Business Process Outsourcing - China

China

Revenue in the Business Process Outsourcing market is projected to reach €21.69bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 5.99%, resulting in a market volume of €29.01bn by 2029.
The average Spend per Employee in the Business Process Outsourcing market is projected to reach €27.55 in 2024.
In global comparison, most revenue will be generated in the United States (€135.70bn in 2024).

Key regions: United Kingdom, United States, Brazil, Japan, Netherlands

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Analyst Opinion

The Business Process Outsourcing (BPO) market in China has been experiencing significant growth in recent years, driven by various factors such as the country's large and diverse talent pool, cost advantages, and favorable government policies.

Customer preferences: Chinese companies have been increasingly outsourcing their non-core business functions to third-party service providers, allowing them to focus on their core competencies and improve operational efficiency. Additionally, foreign companies have also been outsourcing their business processes to China, attracted by the country's large pool of skilled and cost-effective labor.

Trends in the market: One of the key trends in the BPO market in China is the increasing adoption of automation and artificial intelligence (AI) technologies. Many BPO service providers in China are investing in automation and AI to improve the efficiency and accuracy of their services, while also reducing costs. Another trend is the rising demand for specialized BPO services, such as finance and accounting, human resources, and customer service.

Local special circumstances: China's large and diverse talent pool is a major advantage for the country's BPO market. The country has a highly educated workforce, with a large number of graduates in fields such as engineering, science, and technology. Additionally, the cost of labor in China is relatively low compared to other developed countries, making it an attractive destination for outsourcing. Furthermore, the Chinese government has implemented various policies to support the development of the BPO industry, such as tax incentives and subsidies for BPO service providers.

Underlying macroeconomic factors: China's strong economic growth in recent years has been a key driver of the BPO market in the country. With a rapidly growing middle class and increasing disposable incomes, there has been a rising demand for goods and services, which has in turn led to increased demand for BPO services. Additionally, China's Belt and Road Initiative (BRI) has created new opportunities for BPO service providers, as the country looks to expand its global trade and investment links. Finally, the ongoing trade tensions between China and the United States have also led to an increasing number of companies looking to diversify their supply chains and reduce their reliance on China, which could potentially lead to a further boost in demand for BPO services in the country.

Methodology

Data coverage:

The data encompasses B2G, B2B, and B2C enterprises. Figures are based on enterprises' technology spending on products, consulting, and outsourcing services.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players in the industry, Statista's primary research and surveys, and IT associations. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, internet users, and telecommunication. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing method is used based on the market data characteristics. The main drivers are the GDP and its sector composition, internet penetration, the level of digitization, and the attitude toward IT security.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.