The South Africa business process outsourcing market size was estimated at USD 1.4 billion at the end of the year 2019 and is projected to grow at a compound annual growth rates (CAGR) that is 13.2% from 2020 to 2027. This market’s growth is characterized by technological advancements, ongoing innovation, and increasing competitiveness, which is expected to persist over the period of forecast. The need to control the operating costs, harmonize processes, focus on core competencies, and attract skilled talent is anticipated to fuel markets in the coming years. South Africa has been home to numerous call center operations over the past few years which has led to its global acceptance as a favored and trustworthy offshore outsourcing destination.
It is also ranked as one of the leading locations when it comes to Global Business Services – or offshoring business processes. A high level of expertise, a huge population of skilled workers, lower costs, and easy-to-understand neutral English accents are some of the key factors encouraging companies to consider South Africa among their preferred outsourcing destinations. With the focus on analysis and Artificial Intelligence (AI)-driven solutions, South Africa has a larger amount of actuarial resources than India and has the ability to offer support in several languages, including French in addition to Spanish. The utilization for AI and robotics as an alternative strategy for human resources management could also help the incumbents of South Africa BPO industry. South Africa BPO industry in facing their competition in Europe and in the Middle East & Africa.
This is likely to increase the market’s growth in the near future. Additionally, Business Process Enabling South Africa (BPESA), an industry body for the Top BPO companies in Africa industry body has played an important role in abetting the industry expansion through assisting with skill development and sharing best practices and giving its members connections to business networking networks & associations that help drive this sector’s shift to the new economy of digital. Additionally to this, The South African government has introduced various tax incentives as well as schemes for the creation of infrastructure as well as support for skilled workers. One of these notable initiatives is the Monyetla Work Readiness Programme.
The major goal of this program is increasing the pool of employable entry-level employees. With it’s Monyetla Work Readiness Programme, BPO employers lead a consortia approach to recruit and train entry-level personnel. This type of initiative is creating young employment opportunities and contribute to the region’s export earnings from offshoring. This BPO business in SA is growing constantly with new opportunities for job creation and playing a significant impact on the region’s development. Outsourcing service providers think it is because South Africa enjoys better opportunities when compared to other nations in Africa for providing BPO services to businesses. Cape Town has particularly emerged as an ideal BPO destination of choice.
Services Insights
The service sector for customers dominated the market with a market share of over 31% in the year 2019 and is expected to grow at the highest CAGR of 220 until 2027. This growth is attributed to the rising number of service centers that require online and offline technical assistance. Customer service BPOs are dedicated to managing questions from customers via chat, email, phones as well as social media platforms and other channels. Customer service BPO industry is flourishing and growing in Cape Town and has risen substantially in the last couple of years, and is predicted to be a major growth area in the next few years. Furthermore, South Africa holds an advantage in providing customer support BPO services. Its capability to assist businesses lower costs with a speedy shift towards remote work operations as a result of the Covid-19 outbreak has made south africa’s centers for customer service a superiority over the other hubs.
The finance and accounting segment is anticipated to grow at a substantial growth rate of 13.6% during the forecast period. The benefit of finance & accounting BPO services in reduced cost for financial tasks is also driving their acceptance throughout a number of financial institutions in the country. South Africa is steadily advancing in the field of international services to the financial industry. Numerous financial institutions are slowly embracing South Africa for establishing their African back-office shared service hubs to be part of their global delivery networks.
End-use Insights
The segment IT and Telecommunication is the most dominant segment in the market, with a share of more than 35% in 2019. The IT and telecommunication sector is one of the leading adopters of BPO services. In the IT sector, South Africa has performed an essential function in the realm of technical helpdesk and service desk due to its extraordinary voice skills. Moreover, the country consists with a high percentage of IT graduates with necessary technical knowledge, which decreases the burden and the expense of training for businesses. South Africa continues to remain one of the top locations to outsource IT services due to the rapid growth of the cluster of businesses. These companies provide IT-focused solutions for various verticals of industry with respect to websites’ architecture and development and development of applications and platforms. The growing ICT expenditure across the country for regular maintenance of established IT and communication infrastructures as well as the replacement of outdated systems will likely fuel expansion of this segment.
This BFSI segment is expected to show the highest growth during the forecast time. A readily available skilled workforce, including Chartered Financial Analysts (CFAs), Chartered Accountants (CAs) and actuaries have been the key driver behind success for the country within this field. Furthermore, international banks are turning to South Africa for the delivery of complex banking fields, including life finance and insurance processes. The country offers a vast array of voice services within the insurance sector, including commission handling, claims processing, as well as policy administration.
Key Companies & Data on market shares
The marketplace is extremely competitive as most of the major corporations are focused on increasing their market presence by implementing various business strategies including partnerships, mergers and acquisitions as well as product development. These strategies allow companies to expand their business geographically and enhance their offerings across the world and the national. For instance, in the month of August in 2020 WNS (Holdings) Ltd launched EXPIRIUS an exclusive consumer experience (CX) solution that integrates human-assisted designs with AI-driven conversational insights to help improve customer experiences. Some of the leading players inside South Africa’s South Africa business process outsourcing market are:
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Accenture Plc
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Amdocs
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Capgemini
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HCL Technologies Ltd.
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IBM Corp.
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Infosys Ltd. (Infosys BPM)
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NCR Corp.
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Sodexo
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TTEC Holdings, Inc.
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Wipro Ltd.
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Mango5 BPO
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Indox (PTY) Ltd.
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Outworx Contact Centre
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SA Commercial
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Talksure Group
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Boomerang Marketing
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IContactbpo
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121 BPO Services
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Altron
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The IT Guys
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Merchants SA (Pty) Ltd.
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CCI South Africa
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Capita plc
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Digicall Group
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DSG Group
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Startek
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WNS (Holdings) Ltd.
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Webhelp
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O’Keeffe & Swartz
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Ignition Group
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Rewardsco
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Teleperformance SE
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Encore Capital Group
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Pra Group, Inc.
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Paschoalotto Logo
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Pioneer Credit
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Credit Corp Group
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Collection House Ltd.
Segments Covered by the Report
This report anticipates revenue growth at the national scale and also provides an analysis of the latest industry trends between 2016 and 2027 within each sub-segment. To make this study, Grand View Research has broken down in the South Africa business process outsourcing market report based on final-use and service:
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Service Outlook (Revenue USD Million between 2016 and 2027)
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Finance & Accounting
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Human Resources
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Knowledge Process Outsourcing (KPO)
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Procurement and Supply Chain
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Customer Services
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Others
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“End-use” Outlook (Revenue USD Million 2016, 2016 – 2027)
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Banking, Financial Services, and Insurance (BFSI)
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Healthcare
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Manufacturing
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IT & Telecommunication
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Retail
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Others
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