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Is NZ a contact centre nearshore alternative for Oz?

03 Jul 2014

The concept of nearshore outsourcing is probably least mature in Asia-Pacific, owing to the region’s historically small number of demand markets for offshored contact centre services.

However, as the region’s consumer market develops, it will become increasingly important for enterprises across all verticals to access cost-effective contact centre delivery from locations closer to home, according to global analyst firm Ovum.

Ovum’s latest report discusses how Asia-Pacific nearshoring remains a mixed game for outsourcers. Australia offers the lowest-hanging fruit for nearshore outsourcing in Asia-Pacific, due in large part to the presence of offshore contact centre delivery in the country.

However, 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%.

Looking at other markets in the region, sourcing nearshore delivery for Northeast Asia remains a challenge. South Korean and Chinese outsources have made some attempts to service consumers in Japan, but this has not been on a mass scale, and the very introverted and 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.

“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," says Peter Ryan, Principal Analyst, Global IT Services and author of the report, Ovum.

A further major market is India, which remains a nearshore paradox in Asia-Pacific. Over the past decade, it 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. 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.