India KPO Industry 2011 - Slow Growth and Future Concerns

India KPO industry had seen significant affect of the Global Financial Crisis in 2008 and the Industry have slowed down but currently recovering. India still is the dominant player in the Global KPO market with 70% market share. Evalueserve estimates Global KPO industry to grow to $ 17 billion by 2014, from current $9 billion in 2011 and is expected to grow at an annual rate of approximately 24% for the next four years (2010-14). But the fact is that Evalueserve predicted Global KPO market will reach $17 billion revenue by 2011 in 2005 and this did not happen due to the financial crisis and clients cutting the KPO spend drastically. KPO firms in India would employ approximately 205,000 professionals generating revenue of $ 10 billion by 2014 from current $ 5.95 billion and 135,000 professionals in 2011. For detailed charts please click here - Evalueserve KPO Estimates.

According to Nasscom-Crisil study, knowledge services outsourcing industry in India is expected to grow at a CAGR of 22.2% over 2015 from $2 billion in 2010 and touch $5.6 billion. Globally, knowledge services landscape is expected to grow from $2.9 billion in 2010 to $7.9 billion by fiscal 2015. Business research represent a $2.2 billion opportunity. Data analytics is $1.15 billion opportunity. Legal Process Outsourcing is also expected to record robust growth of $1.3 billion by FY15. The Associated Chambers of Commerce and Industry of India has projected KPO industry’s size growing to US$ 8 billion in 2011 and 10 billion mark by 2012 with a growth rate between 25-27%. Currently, the KPO size is estimated to be around US$ 5.7 billion and the sector has grown at around 15-17% in last few years. Please click here for charts- India KPO Estimates

Significant competitive advantages in terms of low-cost offerings, skilled manpower with sales and marketing capabilities, domain expertise and knowledge of regulatory compliance attract clients.The Indian KPO providers offer a range of solutions to various industry segments such as FMCG, engineering, automobile, telecom, R&D, BFSI, etc. The range of services has expanded from initial research and analytics. And as the market has developed, variety of offerings such as legal process outsourcing and clinical trial management are included.

KPO industry is also facing the challenge of adequate talent availability and high attrition rate among young professionals. Skills shortages particularly relating to pharma clinical trials etc are major concern in India KPO. Wage inflation is another cause as India is loosing out on the lower cost advantage. Current European debt crisis and US Economic slowdown are causing concern for India KPO industry. India is also facing tough competition from China, Philippines, Sri Lanka, Poland etc, but India is expected to hold its domination of the market.

Please click here for further analysis- India KPO Industry2011 - Growth Forecast till 2015