Source: McKinsey Global Institute, “The Bird of Gold –The Rise of India’s Consumer Market 
1.unorm excange rae o o a as een use or years 2.Financial year is March ending 

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