Aegis Taps Japan, Korea Markets By Cross-Shoring

by CXOtoday News Desk    Jul 30, 2014

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Indian IT outsourcing firm Aegis is reportedly looking to expand to various global markets through a strategy known as ‘cross-shoring.’ According to a recent ET report, it will become the first Indian BPO company to crack the call centre business in the unpenetrated and insular call-centre markets of Japan and Korea.

The ‘cross-shoring’ plan involves the parent company basing native speakers of those countries at its offshore centres to offer what it believes will be a full range of potential options to customers. Earlier this month, Aegis said would sells its US, Philippines and Costa Rican centres to Teleperformance for over $600 million as it focuses on the faster-growing Asia-Pacific markets. Aegis CEO Sandip Sen also clarified that the Asia-Pacific market is an emerging one, it’s growing quickly and it makes sense to make Malaysia its base for serving countries like Korea and Japan,” told ET.

The business process outsourcing market in Asia-Pacific is expected to exceed $9 billion by 2016, according to research firm Gartner. “The Asia/Pacific BPO market is still relatively underdeveloped and underexploited (with the exception of Australia and New Zealand) when compared with other markets or regions. This presents opportunities to BPO service providers that are willing to invest in the region,” TJ Singh, research director at Gartner, wrote in a note.

Despite the enthusiasm, the company highlighted the growing challenges in the Japan and Korean markets. The countries have traditionally been insular markets and there are few in India who speak Japanese or Korean, it said.

The company is looking at bringing small groups of native Japanese and Korean speakers and base them in Malaysia for two-three year stints. “That way we can offer clients native speakers, a mix of native and non-native speakers or just nonnative speakers, depending on what they want. We can still offer a cost benefit even with the native speakers working out of Malaysia,” Sen said.

The company had earlier piloted a cross-shoring program in Coimbatore for the US market in 2012. Sen added the company is in advanced talks with a Korean player for an acquisition in that market. Since the acquisition in Malaysia, Aegis has more than doubled the headcount of that unit to 2,000 and is looking to add to its sales teams. “We already have half a dozen salespeople in Malaysia, a couple in Singapore and are looking to build teams in Japan and Korea. These are just the hunters. Then there will be presales and things like that which we are also looking to expand,” Sen said.

In addition to growing in Malaysia, Aegis is also looking to boost the headcount of its India business to about 30,000 from 21,000 by the end of the current financial year. The company is also opening centres in 9-10 tier II and III cities across the country in the coming months.