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Call Centres were in terrific shape prior to the economic downturn which dramatically changed the operating environment and industry demand collapsed, causing growth in industry revenue to be a modest 1.0% per annum over the past five years through 2012-13. The growing competitive threat from offshore operators combined with a shift to more automated processes, online platforms, or even social networking sites, will see industry revenue decline marginally over the coming five years to 2017-18.
London, United Kingdom (PRWEB) January 28, 2013
Up until 2009-10, call centres were in terrific shape, recording consistent double-digit revenue growth, which attracted a number of new entrants to the industry. However, the economic downturn dramatically changed the operating environment and industry demand collapsed, causing revenue to spiral downward. With consideration of the highs and lows over the past five years, the result is average revenue growth of 1.0% per annum. The 520 industry operators are expected to generate £2.24 billion in 2012-13.
Demand from the corporate sector over the five years has been supported by an increased focus on customer relations. According to IBISWorld industry analyst Angela Kidson, “despite the underlying demand, industry profitability suffered as a result of a growing competitive threat from offshore operations”. Offshore contact centres operate in developing countries such as India, which benefit from significantly lower labour costs. This enables them to offer a similar level of service at drastically reduced rates in comparison with domestic operators. As a result, clients have sought offshore operators when outsourcing contact centre services, which has weakened industry demand and also profitability. The industry margin bottomed out in 2009-10, when profitability averaged just 1.8% of revenue. During 2012-13, profitability has strengthened to stand at about 3.1% of total revenue. Revenue is expected to fall by 1.1% over 2012-13.
There has been significant industry consolidation and industry exits in recent years. This is forecast to continue in 2012-13. Enterprises will seek to merge establishments into fewer larger centres and increase the use of automation in preference of labour in order to reduce operational costs.
There will be no real return to the industry peak figures reached in 2008-09, as the value of call centres is progressively shifted to more automated processes, online platforms, or even to social networking sites. Kidson adds, “ample economic headwinds will make it difficult for call centres to raise their pricing lest they lose clients, and so profits will remain squeezed”. The industry will be subject to some revenue volatility over the coming five years, resulting in a marginal decline through 2017-18.
The Call Centres industry is dominated by in-house contact centres. Outsourcing operations to contact centre specialists is a growing trend, however outsourced specialists still account for just 30% of industry revenue, giving the industry a low level of market share concentration. Major companies include MM Teleperformance, Sitel UK, LBM Direct Marketing and Convergys CMG UK.
For more information on the Call Centres industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Industry participants operate as a telecommunications intermediary between consumers and individual clients. Call centre operations involve inbound and outbound telecommunication services that improve client relations.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on many UK industries. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in London, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.co.uk or call (020) 3008 6568.
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