The Ring Dynasty: China's Contact Center Market Intensifies
With a 1 billion--plus population, China's presence as a burgeoning contact center market is difficult to ignore: The number of agent positions in China, for example, will increase from 124,000 in 2004 to reach 300,000 in 2009 at a CAGR of 20 percent, according to Datamonitor. Companies worldwide are paying attention.
China's focus on using contact center efforts to cater to its domestic market, coupled with its low labor costs, which are boosting the country's growing nearshore appeal for nearby locations, is helping to spur interest in China's contact center market. "The Chinese language and cultural affinity with neighboring markets [are] compelling factors for organizations in Japan, Hong Kong, and Taiwan to set up contact centers in China," says Linxi Xie, an analyst in the ICT (information and communication technologies) practice at Frost & Sullivan Asia Pacific.
China's rapidly expanding economy and evolving international economic policy, which has been greatly influenced by China's 2001 entry into the WTO, also account for part of the expected uptake in its contact center market. Improvements in business processes and customer care are two results of China's new international power to compete. "Intensifying competition since China's entry in the WTO has led to greater efficiency in operations and customer service excellence across all major industries," Xie says.
As the market expands, expect technology expenditures to increase as well. Heightened interest in multichannel operations, VoIP technology, and VoiceXML-based solutions also accounts in part for the anticipated market growth. (The number of annual VoiceXML-based IVR shipments in China will balloon to more than 66,000 by 2010, overtaking traditional touch-tone IVR systems as the dominant platform in the country, according to Datamonitor.) "When comparing VoiceXML solutions to traditional IVR across these metrics--flexibility, interoperability, performance, and TCO--VoiceXML comes out on top," says Daniel Hong, lead analyst for voice business and contact center at Datamonitor. "It's no longer a one-box hardware/software solution, but rather a software-based approach in a distributed computing environment," Hong says.
The market may also be ripe for moving beyond inbound initiatives. "One thing that characterizes the market in China is some very large [centers] mostly focus on inbound customer service applications," says Jim Foy, CEO, president, and director of Aspect Software. Aspect has more than 30 customers in China using its outbound services. Untapped markets like "small and medium enterprises will help fuel the growth through the more innovative way of offering hosted service of world-class call center technology," says Chris Chang, executive vice president of eSOON, a CRM and contact center solutions provider and distributor of Genesys products in Greater China with more than 200 enterprise customers.
But the Chinese contact center story isn't entirely wrapped up just yet. High setup capital investment, high telecom charges from lack of competition, lack of industry standards, and lack of experienced personnel are problems that the Chinese contact center market grapples with now, according to Xie. Contact center agent-training opportunities are difficult to find, she says. "Very few universities or institutions of higher learning have training courses or subjects that help students in developing a career in contact centers. Qualified individuals are also not keen on pursuing careers in contact centers."
Another development drawback is the lack of visibility through partners and distributors, however, there are Chinese companies staking a claim to the domestic market. Telecom network solutions provider Huawei Technologies competes with Alcatel, Cisco Systems, and Nortel in the digital switch and router market; companies like eSOON cater to China's contact center market, Hong says. "We expect quite a bit more from these innovative Chinese companies as they enter new regional markets and establish long- term positions by introducing new, unique products."