Industry Commentary

Alorica Expansion Confirms Bulgaria is a Market on the Move

By August 23, 2018July 25th, 2023No Comments

In the domain of offshore outsourcing, sometimes locations pop up that just feel right for providers.  Over the past several years, there have been a swath of countries that came to the forefront of customer experience delivery. Some have been a flash in the pan, while others have cemented their position as locations of choice.  Bulgaria has solidified its position in the latter category, and for many outsourcers the country has become the center of the Balkan’s contact center value proposition.  An influx of investment by providers validates Bulgaria as a country from which nearshore servicing can be done affordably and to a high standard.  However, BPO players need to be cautious not to push Bulgaria’s capacity too hard, in order to maintain its competitive cost base and viability for the contact center services space.

Alorica‘s recent announcement that it is expanding its Bulgarian presence was the latest in a series of contact center services providers that have decided to house capacity in this location.  Citing a strong labor force with an aptitude for European languages, Alorica’s beefed-up Bulgarian operations are certain to be a European center of excellence for the Irvine-based BPO player.  However, it would be remiss not to recognize the significant presence so many other outsourcers have in Bulgaria.  Among global players, Alorica is joined by Sitel, Concentrix, Sutherland Global Services and Telus International.

Certainly, there are multiple factors that bode well for Bulgaria as a nearshore location for contact center services.  Beyond an acknowledged level of strength in the principal European languages, the country also boasts multiple locations from which customer experience services can be delivered.  Bulgaria is not a Sofia-or-bust play, in the same style that having only one major urban center has negatively the long-term prospects of so many countries in Central and Eastern Europe. Rather, being able to access scalable talent and commercial real estate in secondary centers including Burgas, Varna and Plovdiv gives providers a degree of flexibility.  And while it is not the most inexpensive location in the Balkans, Bulgaria does have among the lowest social security contribution obligation in the region. Crucially, its major cities are easily accessed from most European commercial centers. It is also seen to be a competitive economy that is open to foreign investment, roughly in line with its Central European neighbors.

That said, providers need to be cautious in terms of how this market evolves.

Despite its obvious attributes, Bulgaria has just 7 million people.  With its attractiveness, it is likely that the recent expansion announcement by Alorica will not be the last, as more BPOs seek out business-friendly, multilingual options in the European nearshore.  Equally, as Bulgaria’s economy continues to diversify, the pull from different sectors for educated, linguistically-talented labor will only tighten the prospective agent pool, thereby driving up costs.  This has been a trend in countries where tourism is a factor, and, sure enough, Bulgaria has two major cities that border well-known tourist resorts.  Efforts will be needed to develop the industry in a sustainable fashion, with an eye to delivering as many value-added services as possible.  Bulgaria possesses significant potential as a nearshore destination, and focusing on the more profitable aspects of customer experience delivery will be crucial moving forward.

For more in-depth analysis on Bulgaria and the entire Balkan BPO space, please download the complimentary report co-authored by Anikanov.com and Ryan Strategic Advisory.