Report: India, China, and Philippines at the Helm of Global Offshore Market Share

According to a report released by XMG Global based in Canada, the global outsourcing market is expected to tag at $373 billion in net revenue by December 31,2009. This is equivalent to a growth of 14.4 percent in comparison to last year's figures. Incidentally, the report puts India and China at the helm of the top revenue producers in the industry. India capped revenues of $48 billion, while China trailed at $28 billion.

Senior analyst at the firm, Vincent Altez, said in an online report by ZDNet Asia that India is projected to have a market share off 44.8 percent in the global market and China will reeled in about 25.9% of total market share worldwide. The market share for India is more or less the same, when compared to last year, due to the financial scandal that rocked Satyam and with demand moving to other regions.

Altex continued to say that there has been a return to normalcy post-recession that makes a strong case for shifting offshore work to locations other than India.

Yet another emerging player in the offshore market is Philippines, and XMG has labeled the country as the 3rd best performer in global outsourcing. Philippines grew at approximately 21.7%, capping at $7.3 billion in revenues in 2009. Nonetheless, that number is less than the 24 percent from last year. XMG added that major outsourcing firm in the Philippines have delayed expansion projects due to dwindling demand for IT services. In aggregate, Philippines will bring in an estimated total of 6.9 percent of the global offshore revenue as opposed to 6.7% last year.

Although the 14.4% for 2009 is a bit lower than the 19 percent from 2008, growth in the global market is still doing better than expected in the offshoring industry amid a recession.

Altez was quick to note that outsourcing and offshoring is going through an economic revolution despite the downturn in the economy.

According to XMG, there will be a number of elements shaping the offshoring sector's market value along with the dynamics of outsourcing across the world in 2010. Some of these aspects will include factors like a recovery from the impending recession in Europe and U.S. This will, in turn, translate to more IT services and BPO demand. This will be coupled with a need for governments of countries like Vietnam and China to improve their infrastructure in order to tap into this demand.