Datamonitor, Mexico, Offshore, Center, Location

Mexico secure as a contact center 'Location of Choice' for US investors, says Datamonitor

A new report by Datamonitor indicates Mexico will remain an offshore contact center "location of choice" for U.S. investors, but also identifies growing competitive threats from across Latin America. Datamonitor says Mexico's future in the offshore outsourcing of customer care services is secure primarily due to two factors: a growing Hispanic population in the U.S., and the rise of household incomes among Spanish-speakers.

These market conditions are driving levels of demands from U.S.-based firms who wish to service their Hispanic American clients.

Datamonitor also alludes to the growth of other players in Latin America that will be a competitive threat to Mexico for U.S. Spanish-speaking work in the future. According to the report, Argentina and Chile among others are aggressively targeting the North American market, as are smaller countries including Costa Rica, Dominican Republic and Panama.

Datamonitor expects call center agent positions in Mexico -- both offshore and domestically outsourced -- to rise from an estimated 33,500 today to nearly 80,000 by 2010. This equates to an 18% compounded annual growth through this period.

Principal growth drivers include an ever-growing domestic market, as well as demand from the U.S. for multi-lingual, commercially sophisticated agents. Datamonitor outsourcing and offshoring analyst Peter Ryan explains: "Mexico is one of the most mature offshore locations in the contact center outsourcing world, yet is still posting high levels of annual growth. This has largely to do with the high levels of demand coming from U.S.-based firms that wish to service their Hispanic-American customers. In addition, Mexico's move to market liberalization has increased that country's consumer class, thereby necessitating more agents to serve domestic demand."

Ryan also points to lower relative costs in Mexico being another important element in Mexico's positioning. In both labor and commercial property, Mexico comes in significantly less expensive than overheads in the U.S., or Canada. Investors continue to realize that if they can source customer care with all these positive attributes from a location in close proximity, they will do so with enthusiasm.