【正文】 nManagement sophisticationReasons? SOEs consider economics less and “management authority” more Prefer to build inhouse in order to increase management power and assets? Call Center investment is less significant to large panies. Also, their agents’ needs can justify a sizable inhouse operation? Monopolized industry tends to be admindriven, or to disregard CC solution totally? Poorly managed panies/industries see much less value of call centers to their business improvementSOE(1)LargeMonopolized industryPoorly managedPrivately owned foreign investedSmalltomediumMarketdriven, peting industryWell managedLess willing More willing(1) SOE = Stateowned enterpriseBackup23AGENDA Executive Summary Call Center Business? Market Overview? CC Customer Segmentation Inhouse users Outsourcers? Demand? Customer? Economics? Competition? Remendations Success business model Partnering strategy ECommerce Market OverviewTCI Tianjin? Current Situation Analysis? Remendations24ADMINDRIVEN SEGMENT: MOST IMPORTANT FOR NOWHigh % in total new CC demand Driven by “Pillar industries”Demand surged in a group of China’s important industries since 1999, aiming to improve service level? Bank? Post service? Fixedline tele? InsuranceRequired mostly midtohigh end call center solutions (Nortel, Lucent, IBM, Huawei…)? Big, monopolized, profitable corporations? High cost of failure? Budget approval from above? Often in conjunction with structural reform of new CC seats (’000)YearAdmindriven Total new demandAdmindriven66%76%62%Source: BCG modeling25HOWEVER DEMAND EXPECTED TO FLUCTUATE IN THE FUTUREUnderlying ReasonsAdmindriven segment orders e in batches? Call center construction proposal often initiated by governmentcontrolled corporate headquarters, or even ministries? Branch panies required to plete call center construction within similar period of timeAdmindriven corporations tend to overinvest? Branch offices incentivized to use up the budget advised by headquarterHowever few admindriven industries are expected to invest in call centers for the following years? Only two industries expected: utility and rail transportation of new call center seats (’000)YearBanking exampleSource: BCG modeling。 China Statistics Yearbook1998 99202301 04 1015REDUCING TELECOM CHARGES WILL BOOST FIXEDLINE ADOPTIONBackupCompetition pushes further tele reductionMost alternatives at least 50% cheaper? IP, inter phone call, “call back” services …Ministry determined to further reduce tele charges? “Current tele charge still does not reach its optimum stage yet” Minister of MIITele reduction projectionPhone peration per 1000Deflated price index(1)Phone line per 1000 peopleYear(1) Price deflated by GDP indexSource: China Tele Charges Policy Book。 Jarding Fleming Research。 。 Global eForce。 interviews。 experts opinions。 expert opinions。 literature research。 BCG modelingTV selling exampleCost (’000 RMB) per month per agent1012Selfbuild(1) Outsourced35AGENDA Executive Summary Call Center Business? Market Overview? CC Customer Segmentation Inhouse users Outsourcers? Demand? Customer? Economics? Competition? Remendations Success business model Partnering strategy ECommerce Market OverviewTCI Tianjin? Current Situation Analysis? Remendations36FOUR DISTINCTIVE TRAITS FOR CHINA’S CC OUTSOURCERSTraits for An Emerging SegmentOverviewOutsourcerJust emerging High Geographic concentration Focus on generic servicesInterviews SummaryMany are losing money Interviews Summary of outsourcers%(%)Source: Interviews。 expert opinions。 MII data。 China Auto Market 1997。 。 eBIS。 OECD。 BCG analysis17EXPERT OPINIONS REVEAL A MARKET OF 145,000 IN 2023 “Fast development is expected to continue in the next five years. I believe that call centers seats will grow at 30% a year for the next five years (which means 145,000 in 2023)” Director, CTI Forum “Compared to 1999, in 2023 call center seats increased by 142%, or 16,000 seats” China Computer News “In the next three years, we project that call center seats will double. It’s our conservative estimate.” Manager of Business Development Dept, HuaweiSource: BCG interviews18AGENDA Executive Summary Call Center Business? Market Overview? CC Customer Segmentation Inhouse users Outsourcers? Demand? Customer? Economics? Competition? Remendations Success business model Partnering strategy ECommerce Market OverviewTCI Tianjin? Current Situation Analysis? Remendations19CHINA CC USER BASE VERY DIFFERENT FROM . Selected industry explanationTele? China tele call center investment is still quite government driven. To promote “189” service line, MII demand call center at each city/county levelManufacturing? Manufacturing CC usage still not widely adopted yet. Most stateowned panies are unwilling and unable to invest in serviceRemote shopping? Although remote shopping is the biggest CC user in the US, it’s merely the case here because of inconvenient payment, credit and delivery system. Also, shopping convenience in metropolitan area and general poor consumption power make remote shopping economically unsoundOthersOutsourcingSecurityTV sellingNews mediaAirlineComputer/TechManufacturingPost serviceInsuranceBankingMobileFixedline TeleChina USOthersOutsourcingTransportHealthcareUtilitiesRemote shoppingSecuritiesAirlineTechnologyManufacturingInsuranceBankingTeleOur months interviews have well covered the above industriesSource: Datamonitor。 BCG analysis29MORE INDUSTRIES ARE LIKELY TO