Teleperformance in Japan Joint Venture, Aims at $1.5 billion in 2005

TOKYO — Teleperformance International (TPI), the global arm of the French call center giant, last month entered the Japanese market through acquisition of a 50 percent stake in Atec, a medium-size telemarketing firm based here.

This is the first time a western corporation has actually bought into a Japanese teleservice company although several US telemarketers have subsidiaries here. Sitel, for example, launched its own call center operation several months ago.

Teleperformance is now active in 28 countries including the US where it has a sizeable business, mostly in the western states where it has been growing rapidly.

The company first entered the Asian market two years ago through acquisitions in Hong Kong and the Philippines. It then added companies in Australia and New Zealand. All are majority ownerships except the Philippines were law bars foreign control of communications companies.

“We decided to start from ground zero in Asia with local partners because we found that no serious teleservice firms were active in the region,” Daniel Julien, the company's CEO said.

TPI did not enter Japan earlier, he explained, “because two years ago it was virtually impossible to enter into a joint venture here. It was just easier to go into Southeast Asia first.

“Japan is key to our strategic growth but I wanted to be ready before I came into this market and we did not want to start by ourselves so we entered into a joint venture with a well-established company.

“When you think strategically about globalization you need local partners who are deeply involved in their markets and that is how we look on expanding our global presence.

“We see the world as a mosaic and feel strongly that we have to respect the local culture of every country we enter. That's why we picked a company like Atec with whom to build a partnership in Japan.

“Our business model respects local management and over the 12 years we've been an international company all of our partners are still with us. It's not a pyramid but a matrix that builds on local relationships. We see our company as a federation of entrepreneurs.”

Teleperformance is bent on global expansion, Julien emphasized. “We plan to continue investing in our facilities in the US and in Brazil. We have just concluded a joint venture partnership in Finland.”

Company plans call for expansion of activities into 40 countries by the year 2000 and substantial increases in foreign revenues. The current revenue base is in Europe, which accounts for 75 percent of turnover in 1998.

Some 35 percent of the anticipated 1998 sales volume of $400 million will be earned in France. The US will account for 15 percent and Latin America and Asia for 10 percent, Julien said.

Projections for next year call for French revenues to amount to only 25 percent of the total, “even if our business keeps growing in France.”

The rest of Europe will contribute 30 percent, the US 25 percent and Asia and Latin America 10 percent each. Brazil and Argentina are TPI's major markets there. Total 1999 revenues are estimated at $500 million.

Looking six years ahead, Julien said the company should become a $1.5 billion business in 2005 with Europe accounting for 45 percent, the US 30 percent, Asia 15 percent, with 10 percent coming from Japan, and Latin America at 10 percent.

Masahiro Nawata is managing editor of the Tokyo-based DM newspaper Tsuhan Sinbun.

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