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Market Research Outsourcing - The India Growth Story
ValueNotes, January 2008, Pages: 98
The need to conduct market research has changed over the years primarily driven by globalization, and rise in competition, among other factors. The marketing function, which was earlier restricted to creating awareness and building differentiators among products, has expanded and become central to the creation of these new products.
Large corporates are now spending anywhere from $5 m to $100 m on market research and analysis. Research agencies too have tried to complement the changing needs of clients with professional management, consolidation and creation of value through both delivery mechanisms and interpretation. The increasing use of technology has led to standardization and consolidation in the research industry, thus preparing the ground for greater outsourcing.
The Indian MRO space comprises over 110 vendors and most of these offer ‘non-market research’ services also. However, interestingly, the leaders in the category are largely market research-focused firms and not necessarily the diversified BPO and KPO firms. Indian MRO vendors began with servicing fairly “standardized” research needs and are steadily moving up the value chain.
The author estimates that Indian MRO revenues stand at $148 m in FY07, and are expected to grow at a CAGR of 36% to touch $800 m by FY12. According to Arun Jethmalani, CEO, ValueNotes, “This period (up to 2010) will witness value growth due to capacity addition in high-end services. Initially, the services outsourced were in modular format and delivered through short-term project based engagements. However, over time vendors have begun providing services in both transactional and tactical level activities performed by research agencies. There is a clear industry trend towards “integrated” services”.
Going forward, Indian MRO companies are poised to move from research back-office operations to becoming strategic partners in executing research.
The Indian vendor landscape for MRO services is made up of
- Pure Play MRO Vendors, which are pioneers in this space like Ugam, Annik and Exevo
- Full service research firms in India like Prognosys and Tecnova
- KPOs offering services in verticals other than MRO like Evalueserve and Integreon
- Large BPOs like WNS and HCL
- Small BPO firms doing low end work like Cheers Interactive
- We expect vendors to broaden their product/service portfolio, customer base, and geographical reach while adding global service delivery capabilities.
Currently, vendors are rapidly scaling up their existing capabilities and are trying to build differentiators through specialized offerings or efficient technology platforms. A critical success factor for India as a rising destination for MRO services is acquiring and retaining talent. Says Pranav Dixit, Analyst at ValueNotes, “Acquiring and retaining talent which can provide client ready output is critical towards achieving growth plans of Indian MRO vendors. The high attrition and rising wage levels along with adverse rupee dollar ratio will impact the profitability of the segment. These factors in turn could reduce the competitiveness of India over other destinations like Philippines and Latin America”.
Partnering with other entities in the MR value chain, marketing arrangements, and partnerships for high-end analytics services, strengthening front-end capabilities will be aggressively undertaken by Indian MRO vendors. According to Neeraja Kandala, Analyst at ValueNotes, "MRO industry might witness some mergers and acquisitions post – 2009. While pure play vendors will continue to lead the MRO space; competition will intensify with the entry of large BPOs. End to end offerings will be the key to survival for pure-play MRO vendors."
The report: Market Research Outsourcing: The India Growth Story provides an overview of the buyer scenario and an in-depth analysis of the Indian vendor space along with profiles of major industry players.
The report is designed to help:
- Research companies looking to outsource/off-shore MRO services
- Large BPOs, MR software vendors exploring MRO opportunity
- Large research agencies, MR vendors like data collection agencies, programmers wanting to outsource their work
- Other potential vendors to assess opportunities in India
- MRO vendors to assess the competitive environment in India
- Venture capital companies looking for investment opportunities
- Researchers looking for detailed information on MRO services offshored to India
- This study is based on extensive interviews with key MRO vendors in India, supplemented with knowledge from secondary sources.
The Projected MRO Opportunity
- The need to conduct market research has changed over the years primarily driven by globalization, and a rise in competition, among other factors. The marketing function, which was earlier restricted to creating awareness and building differentiators among products, has expanded and become central to the creation of these new products.
- Large corporates are now spending anywhere from $5 million to $100 million on market research and analysis.
- Research agencies too have tried to complement the changing needs of clients with professional management, consolidation and creation of value through both delivery mechanisms and interpretation.
- The increasing use of technology has led to standardization and consolidation in the research industry, in turn preparing the ground for greater outsourcing.
- Today, the Indian MRO space consists of over 110 mid-sized and small vendors, most of whom offer non-market research services as well.
