The Evolution of Customer Support Industry in India

The Evolution of Customer Support Industry in India

There is hardly any other sector of the global economy that has grown faster than the Indian Customer Support Field. The phenomenon which started way back in the mid 90’s has now become a corporate juggernaut. Despite the so-called ‘slowdown’ in the sector during the past couple of years, the industry continues to grow around 16% per annum compared to the growth rate of 0.5% achieved by the western counterparts.

Even though there have been multiple threats to the industry ever since day one, the customer service and overall outsourcing industry have been thriving even today with the actual growth figures always surpassing the estimates.

This article will include assessment of the following points:

  1. Comparative Analysis of Customer Service Industry in India
  2. The Expected Future Trends of the Industry
  3. What will be the role of Indian Customer Service Industry at the worldwide level?
  4. What are the biggest challenges for the Indian industry?

Comparative Analysis: Customer Service Industry in India

The industry which had grown majorly during the end of 90’s had been predicted to die during the early 2000’s and later part of the same decade. There have been a number of arguments against the industry and critics have questioned the sustainability of the organized sector in the Indian context. There have been a number of competitors including Ireland, Philippines, and China which have challenged the supreme position of the Indian Customer Service Industry at a worldwide level.

However, despite the critical approach and the arguments against the growth of the industry, the Indian Customer Service Field has grown consistently over the years. Considering the following diagram:


It could be easily witnessed that the Indian IT support industry has been growing despite all the odds predicted against the country. The overall growth rate of the industry which was once more than 50% towards the end of 2008 has now slowed down. But rather than deeming it to be an actual slowdown of the processes, it should be considered as a mere reflection of the global economy as the industry is now growing at a sustainable rate of close to 15%.

Expected Future Trends

In the past couple of years, Ireland and Philippines have emerged as biggest competitors for the Indian Customer Support Industry. However, none of the countries have the promise and sustainable growth projections as compared to the Indian counterparts. Both the countries have been banking on the English language proficiency as the most important factor for outsourcing industry’s growth.

There is no doubt that proficiency in the English language is one of the most important reasons for the unprecedented growth of the Indian outsourcing sector; however, it should be noted that mere English proficiency will not help the future prospects of the outsourcing companies in the Philippines and Ireland. The Indian Customer Support Companies are blessed with highly skilled and trained workforce, especially in the IT field, which has ensured that whenever it comes to technical outsourcing, India continues to be the market leader in the field.

For example, when it comes to customer support or outsourcing in the technical fields like law, medicine, accounting, and IT, there is no better place to get the job done. Similar aspect has been shown in the following graph:


The graph is just an indication in the field of legal customer support and outsourcing growth comparison between India and Philippines. There hardly seems any doubt in anyone’s mind as to which country is the undisputed champion, when it comes to outsourcing and customer support services. Based on the historical figures, the growth story is expected to continue in the future as well. There is no doubt about the fact that India is one of the best service destinations in the past. The best part about the Indian companies and customer service departments is the fact that they are willing to learn and improve their skills based on the client’s feedback. This ensures that even in the future, the growth rates would be high and the overall development in the field will be sustainable.

Role of Indian Customer Service Industry

Indian outsourcing experts will continue to work for the overall growth and cost savings of the clients. As per an estimate, the western companies end up saving around 40-50% of the costs due to outsourcing the customer service projects here in India. As per another estimate, 400 of the top 500 companies in the world (based on revenues) outsource some part of the customer services to India. Besides this, the overall role of the Indian companies has been consistently increasing as the overall dependency of the western companies has been going up with the passage of time. Overseas companies are expected to spend some $7.3 billion this year on back-office and call centre services in India, besides the domestic firms, which plan to spend an additional $600 million.

Biggest Challenges before the Industry

There are a number of challenges which have affected the overall growth of the industry ever since its evolution. Even though the Indian Government has been supportive of the BPO industry, still due to infrastructure and bureaucracy related issues, the overall disruptions are high. The new entrants in the outsourcing field, as discussed before could be another cause of concern for the Indian companies. Besides this, the change in the political scenario back in the USA and UK has also affected the growth prospects.

However, the industry has seemingly worked over the shortcomings in the past and has come a very long way to the position where it stands today. The challenges will always be around. The most important point is to ensure that the challenges are met and addressed properly. The outsourcing industry in India had started with a few companies trusting the Indian workforce and companies to provide them with the customer support services.

From a handful of companies outsourcing the customer support services, India has now become an integral part of the business plans of all the large companies in the western world. With progressive measures and improvements in place, the overall growth of the industry is expected to be better than ever in the future.

ProcessVenue takes pride in being one of the customer support service providers working consistently for various overseas clients in the past seven years. We believe in adhering to best practices in customer support services and our workforce is well-trained and equipped with the latest technical tools for handling customer support operations.