According to analyst firm Ovum, while the concept of nearshore outsourcing is probably least mature in Asia-Pacific, Australia offers the ‘lowest-hanging fruit’ for nearshore outsourcing in the region “due in large part to the presence of offshore contact centre delivery in the country”.
Peter Ryan, Principal Analyst, Global IT Services and author of the Ovum report, says, however, that New Zealand has in recent times emerged as a contact centre nearshore alternative for Australia – “not just due to the obvious linguistic, commercial, and cultural alignments, but also due to the cost discount of up to 30%.”
Ryan says the reason for the lack of maturity in the APAC nearshore outsourcing market is due to the region’s historically small number of demand markets for offshored contact centre services.
“For those outsourcers anxious to satisfy this emerging demand, the challenge will be to navigate a very disparate selection of locations in order to choose the right supply markets based on language, cultural affinity, and capability.”
Looking at markets across the Asia Pacific region, Ryan says sourcing nearshore delivery for Northeast Asia remains a challenge.
According to Ryan, South Korean and Chinese outsourcers have made some attempts to service consumers in Japan, but this has not been on a mass scale, and the very introverted and the “conservative nature of both Japanese consumers and enterprises makes it unlikely that nearshoring will become a mainstream business model in the country.”
“However, there is optimism around South Korea’s potential as a demand market for nearshore delivery, with anecdotal evidence that targeted work delivered out of China is hitting the mark in terms of price and service quality.”
Ovum and Ryan see India as a major contact centre market, but say it remains a “nearshore paradox in Asia-Pacific.”
According to Ryan, over the past decade India has emerged as among the “hottest domestic contact centre markets in the world.”
“In fact, with a consumer market exceeding 400 million people, Indian enterprises face the major challenge of how best to deliver cost-effective customer service across a large number of languages,” Ryan says.
“The question is whether this can be done at any type of scale from nearshore locations. To date, some firms (including Firstsource) have successfully leveraged Sri Lanka for nearshoring into India, and Ovum expects this trend to continue,” Ryan concludes.