September 14, 2023
South Africa has emerged as a stand-out destination for customer experience (CX) services. Offering a talented workforce, cost-effectiveness, and infrastructure, the nation is attracting the attention of both providers and customers alike. Now is the time to capitalize on this alluring market in this rising continent. Discover seven advantages of South Africa and compare its hotspot cities in this blog.
With the rapid global transformation and dynamic shifts in commerce shaped by cutting-edge strategies, one continent is emerging as a rising giant in the realm of customer CX services delivery – Africa.
According to Everest Group’s recent report Africa on the Rise – The Next Frontier in Customer Experience Management, the continent’s customer experience management (CXM) delivery presence has surged. Boasting a full-time equivalent (FTE) workforce strength of 200,000-250,000 offering CX services to clients in and out of the continent, Africa has captured interest from global enterprises in the United Kingdom, the United States, and Western Europe.
Get insights on the CXM industry in Europe in our webinar, Navigating the European CXM Outsourcing Market: Trends and Insights.
As enterprises look to mitigate concentration risks by diversifying their contact center presence and further tap advantages such as cost arbitrage, diverse talent, and rapid technological advancements, businesses find Africa increasingly attractive for CX delivery. At the same time, the country’s focus on integrating environmental, social, and governance (ESG), and diversity, equity, inclusion, and belonging (DEIB) elements further enhance its appeal to companies today.
Amidst Africa’s overall growth,South Africa in particular has captured the interest of CX providers and enterprises as a paragon for lucrative CX delivery. As the stage is set for South Africa’s continued ascent, let’s unravel the reasons behind South Africa’s emergence.
The emergence of South Africa
South Africa is developing as a globally attractive location for CX service delivery, drawing attention for numerous compelling factors that include:
- Cost-effectiveness: South Africa presents a promising advantage in cost-effectiveness for contact center services, offering competitive pricing in comparison to traditional nearshore destinations in Eastern Europe, and Latin America. The country enjoys relatively lower labor costs while ensuring high-quality service standards, making it an enticing proposition for companies seeking to optimize customer support operations without compromising on service excellence
- Skilled and multilingual workforce: With a large pool of young and educated talent, South Africa’s workforce possesses good aptitude and has a solid working knowledge of technology. With a variety of languages spoken, including English, French, Spanish, and native African languages, South Africa offers a significant advantage for businesses with global customer bases by fulfilling diverse language requirements
- Time zone compatibility: The country falls within a favorable time overlap with major markets like Europe and the United States, enabling seamless communication and smoother real-time collaboration between businesses in South Africa and their counterparts in these key markets
- Infrastructure: South Africa boasts well-equipped built and digital infrastructure, facilitating seamless interactions for traditional and hybrid contact centers. With robust telecommunications and widespread internet connectivity, businesses can efficiently run contact center operations
- Impact sourcing focus: South Africa offers companies a chance to meet impact sourcing goals while remaining cost-effective. With a skilled and diverse population, as well as a young workforce, the country provides an opportunity for impactful sourcing that supports local economic development
- Regulatory support: The South African government actively supports outsourcing by offering incentives to companies, stimulating development through foreign investment and job creation. Governing bodies like the Department of Trade, Industry, and Competition (DTIC), Business Process Enabling South Africa (BPESA), and CapeBPO provide resources and reward job creation
- Cultural Affinity: South Africans’ familiarity with US and UK culture and shared holiday celebrations create cultural similarity with global markets for CX delivery. This affinity facilitates efficient CX service delivery by enabling a better understanding of customer preferences, language, and lifestyle, fostering smoother interactions and stronger connections
CX providers in South Africa
While numerous global service providers thrive in the CX services landscape in South Africa, regionally-based service providers also have built a noteworthy industry reputation, leveraging different locations to extend their services both within and beyond the African continent. These service providers offer complete customer lifecycle management, business applications, marketing, and lead generation, with customer engagement specialists and Artificial Intelligence (AI)-driven solutions for enhanced customer engagement.
Examining the major hot spots for CX services delivery within South Africa
In South Africa’s remarkable rise in the CX outsourcing industry, three dynamic cities – Cape Town, Johannesburg, and Durban – stand out as hotspots for CX services delivery.
Below, we explore some of the elements that place these cities at the heart of the driving force behind South Africa’s growth and prominence in this industry:
| City |
Attributes of the city |
Cape Town
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Cape Town’s compelling 60-70% cost advantage over major UK tier-2 cities and its favorable business environment with a reliable infrastructure, advanced technology, and a skilled workforce make it an attractive choice for cost-conscious companies. English is the primary language utilized for BPO services in Cape Town, although there is also a significant Afrikaans-speaking population. Cape Town showcases a remarkable collaborative spirit between the local government and operators, driving strategic projects that lay the groundwork for future growth and success in the region’s CX services delivery landscape. With a focus on key verticals like retail, telecom, utilities, and travel and hospitality, the city hosts specialized skills academies to support these industries, ensuring a skilled and talented workforce that contributes to its competitive advantage. |
Durban
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Durban stands out as a cost-effective contact center destination, offering up to 70% lower operational costs than tier-2 cities in high-cost countries. Its skilled and diverse workforce, supported by reputable universities, makes it an appealing choice for outsourcing, accounting for 13% of South Africa’s contact center jobs. English is the primary language for BPO services in Durban, with significant a Zulu-speaking population. Recent infrastructure development, reliable telecommunications, modern office spaces, and high English proficiency further enhance Durban’s appeal for seamless CX services delivery. |
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Johannesburg
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As South Africa’s largest city, Johannesburg presents a substantial English-speaking talent pool, making it an advantageous hub for contact center outsourcing with its diverse and skilled workforce. In addition to the Afrikaans-speaking population, talent proficient in Spanish, Portuguese, German, Dutch, and French languages are readily available. Accounting for 40% of the country’s contact center jobs, as per BPESA, Johannesburg ensures abundant resources for efficient outsourcing operations. The city’s modern infrastructure, including reliable telecommunications and robust IT systems, guarantees seamless contact center operations. |
The road ahead for South Africa
As South Africa establishes itself as a sought-after location for CX services delivery, the country is poised to attract more global enterprises expanding their service delivery footprint. With its skilled workforce, cost-effectiveness, and cultural affinity, this vibrant nation offers fertile ground for driving business success and forging lasting partnerships. To stay ahead in this dynamic environment, organizations need to quickly seize the moment and explore the untapped potential of South Africa’s burgeoning CX services delivery sector.
Read Everest Group’s report Africa on the Rise – The Next Frontier in Customer Experience Management to learn more about the African CXM landscape. If you have questions or would like to discuss South Africa’s evolution, please reach out to Chhandak Biswas, [email protected], or Joshua Victor, [email protected].