- However, interestingly, the leaders in the category are largely market research-focused firms and not necessarily the diversified BPO and KPO firms. Going forward, Indian MRO companies are poised to move from research back-office operations to becoming strategic partners in executing research.
- The period up to 2010 will witness value growth due to capacity addition in high-end analytics services. Data collection and data processing constitute more than half of the total revenues followed by data analysis services, research design and project management services.
1. Executive Summary
2. Research and analytics
2.1 Research and analytics
2.2 Outsourcing research and analytics
3. Global Market Research Industry
3.1 The Global Market
3.2 Market Research: Value Chain
3.3 Market Research Agencies
3.4 Trends in Global Market Research
3.5 Offshoring Drivers
4. Services Offshored
4.1 Offshoring and outsourcing in MRO
4.2 Services offshored
4.3 Current Level of Offshoring
4.4 Offshoring Maturity
4.5 Phases of Engagement
5. Indian Vendor Landscape
5.1 Evolution of Indian MRO
5.2 Indian Market Research Offshoring
5.3 Major Vendor Groups
5.4 Offshore capacity: Manpower estimates
5.5 Vendor analysis
5.6 Leveraging strengths to overcome challenges
5.7 Positioning of Individual vendors
5.8 Frontrunners in the space: Methodology for identification
5.9 Frontrunners in the space
5.10 Key industry issues
6. Trends and Insights
6.1 Revenue and employment estimates
6.2 Significant Growth Opportunities
6.3 Opportunities in "Traditionally Outsourced" Activities
6.4 Commoditization of Low-end Services
6.5 BIlling rates
6.6 Move towards Multi-service Contracts
6.7 Partnerships - a Strategic Imperative
6.8 Captives to slow down
6.9 Technology - a Must for Profitability and Scalability
6.10 M&A Activity to Intensify
7. Company Profiles
AbsolutData Research & Analytics
Annik Technology Services
Azure Knowledge Center (Styx Infosoft Pvt. Ltd)
Colwell & Salmon Communications
Dexterity KPO Services
Prognosys e Services Pvt. Ltd
Tecnova Global Pvt India Ltd
8. Vendor Directory
9. Research Methodology
10. About Us
Table of Exhibits:
Exhibit 23: Elements of Pilot Engagement
Exhibit 24: Contract Types
Exhibit 25: Indian MRO Industry - Since 2000
Exhibit 26: MRO Vendors
Exhibit 27: MRO Vendor Groups
Exhibit 28: Share of Employment in MRO
Exhibit 29: Estimates of Employment in MRO Captives by Service
Exhibit 30: Employment Share by Vendor Groups
Exhibit 31: Estimates of Employment in MRO by Services
Exhibit 32: Vendor Sample Base
Exhibit 33: Onshore Presence by Vendor Groups
Exhibit 34: Local Marketing Expertise of MRO Vendors
Exhibit 35: Front-end Capability of MRO Vendors
Exhibit 36: Employment in MRO Services by Vendor Groups
Exhibit 37: Employment by Pure Play Vendors
Exhibit 38: Employment by Vendors Across all Groups
Exhibit 39: Relative Maturity by Vendor Groups
Exhibit 40: Quality Certification by Vendor Groups
Exhibit 41: Share of Employment in MRO by Service Type
Exhibit 42: Service Emphasis of Major Vendors
Exhibit 43: Major Markets for Pure Play MRO Vendors
Exhibit 44: Typical Client Profile of Leading Vendors
Exhibit 45: Strengths and Challenges of MRO Vendor Groups
Exhibit 46: Strategies of Vendors
Exhibit 47: Frontrunners among Third Party Vendors
Exhibit 48: Emerging Players
Exhibit 49: Estimated Revenues for MRO FY07 to FY12
Exhibit 50: Employment in MRO Services to reach 32,900 by FY 2012
Exhibit 51: Data Collection and Processing Employ 70% of the Total Manpower
Exhibit 52: Opportunities
Exhibit 53: Offshore Billing Rates
Exhibit 54: Partnerships
Exhibit 55: Role of Technology in MRO
- AC Nielsen
- Annik Technology
- Cross-tab Marketing Sservices
- Market Equations
- Ugam Solutions
- CBC India
- Feedback Global
- Infiniti Research
- Market Pulse
- Market Intelligence
- Prognosys e-services
- Smart Analyst
- Manthan services
- HCL Technologies