【正文】 2%, 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, Huawei Source: BCG interviews AGENDA 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 Overview TCI Tianjin ? Current Situation Analysis ? Remendations CHINA CC USER BASE VERY DIFFERENT FROM . Selected industry explanation Tele ? China tele call center investment is still quite government driven. To promote “189” service line, MII demand call center at each city/county level Manufacturing ? Manufacturing CC usage still not widely adopted yet. Most stateowned panies are unwilling and unable to invest in service Remote 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 unsound 49%15%15%8%9%3%8%7%4%8%16%6%5%10%13%4%3%3%2%1%3%3%3%2%Others Outsourcing Security TV selling News media Airline Computer/Tech Manufacturing Post service Insurance Banking Mobile Fixedline Tele China US Others Outsourcing Transport Healthcare Utilities Remote shopping Securities Airline Technology Manufacturing Insurance Banking Tele Our months interviews have well covered the above industries Source: Datamonitor。 OECD。 eBIS。 。 China Auto Market 1997。 MII data。 expert opinions。 BCG modeling TV selling example 111 3 . 81 . 44 . 12 . 75 . 6S a l a r i e s C o m m u n i c a t i o n D e p r e c i a t i o n O t h e r c o s t s T o t a lCost (?000 RMB) per month per agent 1012 Selfbuild(1) Outsourced AGENDA 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 Overview TCI Tianjin ? Current Situation Analysis ? Remendations FOUR DISTINCTIVE TRAITS FOR CHINA?S CC OUTSOURCERS Traits for An Emerging Segment Overview Outsourcer Just emerging High Geographic concentration Focus on generic services Interviews Summary Many are losing money Interviews Summary of outsourcers 32001000500510271998 1999 2023% 77%3%23%97%S e a t s P op ul a t i on(%) 35%26%22%9% 9%M e s s a g i n g T e l e m a r k e t i n gA f t e r s a s l e ss e r v i c eV O I P O r d e r t a k i n g Source: Interviews。 expert opinions。 experts opinions。 interviews。 Global eForce。 。 Jarding Fleming Research。 China Statistics Yearbook 1998 99 2023 01 04 10 REDUCING TELECOM CHARGES WILL BOOST FIXEDLINE ADOPTION Backup Competition pushes further tele reduction Most 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 MII Tele reduction projection Phone peration per 1000 Deflated price index(1) 11 131622324763881131451611791982203001991 1992 1993 1994 1995 1996 1997 1998 1999 2023 2023 2023 2023 2023 2023Phone line per 1000 people Year (1) Price deflated by GDP index Source: China Tele Charges Policy Book。 BCG analysis CC MARKET ROUGHLY SEGMENTED INTO FOUR CATEGORIES According to Area of CC Usage, and Willingness to Outsource Selected industry examples Willingness to outsource High Low Serviceoriented Outsourcing Generic service Admindriven Securities Home appliance Computer/technology Courier service Publication TV selling Messaging Travel Simple order taking Paging Tele Insurance Bank Post service Community service Utility Core area Noncore area Area of CC usage THREE CRITERIA TO DISTINGUISH CORE AND NONCORE AREA Industry Core Area ? Securities ? Courier service ? Computer/technology “ Grey Area” ? Home appliance ? Banking ? Insurance ? Publication ? Tele ? Traveling Noncore Area (generic) ? Paging service ? Messaging ? TV selling ? Utilities Functionality ? Technical assistance ? Aftersales service ? Customer plaint settlement ? Sourcing/supplier coordination ? Customer inquiry settlement ? Telemarketing ? Message delivering ? Simple order taking Call Center?s impact to overall business Core: When CC function is critical to the performance of the industry Confidentiality requirement Core: If the industry/functionality mands strict confidentiality Call Center operational plexity Core: If operating CC in this industry requires great sophistication Criteria Many industries have both core and noncore areas Backup MANAGEMENT AND OWNERSHIP STRUCTURE AFFECT WILLINGNESS TO OUTSOURCE Considerations Ownership structure Company size Competition Management sophistication Reasons ? 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