Customer care calls from French speakers are now just as likely to be answered by agents in Madagascar as they are to be serviced in more well-known outsourcing destinations.
The island nation, situated about 400 kilometres off the coast of Africa in the Indian Ocean, is gaining a reputation as a disruptive force in business process outsourcing (BPO) for the francophone market.
Most of the focus for the outsourcing sector is on the island’s capital, Antananarivo, which has a population of 1.3 million.
The initial boom in interest in Madagascar as an outsourcing destination began a few years ago when the country’s eager local talent, with its melodious Malagasy French, started siphoning off some of the call centre work from places such as Mauritius.
Faster than the rest of the continent
But it is its infrastructure investment in both telephony and Internet that has really caused interest to intensify. Although Madagascar is one of the poorest countries in Africa, it boasts the fastest Internet speeds for the continent, clocking in at an average of 22.57Mbps, placing it 33rd globally in the worldwide broadband speed league 2019 by Cable.co.uk. This puts it above the U.K. in the table. The rest of Africa fares much more poorly, with six of the 40 included nations reaching average speeds of less than 1Mbps.
“Madagascar has only recently come onto the stage. It’s a location that is getting a lot of discussion right now,” said Peter Ryan, Principal at Ryan Strategic Advisory in Quebec, Canada. “There are several players that have facilities set up there to service the French language market, but it is still the new kid on the block and it doesn’t have the same legacy as Tunisia or Morocco or Egypt.”
But Madagascar’s Internet capabilities together with its recognised talent and low cost has been enough to see it start to challenge established geographies like Morocco. According to Quartz, there are now 233 BPO companies in Madagascar, employing between 10,000 and 15,000 people.
Setting the right price point
Ryan explained that because it is new, Madagascar has an advantage in that the price point is going to be relatively competitive compared to some of the more established locations. According to Metier-Outsourcer, a starting salary for a position in a BPO company in Madagascar for a person with minimal qualifications is about 75€ per month; in Morocco it could be double that.
“It is expensive to do French language work in Western Europe or Canada,” Ryan said. “Significantly lower cost is very attractive to many organisations ranging from billion dollar plus companies that might be transnational all the way through to small and medium businesses which might initially have limited requirements but which are likely to grow.”
Madagascar has undergone significant improvements, particularly in telephone infrastructure over the course of the last few years, and there is no shortage of individuals who want to work for call centres, Ryan said.
Madagascar is also benefitting from good French-speaking skills and fast internet speeds, said Leon Perera, CEO of Spire Research and Consulting. “The Francophone world is growing, thanks to brisk population growth in French-speaking African countries,” he said. “The imperatives of economic development will continue to impel governments of Francophone countries in Africa like Madagascar, whatever their political leanings, to put in place the necessary policies to attract BPO investment, so as to create a virtuous cycle of job creation and GDP growth.”
The French-speaking services market is more dynamic now than than ever, Ryan noted. “If we would have had this conversation a decade ago, Morocco and Tunisia would have accounted for 80 percent of the market maybe more,” Ryan said. Now, while those two locations are still Important, other locations are emerging.
The rise of Egypt with its significant French language talent at play, has been notable, and there are fast-growing developments in Senegal, Ryan said. He also highlighted how French services are being delivered in the Caribbean, in places such as the Dominican Republic with its more than 1 million native French speakers from Haiti. This has allowed Dominican Republic contact centres to provide trilingual services of English and Spanish for the U.S. and English and French for the Canadian market.
The time is ripe, then, for Madagascar to take its place as a player in the francophone outsourcing space. Companies that are seeking a competitive contact centre provider are keen to consider Indian Ocean locations, as an alternative to West Africa (Senegal, Ivory Coast) and Maghreb (Morocco, Tunisia), explained Emmanuel Richard, CEO of Paris-based Extens Consulting, a consulting firm that specialises in customer experience and call centres.
Madagascar and Mauritius are only 705 miles from each other. Both countries operate contact centres for French companies in a time zone close to Paris Local Time (GMT+4 versus GMT+1). Madagascar’s broadband infrastructures trumps its larger neighbor, though, and it can compete in terms of price.
“Among our clients, we see companies in e-commerce, logistics and telecom, which find the right balance in Madagascar, between low price, medium quality and staff turnover under control,” Richard said. “These companies invest in remote contact centres operated by BPO in addition to self-care to reduce operating costs in customer service.”
Challenging the rivals
There are challenges still – Madagascar is only emerging now as a viable destination – and Ryan says there is work to be done. Madagascar needs to promote itself better, Ryan said. “We are seeing deployments but most people don’t know it’s positioned for any kind of BPO work,” he said. “They need to take a lesson from Egypt or South Africa in terms of positioning them as logical offshore destinations.”
Ryan also stressed the need to offer customer references. “The fact that (Madagascar) already has a number of deployments doing some kind of outsourcing work means it has a great reference. Nobody wants to be first in; they need it validated in terms of the capability of delivering first,” he said.
Ryan added that the French market opportunity is significant and it is good that Madagascar is positioned to address this.
“People forget that it is not just France,” Ryan said. “It is Belgium, French-speaking Switzerland, Canada, Luxembourg and more. There is clamouring across French language demand markets for alternatives.” And Madagascar could just be what they are looking for.