Outsourcing firms urged to explore new markets

CEBU, Philippines - When moving out from the domestic marketplace, companies are advised to veer away from the standard countries such as United Kingdom and United States which are usually eyed by outsourcing firms but rather engage with emerging new markets that pose higher levels of  growth opportunities.

Infosys BPO Japan and Middle East Head Asheesh Mehra encouraged companies to find “fresh” revenue channels for outsourcing and offshoring instead of limiting themselves with looking at the customary markets pursued by many.

He particularly cited that the Philippines itself is eyeing mostly to engage with United States with about 69 percent of preference when it comes to the global marketplace.

He suggested looking at different countries and industries for opportunities of growth through finding the right partner to work with or going out in the open as it possibly can.

“The first option, though, entails less risk, quick time to market and lesser pain than the second option. You have to create a value proposition for the country who seeks partner and take the risk with them. If they will have a great relationship and impression with you, they will go with you,” he said.

While others still stick their attention on UK and US for potential investments, Mehra said that they tend to overlook the brighter opportunities such as larger market and higher profitability found from emerging market economies (EMEs).

“From how we performed for the last 15 years with US and UK, our markets do not work. We have to find a way to deliver profit ourselves by moving away. Open your eyes to the opportunities that lie beyond these standard countries,” he said during the second day of the International Contact Center Conference 2013 that was held at Radisson Blu Hotel last Thursday.

These emerging markets, Mehra said, normally have an economy with a low to medium per capita income and have transitional markets in nature.

He added that outsourcing companies usually engage with these countries as they are capable of increasing their global footprint and expanse in terms of geography and industry.

These countries are also able to provide opportunities for global companies through factories and industries such as manufacturing, services and construction that are brought about by local and foreign investments.

About 80 percent out of 192 countries are EMEs, Mehra said.

He said that the commonality among EME countries lies on the sufficiency of English-speaking people to work with in the business.

Among the top list of EME countries include China, India, Russia, Mexico, Brazil, Turkey, Malaysia, Poland, Indonesia, and Thailand.

Mehra further noted that EMEs actually account 80% of the world’s population, 53% of the global Gross Domestic Product (GDP), 70% of foreign exchange, and 12% of the world’s equity market capitalization.

He added that foreign direct investments that amount to $600 billion in total go to these 81 countries.

Last year, the G7 countries like Japan, Canada, USA, UK, Italy, Germany and France posted a growth rate of 1.4%.  EMEs, on the other hand, are projected to register a growth rate of 4.9% this year.

In 2012 alone, 21 out of 25 EMEs were declared by Ernst and Young to register higher growth than US while 24 out of the same number posted higher development than the Euro zone.

Mehra said that the growth forecast for EMEs until 2015 will show a consistent trend over the years. By 2020, these emerging markets shall contribute 50% of global GDP, 38% of the world’s consumer spending and 55% of the world fixed capital.

To engage with new markets, he said that the Philippines need to innovate and differentiate itself from others.

The Philippine outsource contact centers, for instance, could adopt a strategy of catering to new languages for different markets.

To do well in the market, he said that companies who would want to compete must be strong on strategic improvisation.

“You should be flexible and experimental but always maintain strong fundamentals within. Start to make time of researching and understanding what’s in for the business in the next three years and you shall reap the benefits in the next 12 months,” Mehra stated.

Once a country dares to move from a closed to open market economy, he said that it has to take accountability for its system and growth.

Mehra then reminded companies that getting a piece of the emerging market may get difficult but recommended them to do their due diligence of knowing how to stand against competition, understanding the growth opportunity in the country and in the region, and identifying the risks involved.

He further advised businesses to be at par with other countries through language materialization and to move up the value chain by providing value-added services instead of the usual call center services.

“It is not an easy marketplace to go after. With that said, it will get hard. But the market will never go away, it will stay. So be nimble and bank on team service,” Mehra concluded. /JOB (FREEMAN)