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Vietnam Emerges as a New Contact Center Outsourcing Location
New research from Frost & Sullivan identifies low employment costs as a driving factor.
Posted Sep 25, 2012
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>Vietnam's economic growth rate has been among the highest in the Asia Pacific region in recent years. With customer service becoming a key focus in Asia Pacific, Vietnam is improving customer relationships for the purpose of greater loyalty, brand recall, and profitability.

According to Dao Thi Minh Thao, a research associate in the ICT Practice at Frost & Sullivan APAC, this effort is leading to an impressive growth in its contact center industry that was estimated to be worth $4.2 million in 2011 and is expected to reach $11.4 million in 2018, with a growth rate of 15 percent.

Basic applications, like automatic call distributor (ACD), computer telephony integration (CTI), interactive voice response (IVR), and call monitoring, are still leading the trends in the Vietnam contact center market. "ACD is the biggest contributor that accounts for almost 40 percent of all applications and is still growing at a fast rate as majority of contact centers' primary purpose is to support incoming voice calls. It is forecasted that in 2018, ACD will reach the saturated status of 31.7 percent from 37.3 percent in 2011 and start to slow down. The same will happen to other current major applications, like CTI and IVR," Thao said in a statemet.

Financial services and telecommunications are among the largest contributing verticals and are likely to remain so due to an ever-increasing customer base and an adequate supply of capital to invest in new technologies and solutions. These customer-intensive industries are also characterized by large deployments of centers with 200 seats and above. This size band will grow in prominence as these two industry verticals are likely to dominate revenue contribution, according to Thao.

"Most contact center projects in Vietnam are deployed by banks, financial institutions, and telco service providers. These sectors require a high level of customer care; large seat numbers are needed to always be available to serve customers," she said.

She added, "Currently, the less than 50 seat contact centers comprise only more than 2 percent. Over time, the market is expected to see a higher growth of less than 50 seats and 51-200 seat horizontals based on the increasing demand from the SMB segment as well as more integrated, cost-effective solutions provided."

Vietnam has been established as a credible, low-cost alternative destination for offshore and outsourced services. Hiring IT professionals in Vietnam is 30 percent to 50 percent less expensive than other outsourcing countries, like India and the Philippines.

"Although the language barrier is an obvious drawback, almost 80 percent of the workforce is comprised of young, enthusiastic college graduates with science degrees that are always keen to learn. Vietnam is propelling their way up in the IT outsourcing industry," Thao said.

"For further growth and success, companies should look forward to more efficient contact center application adoption to align these trends for the future. Emerging global vendors in providing suitable solutions also need to offer more customized solutions and effective marketing activities At more affordable prices," she said.


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