Asia Pacific Business Process Outsourcing Market Size, Share & Trends Analysis Report By Service (Finance & Accounting, Human Resources, KPO, Procurement & Supply Chain, Customer Services), By End Use, And Segment Forecasts, 2019 - 2025

Report Overview

The Asia Pacific business process outsourcing market size was valued at USD 48.09 billion in 2018 and is expected to expand at a CAGR of 8.8% over the forecast period. Back-office operations and management happens to be vital for any organization. Various transactional processes, such as order fulfillment, application processing, and collection and billing, contribute toward large accumulation of data and enhanced back-office solutions are necessary to process all the accumulated data. Growing volumes of data prompt enterprises to opt for cloud computing in Business Process Outsourcing (BPO). Rapid proliferation of service delivery platforms and rising demand for outsourcing BPO services across various end-use industries is also expected to boost the regional market growth.

The players in the BPO market engage in providing reliable and cost-effective services across various industries and sectors, such as Banking, Financial Services and Insurance (BFSI), manufacturing, retail, IT and telecommunications, and healthcare, among others. The companies operating in these verticals prefer incorporating BPO as a part of their business strategy to increase their profitability. BFSI is expected to emerge as the fastest-growing segment over the next few years. BPO in BFSI addresses challenges of the BFSI industry by ensuring data management and data integrity and offers reliable, relevant, and timely data delivery to improve decision-making.

Business activities of an organization can be classified into critical activities, core activities, and non-core activities. Core activities are the company’s primary competencies that give it a strategic advantage. Critical activities require specialized skill-set. Non-core activities are supporting activities that largely involve relationship management between consumers and products. Classifying these activities is vital in order to allocate resources appropriately to ensure timely deliveries services.

Companies are placing greater emphasis on core activities to maintain their market position and to expand their customer base, which results in the outsourcing of resources for non-core activities. Companies engaging in business process outsourcing can choose to outsource specific services or business functions based on their individual requirements, including payroll, IT, logistics, and legal services. Reduction of labor costs as well as reducing and/or eliminating overheads arising from human resource and equipment are some of the potential benefits of outsourcing.

Services such as training and recruitment requires additional efforts and time. As a result, some companies opt for outsourcing human resources services. For instance, Accenture is one of the pioneers engaged in offering human resources and finance and accounting services. The company’s human resources service includes workforce performance, recruitment, payroll, benefits and compensation, and other learning and employee services. The company’s human resource services cater to clients, such as Microsoft, General Motors, IBM, and Goodyear, among others.

Services Insights

On the basis of service, the Asia Pacific BPO market is categorized into finance and accounting, knowledge process outsourcing, human resources, customer services, procurement, and supply chain, and others. The others segment is further divided into legal and tax, logistics, and training. The customer service segment was valued at over USD 11 billion and is anticipated to witness the fastest growth by 2025. Rising establishment of service centers that necessitate online and offline technical support has been fueling the segment growth. Interaction with customers opens an opportunity for strengthening the brand and developing customer relationships.

The finance and accounting segment is anticipated to witness significant growth over the forecast period. This can be ascribed to the rising presence of banking facilities and stringent regulatory requirements in the banking sector, thereby resulting in need for outsourcing services since outsourcing permits a significant reduction in the operating costs. Moreover, the human resource service segment is also anticipated to register a substantial CAGR of over 9% over the forecast period, ascribed to the rising need for resources across different sub-segments including payment processing, recruitment and relocation, administration, and other employee benefit services.

Knowledge Process Outsourcing (KPO) includes research and analytical outsourcing, such as competitive analysis, quantitative research and analytics, strategy and business development research, and risk management and analytics, among others. Rising demand for project management, market research, remote education, legal processes, data search and data integration is anticipated to spur the segment growth. Additionally, the availability of experienced and skilled professionals abroad, adoption of global standards for qualification, and improved remote project management capabilities are some of the additional factors anticipated to fuel the segment growth.

