Who is going to displace India as global BPO hotspot?

It’s the South East Asian Nation, Phillipines.

Definitely not a good news for those Indians who work in Call centers fed by International Business processes.

According to Economic Times ,

India is likely to be overtaken by the Philippines as the world’s back office for voice-based customer support and sales this year. In order to keep off India’s high staff turnover, companies like Cisco, HSBC, T-Mobile and BT Group are shifting work to the South East Asian nation and thereby building an alternate support hub.

The reasons for giving preference to Phillipines over India are:

1) Better familiarity/affinity of Phillipines with the American culture
2) Lack of competing industries in phillipines for skilled workforce
3) Higher tax incentives given to companies bringing in the outsourcing business.
4) A strategy to de-risk from a pure India-based call centre model.

Numbers are here: While India’s BPO industry is expected to post $5.58 billion of voice-based revenues this year, the Philippines BPO industry is expected to be almost $5.70 billion in 2010: ( According to research firm Everest and the Business Process Association of Philippines (BPAP)).

Over all BPO Scenario Five years ahead or by 2015: Some Experts believe that if this pace continues, the Philippines will surpass India’s $12.4-billion BPO industry in five years. In the last two years, Philippines’ $9.5-billion offshoring and outsourcing industry grew at a compounded 27.6 percent, while India’s BPO industry has showed a CAGR of 11.92 percent in the last two years.

Why is the current scenario a matter of concern: India’s growing GDP and availability of other options like banks, telecom, and insurance industry are also contributing towards the growth in BPO (industry) in the Philippines. In contrast, in 2009, Filipino GDP grew at only one percent compared to India’s 7.4 percent. --------

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