Spending on customer relationship management (CRM) by midsize businesses (MBs) in Southeast Asia is still "nascent", but the market will continue to grow at a steady pace in 2009, a research analyst has predicted.
The MB market for CRM software in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam grew 21 percent year-on-year in 2008, according to a statement released Thursday by Access Markets International-Partners (AMI-Partners). However, CRM expenditure only accounted for 12 percent, or US$24 million, of the total MB spending on software in the region last year, which amounted to US$233 million.
The boutique research house, which focuses on small and midsize business research, defines MBs as companies that have between 100 and 999 employees.
Daniel Sim, consulting and research manager at AMI-Partners, said the growth in CRM adoption by the medium-sized enterprises is largely due to their need to enhance competitiveness.
"MBs in Asean are beginning to look at CRM software as a tool to enable their companies to be more competitive, especially in the current recession," Sim explained in the statement.
Another challenging area for MBs, added Sim, was in improving profitability. On top of generating new sales, companies are also focused on retention of existing customers so as not to lose them to rivals.
"Companies with CRM deployment are in a better position to compete given the access to customers' information and fine-tuning the information into actionable plans," he pointed out.
Going forward, there will be a greater reliance on CRM deployment among MBs in Southeast Asia to ensure a competitive edge, said AMI-Partners. Despite the harsh economic climate, the CRM software market this year is expected to grow 18 percent over 2008.
Singapore has the highest usage of CRM by MBs at 18 percent, added AMI-Partners. Across the six countries, sales force automation is the favored CRM tool, followed by call center software.
According to the analyst, pay-per-use CRM or CRM offered as software-as-a-service (SaaS) is still in the stage of infancy. SaaS-based CRM made up only 1 percent of the total SaaS usage in the region. AMI-Partners said however, MBs have indicated that the low-cost and hassle-free setup are worth considering.