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India to become outsourcing hub for market research

Bibhu Ranjan Mishra  |  Bangalore 

From just a 600 sq ft office in Basaveshwaranagar in Bangalore, about 100 researchers, mostly MBAs, researchers and post-graduates in commerce, statistics and economics, are busy with complex market research projects for large global firms based in the US, Canada, Mexico, UK, France and Australia.
Jasal Shah, the CEO of the company Markelytics Solutions says that the small place is almost 'bursting at its seams' with projects from abroad.
"We have two shifts to deliver the projects on time. But, we feel we have to spread out to newer locations to accommodate more people as we plan to add another 150 by the end of this year," says Shah, a former IDC analyst and an early entrant to the growing market research outsourcing (MRO) space.
Over the last couple of years, the Indian landscape for outsourced market research is changing rapidly. While most of the global firms like Taylor Nelson Sofres (TNS), MarketTools and Greenfieldonline are operating large captives in India, many Indian are gearing up to tap opportunities in market research outsourcing.
India today has about 15 MR firms including large ones like Ugam Solutions, Annik Systems, Cross-Tab and Markelytics. Even BPO firms like WNS and knowledge process outsourcing firm like eValueserve have significant presence in this field.
Their customer list also includes large firms and Fortune 1000 Cross-Tab, for example, claims to be serving customers like BBC, IBM, Microsoft, MSN, Oracle, Standard Chartered, Nike among others. Markelytics claims to have successfully delivered over 300 projects for over 30 customers across the globe, including SAP, BBC, Gallo and Gallup.
"I believe it is a high growth area and outsourcing has become an integral part of the strategic planning of all major MR firms. We have been doing this since 2000 and the capability in India has matured enough to handle more and more complex tasks in the industry," said Rahul Sahgal, president & CEO of Annik Systems, a Gurgaon-based MR firm.
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 per cent can be outsourced.
The Nasscom-McKinsey ITeS report puts the opportunity in the MR domain in excess of $5 billion. Industry sources say that most of the MR firms in India are growing at more than 80 per cent year-on-year and expected to grow further in the next two years.
The lucrativeness of MR outsourcing can be gauged from the fact that Raman Roy, considered to be the pioneer of the BPO industry in India and ex-chairman & MD of Wipro Spectramind (now Wipro BPO), is among the promoters of Annik Systems. Roy has a 40 per cent stake in the company.
Looking at future opportunities, the Indian MR firms are busy strengthening their North American and European operations by roping in global experts to head their teams. Markelytics has roped in Fredrik Nauckhoff, a former president of ESOMAR, to its board. Nauckhoff, who has got over 30 years of experience in market research, will be responsible for heading Markelytics' European operations.
Cross-Tab, another Bangalore-based market research firm, recently created the post of Global CEO to be based out of the US. The company has appointed Kumar Mehta, former director-research at Microsoft's headquarters, as their global CEO.
Ugam Solutions has appointed Gregg Peterson, a former vice president of Millward Brown, as executive vice president, responsible for the North American operations. Says Peterson: "Over the past few years, India has performed spectacularly in the market research outsourcing segment. India has the right blend of talent, technology and work culture to cater to the growing needs of customers across the globe."
Adds Jasal Shah of Markelytics, "Indians are considered more analytical, with very strong knowledge of mathematics, statistics. I feel this will be an added advantage to our capabilities of timely delivering large projects and proven record in the outsourcing sector."
According to a recent research report by Kedar Sohoni and Aswin Mittal, both directors of Cross-Tab Marketing Services, over 80 per cent of the Fortune 500 are directly or indirectly looking at outsourcing large parts of their MR back-office works, including MR processes, to offshore locations like India. While a majority of the MR works presently being outsourced to India is in data processing and survey programming, as maturity levels of offshore locations increase, outsourcing of other components would also grow.
"The one area that we are yet to prove ourselves is in the computer-aided telephone interview (CATI) segment, a complex voice- and programming-based activity that has not yet gained as much acceptance as other activities. The next opportunities in this space will be more in analytics and data management. This will move companies up the value chain to provide more complex services," adds Rahul Sahgal of Annik Systems.

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First Published: Sat, May 05 2007. 00:00 IST