The Indian MRO industry is estimated at $148 m in FY07 and is expected to reach $450 m by 2010 at CAGR of 35%. The growth will be largely driven by rapid expansion of its operations and simultaneously moving up the value chain. Several vendors are planning massive capacity build-up over the next 2 to 3 years in view of greater demand from their existing clientele. With increased awareness about offshoring, several corporates especially from the European markets are expected to fuel the expansion drive in the long term. Vendors are increasingly moving towards end-to-end services to cross-sell high value services to existing clients and approach prospects with multiple options for their first step in offshoring.

Expanding Onshore Marketing Presence

Today, all the top pure play MRO vendors offer end-to-end services in market research. Vendors are also aggressively expanding onshore marketing presence by adding local experts and new marketing centers. AbsolutData recently added three senior marketing executives with over 15 years of experience.

Moving up the Value Chain

Currently, MRO vendors earn majority of revenues from low value services like data processing. The vendors have evolved in terms of their processes and technology for executing these services. Increasing vendor maturity is driving buyer confidence to send larger volumes of work.

Further, MRO vendors in order to move up the value chain are increasingly productizing offerings in low value services.

• Annik recently launched a flagship insights platform, called Active Insights Management. The platform provides triangulation of multiple data sources to generate industry insights.
• Dexterity has plans to launch a MR workflow software MR-Anywhere that will provide single integrated platform for all activities in research.

As competition intensifies in low value services, the more successful MRO vendors will move up the value chain to maintain profitability.

The employment in high value services like analytics is also expected to rise from around 300 to 1,000 people by 2010. This three fold increase will be primarily driven by the huge profitability in high value analytics services with average revenue per employee in the range of $30,000 to $50,000 per annum as compared to $22,000 for low value services.

Going forward, we believe that several large vendors will move towards developing capabilities in high value services. Further, emergence of new vendors focused on analytics coupled with large BPOs looking to add these capabilities, will trigger several acquisitions.

The above article is an excerpt from the newly released ValueNotes report: "Market Research Outsourcing: The India Growth Story". The report provides an in-depth information and analysis of the Indian vendor space along with vendor profiles of key players.

To read the Abstract and Table of Contents, please click here.