Offshoring: Reasons for the slowdown.

• FRANCE REDUCES ITS SCOPE
• AFRICAN COMPETITION INTENSIFIES
• THE DIFFICULT CHALLENGE OF ADDED VALUE

Offshoring, one of Morocco's global trades (MMM), has always been presented as an example of growth. Today, the wheel seems to be turning, and the sector is showing a decline in performance for the first time. Youssef Chraibi, president of the Moroccan Association of Customer Relations (AMRC) and the Outsourcia group, explains this trend.


- L'Economiste: The revenues of offshoring trades are showing signs of slowing down. How do you explain this turnaround?
- Youssef Chraibi: We are indeed seeing a slowdown in activity for the first time this year. The sector nevertheless retains its importance with nearly 70,000 jobs. It is also the 6th largest activity in terms of export revenue. However, since last year, we have been experiencing both a contraction in demand, particularly in France, our largest market with a weight of 80%, and lower competitiveness of Morocco as a destination.

- What is your assessment of the year 2013?
- 2013 was the first year of negative performance for the sector after more than 10 years of average double-digit growth. The sector's export revenues fell by 2.7% to 7.2 billion DH. The two major segments of offshoring, namely call centers and ITO, have been affected. Three essential phenomena explain the slowdown in activity in call centers. First, activity was impacted by an unfavorable economic situation in France, and in particular the significant difficulties of the three French telecom operators following the arrival of Free on the mobile market. This reduced their outsourced flows, both in France and offshore. This sector accounts for about 50% of the market for outsourcers in Morocco. The other factor is related to increasingly noticeable competition from low-cost destinations, particularly from sub-Saharan African countries, which are beginning to position themselves as real alternatives in a context of seeking lower prices due to the crisis in France. From a more structural point of view, the sector has entered a phase of maturity and therefore consolidation. This implies the disappearance of some small players and the cessation of certain unprofitable activities (in particular low-value telemarketing).

- But operators are worried about the sector's evolution?
- We remain confident about the medium- and long-term prospects. The global phenomenon of offshore outsourcing should continue to intensify, particularly from Europe. Morocco has structural advantages to become a high-end nearshore destination positioned on high-value segments, unlike a low-cost positioning. Growth should also come from new activities, particularly in the financial sector, with the retirement of a certain generation currently employed in France.

- Which segments is Morocco failing to position itself in?
- The BPO segment is the eternal will-o'-the-wisp of the offshoring sector. Although constantly announced, its takeoff is delayed, not so much because of a poor positioning of Morocco, but more because of a delay in the French market.
Indeed, unlike Anglo-Saxon companies, French clients, on the one hand, are less culturally inclined to outsource and, on the other hand, have more difficulty managing the internal social consequences this entails, due to the rigidity of their labor legislation.

- What are the main obstacles you encounter?
- The contraction of the French supply due to the gloomy economic situation in almost all sectors. Added to this is the competition from low-cost countries that more easily attract clients in difficulty. The employment pool is not adapted to Morocco's current positioning on high value-added services. And if we can no longer win the price war against low-cost destinations, we cannot afford to lose the race for quality either, which is our only way out.

- How is competition evolving in this difficult economic situation?
- With prices remaining a major element in choosing a destination, sub-Saharan African countries experienced strong growth in 2013, from 5% to 10%, particularly in Côte d'Ivoire, Senegal, and Madagascar. This is linked to the search for low prices during periods of difficult economic conditions. Clients have transferred certain types of activities, particularly in the field of prospecting telemarketing, which is economically more viable in these destinations. Major outsourcers such as Acticall or Webhelp have been offering credible alternatives to their clients in these African countries since 2013.


Comments collected by Ilham BOUMNADE.


Leconomiste.com

Published on February 24, 2014.

Posted online on February 26, 2014.