The growth and mass adoption of social media over the last 5 years is truly phenomenal. Businesses have cottoned on to the opportunities that are presented by social media and now major corporations scrambling to reallocate their advertising budgets away from traditional media and into the new digital economy.

It is well known that social networking sites attract millions of users. Many people spend a lot of time on these websites, often visiting them several times every day. This saturation of audience makes social media websites an ideal marketing and sales platform.

According to the Nielsen Company, social media users universally spend approximately 40 percent more time social networking sites than they did even a year ago.

Social networkers have taken to teasing, prodding, poking and tickling each other as well as playing the various games that are available in social networking sites. These games are free to play, but some game developers are make money selling goods through their games.

In a statement made to Newsweek by Playfish CEO Kristian Segerstrale, said that Playfish sells around 90 million virtual items per day. Outsell, a research company, reports that 43 percent of business-to-business marketers plan to increase their social media marketing activities this year despite having no significant change in their advertising funds.

Because of the popularity of social networking sites, new opportunities have sprouted for internet marketers and online game developers.

India and China are still unmatched in the Asia Pacific for Business Process Outsourcing services and offshore IT. While these two countries enjoy their status, there are some countries that are becoming credible substitutes, according to the latest report by Gartner.

The research firm examined the capabilities of several countries as offshoring locations for their latest report, ’10 Leading Locations for Offshore Services in Asia Pacific and Japan for 2010.’ Another study categorized the top 30 in the international BPO industry.

Jim Longwood, research vice president at Gartner said, “Countries such as Malaysia, the Philippines and Vietnam have continued to strengthen their position against leading alternatives, while Indonesia has entered the top 10 for the first time. Some of these countries have invested considerably and leveraged increased demand for lower-cost services. The global financial crisis forced many organisations to place a greater emphasis on cost optimisation.”

The other countries in the top 10 are a combination of established environments that offer limited cost benefits, such as Australia, New Zealand and Singapore, and countries that offer attractive costs accompanied with a few challenges like Malaysia, Indonesia, the Philippines, Thailand and Vietnam.

Many countries have worked hard to improve their standing as leading offshore sites.  Even though India maintains its development in exporting IT services, its global market share has decreased. India now faces challenges in employee compensation, financial irregularities, geopolitical concerns, and local attrition rates. These problems are allowing other countries to share in the boom as they are improving their capacities.

Longwood said, “In view of India’s dominance, many countries trying to tap into this market are reassessing their strategy and looking at niche markets like call centres, logistics and other back-office functions where they might have a physical proximity advantage over mature countries like Australia, Hong Kong and Singapore.”

A new finalist in the top 10 list was Indonesia because of its massive labour pool and developing business environment. Pakistan drops down the top 10 list.

Longwood continued, “This was largely due to Indonesia’s noticeable progress in addressing offshore opportunities rather than Pakistan’s drop in performance, but political instability was also an issue here.”

The US currency’s instability and the global financial crisis are hurdles that offshore vendors and buyers still face. It is noted that the APAC region is less affected by these problems, but the fluctuating currency exchange rates against the US dollar has affected the appeal of some countries.

“As organisations increasingly look at global delivery as a means to reduce cost, they will need to focus on important areas such as security, data and IP protection and compliance,” shared Longwood. “However, the link between lower risk and higher cost holds true.”

The mature markets of Australia, New Zealand, and Singapore presented limited cost savings, but these countries are rated for cultural compatibility, data and intellectual property, globalisation and legal maturity, language, political and economic environment, and security and privacy.

Although Vietnam was the sole country to be top rated for cost, it was rated fair or poor for other standards. It received the lowest ratings for data and intellectual property, and security and privacy.

Thailand, Vietnam, the Philippines and Indonesia all rated low for political and their economic environments. While low cost is important, understandably the political and economic environment is still considered very carefully when moving business to offshore locations.

The only category where most APAC countries are rated from good to excellent is infrastructure.  Most offshore sites are rated as good to very good for cultural compatibility and language except for China, Indonesia, Thailand and Vietnam.

Outside the top 10 list, Pakistan, Sri Lanka, Bangladesh and North Korea are also strongly considered, as these countries are building attractive environments for companies that look for lower cost environments.

The Economic Times reported that Her Majesty’s Revenue & Customs (HMRC), the UK’s tax authority, has started its offshore outsourcing pilot programme in India with Capgemini in an attempt to lower its operational costs by $7.5 million.

HMRC may choose to increase its outsourcing activities after studying the initial programme. The pilot programme is included in HMRC’s five-year $84 million outsourcing deal for keeping track of imports and exports.

In an attempt to sooth the inevitable naysayers HMRC spokesman Andrew Bennett said, “No taxpayer data will be leaving the UK. As there will be no job losses in the UK as a result of this pilot, as this is new work. No decisions about any further off shoring will be made until the pilot is completed and the results rigorously evaluated.”

UK outsourcing trend unveiled

According to OnRec, a survey done by PeoplePerHour.com of more than 50,000 business users revealed that 60% of UK businesses have increased their outsourcing requirements compared to the last 2 years. 61% of these businesses are outsourcing their IT functions to local outsourcing vendors instead of overseas substitutes, with only 6.9% of business granting deals to the lowest bidders.

Xenios Thrasyvoulou, founder of PeoplePerHour.com said: “Responses to our survey and analysis of transactions on the site points to one conclusion: outsourcing is growing and offshoring is falling.”

Genpact, New Delhi’s biggest business process outsourcing firm has acquired Hello Communications, Inc, a wholly-owned subsidiary of Hikari Tsushin Inc (First Section of Tokyo Stock Exchange). The deal, which will take from three to five years to mature, and will involve providing services from customer service and finance and accounting to IT infrastructure support and back office processing.

Although the firm is based in Japan, the services will be supplied from Genpact’s delivery centres in China. While Pramod Bhasin, president & CEO of Genpact, declined to disclose the financial aspects of the contract, he said it would require a few hundred people initially and would ramp up as the contract matures. He said that, “This deal is strategic for us as we will be completely servicing this client from China. Moreover, we could look at opening another centre in China by the end of this year to service this client.”

The affiliation with Genpact would permit Hikari Tsushin Inc to provide cost-effective services from China to its customers in Japan while enabling the company to make forays into the fast-growing China market.  Shigetaro Toyoda, CEO of Hello Communications  said, “We are delighted to partner with Genpact and leverage their strong process discipline, quality rigour and business process reengineering expertise to offer best-in-class services to our customers.”

The Asia Pacific Region is fast becoming the go-to marketplace for offshore services buyers, and it will grow even more popular in the outsourcing industry.

The Financial Times reported that the main reason for the popularity of Asia-Pac is that the demand from Asian located companies is expected to increase. Some Asian countries like China and India are surging ahead in recovering from the effects of the GFC.

Last month, research firm Gartner indicated that current government stimuli will contribute to approximately $39 billion in IT expenditures between 2010 and 2013 in China alone.

Even if the Chinese government put the brakes on the economy’s rapid growth, Goldman Sachs estimates that Chinese development will still exceed 11 percent this year.

As The Financial Times said, “the arena for winning outsourcing business has moved back to the rising markets.”