Growth Opportunities in Customer Experience Management Services, Asia-Pacific, 2024

Growth Drivers

• Organizations are seeking external support from subject matter experts to navigate their CX transformation process and build a solid end-to-end customer journey.
• Increasing pressure to cut costs, growing economic uncertainties, rapid technological shifts, and the complexity of managing remote operations increase the required expertise to deliver an optimal CX, pushing organizations to outsource CX services.
• The depth and breadth of CX management service provider solution capabilities, including industry-specific and technology (cloud, omnichannel, data analytics, AI, ML, and process automation) expertise, are driving adoption.
• Asia-Pacific has proven quality and reliability as a multilingual hub that delivers outstanding services and significant cost advantages.
• The growing demand from organizations to address the complexity of digital channels will increase the demand for CX management services.
• Increasing awareness and growing demand in domestic markets will boost CX management services revenue growth in Asia-Pacific.
• An increasing number of organizations viewing CX and EX as key differentiators will drive further demand for CX management services in the region.
• The need for scalability and flexibility will drive growth for CX and cloud service providers that are able to adapt rapidly to customers’ demands.
• The rising demand for blended delivery models (including onshore, offshore, nearshore, and remote agents) will push organizations to partner with service providers with a global footprint.

Growth Restraints

• Organizations are proactively reducing incoming calls to contact centers using automation, AI, and self-service tools.
• Increasing commoditization and price-based competition are likely to take place in low-value and entry-level CX services, such as technical support, customer service, and sales assistance.
• Challenges due to ongoing geopolitical conflicts and elevated inflation and interest rates are making organizations cautious in their IT investment plans and tightening their IT spending budgets.
• The anticipated weakening of consumer demand driven by high inflation will remain a critical growth restraint.
• Economic headwinds increase pressure to cut costs, causing companies to explore more value-based options and shorter-term contracts.
• Some organizations still consider customer service a cost to the company and regard outsourcers as brokers of labor arbitrage-based solutions instead of viewing them as partners that can add substantial value and enhance CX outcomes.
• The ongoing shift to digital transactions opens the door to non-traditional, digital-focused competitors, challenging the outsourcing services industry status quo.
• Increasing competition from non-voice service providers (for example, technology consulting firms such as Accenture and Deloitte) is adding competitive pressure for traditional CX management service providers and impacting market growth.