IT and ITeS making hay under the Retail Boom

Everyone knows, how India's retail sector is poised to take off and we will be among the top five retail markets in the world in the next 10 years. But that is only one part of the big story. For making the most of the retail boom worldwide is another sunshine sector that is — the IT and ITeS. While global retail chains are chalking out their India plans, Indian IT firms are quietly providing them back office and other core support from here.

Most top retail chains are either outsourcing their work to third parties in India or opening captives centres here.
And it's been happening for sometime now. For example, UK-based chain Tesco, has set up a back office — Hindustan Service Centre in Bangalore — with a headcount of 2,000 people. Target, a US-based retailer has a captive centre in Bangalore and plans to expand it. Marks & Spencer, Sainsburys, Best Buy — all have outsourced their work to India.

Studies forecast, as retail business gathers momentum, retail will double in the next couple of years. Research done by Everest Group reveals, the global IT and BPO spend by retail firms is worth over $10 billion per annum as of now.

Nearly 75% of this relates to IT and the rest 25% is contact centre, HR, finance and accounts, procurement etc.
Already, business worth $1.5 to $2.0 billion is being offshored to India. Companies like Infosys, TCS, Wipro, Satyam, Cognizant see 6-12% of revenues coming from retail outsourcing services. This translates to over $1 billion per annum. And this is growing.

"Retail outsourcing spend on IT and BPO is growing rapidly. The volume and value of contracts globally grew at over 20% over the last few years. And Indian firms too could continue to see their revenues grow from retail IT and BPO increase," says Gaurav Gupta, country head, Everest Group.

Read the whole article: Economic Times