Turkey has been a success story for nearshore European CX services for several years. At the start of 2022, Majorel officially acquired Mayen Telekomünikasyon Hizmetleri A.Ş. (Mayen), an independent Turkish BPO. In this blog, I review the growth of Turkey's CX services and its challenges, Majorel’s expansion in the region, and the opportunities arising from the deal.

Majorel's entry into Turkey

in Q4 2021, after a period of partnership, Majorel acquired Mayen, a Turkish CX services provider with ~3.5k employees in seven locations, including Istanbul, supporting domestic and international clients in 12 languages. Since the pandemic, approximately 80% of its staff has been WAH.

Mayen was founded in 2004 and offers customer care, technical support, sales, collections, social media care and monitoring, CX analytics, and RPA. The company also has an in-house team of a dozen customer journey and CX process design consultants and business analysts.

Effective from the start of 2022, the company rebranded as Majorel Turkey.

Majorel Turkey has ~40 clients in the country and in Germany, across energy, telecom and media, aviation and tourism, BFSI, ecommerce, technology, and healthcare providers and medical devices. It is seeing increasing demand from onshore clients to implement automation to improve performance and quality and address the fluctuation of workloads. For example, for a Turkish payment processing fintech with significant volume peaks at the end of each month for card renewals, Majorel Turkey ran a UiPath implementation of back-office process robots to eliminate manual steps and automate data entry, checks, and processing. The hybrid human-bot environment handles ~50k customer card transactions monthly with 95% success and a 50% increase in efficiency.

For another Turkish fintech client-facing challenge with 24/7 continuity and increasing volumes, Majorel Turkey achieved 100% automated financial audits with a UiPath on-premise deployment. The automation handles ~400k unique transactions out of ~1m total transactions per day with a 99% success rate and 4x efficiency improvement. Other examples include an energy client for which the provider developed a custom robot implementation to reduce human errors on customer accounts and service change requests. The resulting benefits for the client are ~79% AHT reduction and ~80% FTE saving.

Majorel's expansion in Southeast Europe

Majorel’s Turkish acquisition is part of a broader push by the company in the region. In 2021, it entered Zagreb, Croatia; in Q1 2022, it entered Skopje, North Macedonia and expanded with a site in Thessaloniki, North Greece. Coupled with existing operations in Romania and expanding presence in Georgia and Armenia, Majorel is targeting geographic diversity and the increase of nearshore and offshore to enlarge its talent pool in support of West European markets. In 2021, Majorel increased the share of nearshore/offshore to 39% from 35% a year prior.

The ability to offer multilingual support, especially with German-speaking employees, is significant. Nearshoring German language operations will further gain attractiveness with the domestic market experiencing low unemployment rates and a minimum wage rising to €12 per hour in October 2022.

Turkey has quite favorable exchange rates with the Turkish Lira down 44% y/y in 2021, with Majorel responding by increasing employee compensation. In addition, the country offers a sizable pool of remigrants, native European language speakers with lived-in experience abroad. According to the national Call Centers Association, there were over 168k customer service employees in the country in 2021, a 5% increase y/y, with ~63% in outsourced operations. The country boasts ~11k employees supporting a foreign language, mainly German and English, but also Dutch, French, Arabic, and Russian. The association estimates the local market to be worth €1.5bn in 2021.

Another proximity factor for European market support is Turkey's GDPR alignment and improved transport connectivity, with the new Istanbul airport becoming a global traffic hub two years after its launch.

Turkey is pulling in CX players

The Turkish market is established with several multinational players and large domestic competitors. Most recently, it has also attracted smaller BPOs. Examples include:

• U.K. Ascensos opening a site in Istanbul
• German Kikxxl also enter Istanbul in 2022
• Croatian M Plus merging with Turkish CMC.

For Majorel, the Turkish acquisition offers interesting opportunities to target the domestic Turkish market. Majorel's play in the banking sector with IP and experience in digital transformation, such as account portability, can be a strong capability for the sizable Turkish BFSI and fintech sector. In 2021, BFSI became the largest segment of the Turkish market at ~25%. Majorel Turkey has existing domestic clients in full-service traditional banks, neobanks, credit cards, and payment processing apps, money transfer brands, shopping and prepaid voucher providers, and insurance companies.

Majorel plans further expansion in 2022, adding a new site in Diyarbakir in the country's Southeast and two others for nearshore services.

The main challenges in the domestic market are macroeconomic turbulence and hyperinflation, which complicate further business continuity and planning. For Majorel Turkey, this translates into more robust client contracts and greater resource flexibility via WAH. The company expects WAH to continue to positively impact employee attrition and hopes that broader career prospects in the larger organization will also strengthen its positioning in the local labor market. It also looks into utilizing the in-house digital learning and internal employee communication tools in other geographies.

Opportunity with digital natives

Another promising sector is startups and digital natives. Turkey's startup scene rapidly scales with several unicorns such as Getir and Trendyol. The company looks at Turkey as a center to support international and domestic new economy brands in line with the overall company approach. Already, over half of Majorel Turkey's revenues are in digitally native brands. It is also establishing the MajUp startup unit in Istanbul, intending to target the local startup ecosystem.