End-Use Insights

BPO industry offers its service across various end-use industries, such as BFSI, healthcare, manufacturing, IT and telecommunications, retail, and others. The other segment includes travel and transportation, government, education, construction, and utilities. BFSI held a market share of over 25% in 2018 and is anticipated to witness the fastest growth over the forecast period. Financial institutions have long considered BPO as an instrument for improving the cost-efficiency. Several domains of the BFSI industry including asset management and investment management are opting for outsourcing certain processes and are including it as a part of their business models. BPO not only offers greater cost efficiency, increased flexibility, enhanced service quality but also offers new adapted solutions to solve the challenges faced by the industry. BFSI institutions have always considered BPO as an instrument to improve efficiency and reduce operational cost. Although the market has reached maturity, the BFSI sector will witness the fastest growth over the forecast period. BFSI is projected to witness considerable growth in the forthcoming years, with the availability of new adapted solutions aimed at meeting the current digitization requirements as well as offering new value-added services.

Meanwhile, following the BFSI segment, IT and telecommunications is expected to expand at a CAGR exceeding 5% over the forecast period, owing to the growth of IT companies and rapid industrialization. Additionally, government support to improve the economy by encouraging the sectors such as banking and healthcare, is projected to boost their investments in technology. This factor is expected to fuel the BPO market is Asia Pacific. Telecom companies in the region are leveraging business process outsourcing and are adopting telecommunications outsourcing as a means to reduce cost. They outsource various business functions from call center outsourcing to billing operations to finance and accounting outsourcing. Outsourcing solutions help telecom companies to establish a flexible strategy to acquire and retain more customers, access specialized resources optimize current investments, and manage cost pressures.

Regional Insights

The regional growth is primarily led by China and India. BPO market in China was valued at approximately USD 11 billion in 2018 and is anticipated to expand at a CAGR of over 9% from 2019 to 2025. Factors such as availability of labor, increasing government investments in the BPO industry, BPO centric education, focus on enhancing communication skills of employees, improved infrastructure are expected to drive the market growth in China. In September 2019, according to the Ministry of Commerce, People’s Republic of China, business process outsourcing in China witnessed significant growth from January to August wherein the country signed numerous offshore outsourcing contracts.

Suitable geographic location and investor friendly tax structure has made India a popular outsourcing destination. Also, several BPO companies in India are expanding their presence in, Tier 2 and Tier 3 cities and are not just limiting to contact centers or call center services but are moving toward gaining high end knowledge and providing several other finance and accounting and IT services. Furthermore, rising support from government is anticipated to drive the BPO market in India. For instance, the Indian BPO Promotion Scheme (IBPS) under the Digital India Programme is focused on creating job opportunities for the growth of skilled workforce in the BPO industry.

Key Companies & Market Share Insights

The market is highly fragmented and competitive in nature. The competition results from the presence of major global players, such as Accenture, Infosys Limited, HCL Technologies, Wipro Limited, Capgemini, and Amdocs, among others. A diverse range of services allows companies to gain a competitive edge. For instance, Capgemini, one of the pioneer in the BPO industry, is engaged in offering multiple BPO services, such as financial services, supply chain and procurement, and business analytics, among others. Companies are focusing on setting up new BPO centers across the globe to expand their market presence and augment their existing customer base. For instance, in September 2017, Infosys Limited announced the establishment of a new service center in the Netherlands. This office will be engaged in providing finance and accounting and other end-to-end outsourcing services.

The major players focus on partnerships and collaborations with the objective of consolidating their market presence. For instance, in October 2014, Capgemini entered into a partnership with NetSuite. NetSuite provides cloud computing solutions worldwide. Through this partnership Capgemini launched its new virtual company that provides BPO solution. Various business solutions offered include finance and accounting, human resources, and other technology solutions.

Asia Pacific Business Process Outsourcing Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the regional and country levels and provides an analysis of the latest industry trends from 2014 to 2025 in each of the sub-segments. For the purpose of this study, Grand View Research has segmented the Asia Pacific Business Process Outsourcing market report based on service, end-use, and region:

• Service Outlook (Revenue, USD Billion, 2014 - 2025)

  • Finance & Accounting

  • Human Resources

  • Knowledge Process Outsourcing

  • Procurement Outsourcing & Supply Chain

  • Customer Services

  • Others

• End-Use Outlook (Revenue, USD Billion, 2014 - 2025)

  • Banking, Financial Services, and Insurance (BFSI)

  • Healthcare

  • Manufacturing

  • IT & Telecommunication

  • Retail

  • Others

• Regional Outlook (Revenue, USD Billion, 2014 - 2025)

  • Asia Pacific

    • China

    • India

    • Japan

    • Singapore

    • Malaysia

    • Philippines

    • Indonesia

    • Thailand