A few years back if you asked the business heads of companies, about what all jobs could be outsourced, the answer was “everything, except marketing.” But today the outsourcing tide has taken marketing into its fold and market research is a prime candidate for outsourcing. Market Research Outsourcing (MRO) is gaining momentum in India with market-research work, including telephonic interviews, data analytics and data processing flowing out of the U.S.A. and U.K. to be handled offshore. And many Business Process Outsourcing (BPO) and Knowledge Process Outsourcing (KPO) providers are capitalizing on these opportunities apart from the boutique shops and market-research firms.
“Today a lot of U.S. firms turn to a third-party like ours, to do a market research for them, when they plan to enter a new market and want to know more about the market for a particular product. Earlier, such work used to be done by the companies themselves,” confirmed Debjani Deb, Co-founder and Managing Partner, EmPower KPO. Their customers include names like Panasonic, a global consumer electronics company that is a major user of the market-research services.
Organizations having a large number of customers, mostly in the telecom and FMCG verticals, are increasingly spending on market research and other analytical work. Today almost about 2 to 3 percent of the total advertisement spend is devoted to market research solutions in India, while globally the proportion is 10 to 12 percent.
“The potential in market research is huge in India and globally. The IT services for market research domain is a $0.6 billion market, while KPO business for this niche is almost four fold at $2.2 billion,” says Palanivel Kuppusamy, Executive Chairman, Dexterity Group, a Chennai-based KPO that specializes in the MRO space and services customers in the U.S.A., Europe and Asia-Pacific regions.
Over the last couple of years, the Indian landscape for outsourced market research has changed rapidly. While Indian boutique firms such as Ugam Solutions, Markelytics, Annik Technology and CrossTabs, specializing in this arena are preparing for growth opportunities in the Indian market, most of the global market research firms like Taylor Nelson Sofres (TNS), MarketTools, AC Nielsen, IMRB and Greenfield Online are also entering into the competition with their large captive operations in India.
According to European Society of Market Research (ESOMAR), a global association of market-research professionals, the global market-research industry is estimated to be about $21 billion, of which 50 percent can be outsourced. And the lucre of MRO can be gauged from the fact that the deal sizes are also witnessing a rise in this niche space along with the growth in the market-research industry. WNS, one of the early entrants in this forte, had signed a three-year, $100 million deal in 2004 with WPP group, one of the world’s largest media conglomerate.
And last year saw a magnanimous full-service deal worth $1.2 billion, spread over a span of 10 years, being awarded to Indian IT giant TCS from the Nielsen Company, which houses brands such as AC Nielsen and Nielsen Media Research (marketing and media information research groups). As part of the agreement, a Nielsen team based in Baroda, India was added to TCS’ KPO team to help accelerate its service delivery platform in areas of analytics and reporting, and reference data management.
However, while a majority of the market-research work, presently, being outsourced to India is in data processing and survey programming form, as maturity levels of offshore locations increase, outsourcing of other components would also grow.
