Thailand contact center industry on the rise

Summary:Country is becoming an attractive option in Asia-Pacific, as its outlook is supported by growing domestic demand, increasing presence of multinational companies and cheap, skilled workforce.

Thailand's call center industry is stepping up as an increasingly competitive player alongside traditional outsourcing heavyweights India and the Philippines.

The country's contact center outsourcing market is estimated at US$88.5 million in 2012, and is expected to grow at a compound annual growth rate (CAGR) of 11.6 percent to reach US$151 million by the end of 2017, according to Krishna Baidya, industry manager for Asia-Pacific at Frost & Sullivan.

Among those aiming to capitalize on Thailand's market potential include Indian software service provider Servion Global Solutions, which specializes in customer interaction management software. It opened up an office there in January.

Around a quarter of Servion's revenue comes from the Asia-Pacific, the company's second-largest market behind only the U.S. Its new Thailand operations is expected to boost its Asia-Pacific revenues by another 25 per cent.

Call centers
Intense competition in various industries through services is expected to drive investments in call centers.

Domestic and international opportunities
Thailand will play a very important part in the region's growth because of the local and international opportunities it is being presented with, said Abhijit Banerjee, Servion's vice president and regional head for Asia-Pacific.

Banerjee said Thailand was experiencing a massive economic boom, especially with international opportunities being opened up. He noted the country had recently signed the Association of Southeast Asian Nations (Asean) trade treaty, which specifically paved the way for the opening of business opportunities in growth markets such as Myanmar , Cambodia and Laos.

Agreeing, Baidya said many American companies had established a presence in Thailand, owing to the U.S.-Thailand Treaty of Amity and Economic Relations, and many other multinational companies were also entering the country. 

Workforce, costs an edge
He noted that out of the international markets, the United States was a clear leader in terms of countries serviced from the Southeast Asian region.  This was in large part due to the Philippines, but many other markets such as Thailand are also competing for a piece of the pie, he added.

A large pool of computer literate professionals, good IT skills, a wide gap in personnel costs between Thailand and developed markets seem attractive propositions for outsourcing here, said Baidya. The industry manager noted the increasingly English-educated labor pool was also an edge.

Thai call centers will also stand to benefit from economies of scale with strong support from local businesses. Nearly 50 percent of the revenue for 2011 came from the domestic banking sector, while travel and hospitality are other strong growth segments for the country, he stated.

"Thai contact center outsourcers cater to the domestic market, and therefore do not face serious competition from any other country," noted Baidya.

According to Banarjee, growing competition in various industries such as in retail is expected to lead to higher investments in contact centers, especially at the Asia-Pacific level .

In terms of total number of seats, he noted the contact center industry in Asia-Pacific, which was at about 1.7 million seats in 2008, is projected to grow at a CAGR of 10.5 percent and reach over 3 million seats by 2014.  

Topics: Outsourcing, IT Employment, Tech Industry

About

Loves caption contests, leisurely strolls along supermarket aisles and watching How It's Made. Ryan has covered finance, politics, tech and sports for TV, radio and print. He is also co-author of best seller "Profit from the Panic". Ryan is an editor at ZDNet's Asia/Singapore office.

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