The global customer relationship management (CRM) and contact centre market is experiencing continuous growth and expansion, and South Africa is emerging as an influential player in this space. The country's competitive labour costs, multilingual workforce and advanced telecommunications infrastructure have made it an attractive outsourcing destination for multinational companies seeking to optimise their customer service operations.
A closer look at the South African contact centre outsourcing market reveals that the industry makes a significant contribution to the overall market. Although the main business activities are based in South Africa, the country’s success extends far beyond the country’s borders, contributing to a notable export volume of approximately $104m annually. The sources of these revenues are primarily rooted in outsourcing contracts, with a significant portion originating from key markets such as the United Kingdom, the United States and Australia.
In this blog post, we will look at some of the key findings from the PwC Global Service Study 2023 to explore the size and opportunity of the global CRM market and the competitive advantages that have propelled South Africa to the forefront.
The expanding global CRM and contact centre market
Globally, the CRM and contact centre market is currently estimated to be valued at $353bn, with the in-house business accounting for 70% and the outsourcing segment making up the remaining 30%, corresponding to an absolute value of $106bn.
- A closer analysis of the regional distribution reveals North America as the largest market, commanding a 42% share.
- Europe emerges as the second-largest market, with a 24% share.
- The Asia-Pacific region also holds a substantial 23.5% share of the market, indicating the region's growing significance and potential.
- South America (6%) and the MEA region (4.5%) contribute to the market, although hold comparatively smaller market shares.
The global CRM and contact centre outsourcing market is expected to grow at a CAGR of around 3.7% from 2021 to 2025. Factors contributing to this upward trend include the post-pandemic recovery, the stabilisation of the global supply chain network, increased product demand coupled with higher market prices and increased personnel costs.
A deep dive into the South African CRM and contact centre market
As the global CRM and contact centre market continues its steady expansion, the South African landscape offers a fascinating perspective and is poised to emerge as the next frontier for business process outsourcing (BPO) services.The PwC Global Services Survey 2023 illustrates the wealth of untapped potential within this dynamic African market, with South Africa serving as a shining example of the transformative opportunities that lie ahead.
South Africa's BPO services sector has experienced a remarkable upswing, recording an impressive 8.3% expansion in 2021 and reaching a total value of $5.12bn. This upward trajectory is expected to continue, with the sector projected to reach $6.53bn by 2026. This growth is underpinned by seven key growth factors as illustrated below:
BPO providers in South Africa offer companies cost-effective solutions that meet clients’ diverse needs and significantly reduce costs associated with onshore or specialised offshore alternatives. These notable cost decreases are partially attributed to the competitive labour expenses, which are approximately 50% lower than its counterparts.
The mentioned favourable offering is seamlessly coupled with competent round-the-clock support, ensuring customers a reliable and consistent service experience. Adding to this advantageous landscape is an extensive pool of English-speaking talents with a neutral accent. Hence, South Africa’s linguistic edge makes it the third most popular destination for English-speaking services, reinforcing its appeal as a prime hub for global outsourcing efforts.
Looking ahead, the opportunities for growth in the South African and broader African BPO market are vast. As companies seek to optimise costs, enhance customer satisfaction and leverage the latest technological advancements, the South African BPO landscape is poised to play a pivotal role. Organisations can capitalise on the unique strengths of the South African and African BPO landscape, unlocking new avenues for success in the rapidly evolving customer service landscape.
South Africa's emergence as the next frontier
The global CRM and contact centre market is experiencing robust growth, driven by factors such as post-pandemic recovery, supply chain stabilisation and increasing product demand. Within this landscape, South Africa is emerging as a highly attractive destination for BPO services.
As companies continue to prioritise cost optimisation, customer satisfaction and technological advancements, the South African and broader African BPO markets present vast untapped opportunities. By capitalising on the region's unique strengths, organisations can unlock new avenues for success in the rapidly evolving customer service landscape, cementing South Africa's position as the next frontier for global CRM and contact centre outsourcing services.
Author: Gavin Johnston, Director, Africa Productivity and Performance Transformation Leader, PwC South Africa
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Gavin Johnston
Director | Africa Productivity and Performance Transformation Leader, PwC South Africa
Tel: +27 (0) 66 403 8327
