Greater and wider market penetration is the focus for TCS going forth

21 May 2019 Consultancy.in

While the growing tendency to digitalise offers a promising opportunity for Tata Consultancy Services (TCS) in markets such as India, South Africa and Latin America, the challenge to attain greater market penetration in more established economies such as Europe, Japan and Australia is a priority for the firm.

TCS has been on a rapid growth trajectory in recent years, which has taken it to the position of the largest IT services firm in India and the fastest growing IT services firm across the globe. A large part of this growth has come from within the Indian market itself, as digital services come into demand.

Consumers and businesses alike are looking to digitalise in India, and TCS has been the IT services firm of choice for a number of these businesses. TCS’ Global Head for business & Technology Services Krishnan Ramanujam has indicated that similar factors are contributing to the firm’s growth in South Africa and Latin America as well.

Much like India, these countries have only just begun their spending on technology, and TCS is looking to be there for those that are willing to make the investment. In recent years, the firm’s growth has been driven by sizeable contracts in the more established economies, particularly the US. Greater and wider market penetration is the focus for TCS going forth

Last year, TCS won a contract with US-based financial services firm Transamerica to manage the latter’s insurance and annuities vertical. The contract was worth nearly $2 billion. As a result, the Americas accounted for more than 50% of TCS’ revenues last year, while Europe accounted for nearly 30% and India accounted for nearly 6%.

Despite Europe contributing a substantial amount to the firm’s revenues, however, Ramanujam asserts that TCS is still a fair way behind in terms of market penetration in the market. The same can be said of other Asia Pacific economies such as Australia, New Zealand and Japan.

“.Our share even in our largest markets is still in low single digits. We are only scratching the surface yet in large markets like continental Europe, Japan and Australia New Zealand. Market penetration will be a growth driver in the coming years,” says Ramanujam.

“We keep expanding our addressable market by continually launching new services, products and platforms, catering to the needs of a broadening set of stakeholders... All this gives us greater confidence and visibility in our ability to sustain our market leading revenue growth,” he added.