Asia Pacific accounts for one sixth of global consulting industry

Now at a worth of around $25 billion on conservative figures, growth in the Asia Pacific consulting market in recent years has seen it capture a one sixth share of the global industry.

According to analysis by Consultancy.asia, leveraging data from Source Global Research, the consulting sector of the Asia Pacific has boomed in recent years to now pull in around $25 billion in annual revenues – representing a 16 percent share of the global market. While the impact of the coronavirus pandemic remains to be seen, there’s already some suggestion that the regional APAC market will be the least impacted by the crisis.

Albeit a huge sum as it is, the $25 billion figure also only represents the top end of the market, with Source Global Research confining its analysis to consultancies with a headcount of greater than 50 serving mid to large companies and a relatively narrower range of lines compared to others – what the firm terms as ‘big consulting’.

According to its framework, the global market is estimated at a worth of around $160 billion. In comparison, other analysts such as IDC and Statista adopting a broader scope assess the market to be above the $300 billion mark, while Plunkett Research even pegs it as high as $500 billion.

One estimation, by US-based ALM Intelligence, calculates the industry at a worth of more than $300 billion, with the Asia Pacific having already cracked the $50 billion mark in the past eighteen months – a figure which is reasonably consistent with Source Global Research in representing a one sixth share. Whichever methodology is adopted – including direct financial data from the big consulting firms themselves – it’s clear that the Asia Pacific market is of ever increasing importance.

Driving the market – like in almost all regions – is the booming demand from financial sector players threatened with ongoing disruption and swamped by endless new regulation. Locally, the segment accounts for a more than one quarter share (28 percent), followed by manufacturing at 14 percent – with Southeast Asia joining China as the world’s busiest factory. Another consultancy stalwart, the public sector, comes next, joined by a booming healthcare segment.

As a comparison to the global landscape (which continues to be dominated by the North American market, accounting at a worth of around $80 billion annually for effectively half of all global revenues), the financial services segment is closer to 22 percent, while manufacturing sits at 15 percent – with APAC obviously included in those figures. Healthcare, contributing 13 percent, has also now eclipsed public services (12 percent) at the global level. 

Last year, the healthcare segment grew by 27 percent in China alone, with China in recent years becoming the dominant regional consulting market overall together with the more mature market of Australia. The two nations now contribute almost one half of the regional revenues, or close to $12 billion of the $25 billion estimate, at respectively 24 and 23 percent.

Southeast Asia, which includes Myanmar, Thailand, Malaysia, Laos, Cambodia, Vietnam, Indonesia Brunei, Singapore and the Philippines, collectively adds close to $4 billion for a 16 percent overall share.

Others markets on the move in the region include India, which driven by a booming middle class and world-class expertise in information technology has grown to a worth of ~$3 billion, or 12 percent, along with South Asia more broadly. Countries included in the South Asia segment are Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, India, Pakistan and Sri Lanka.

As a comparison, the long-touted consulting market of the GCC only last year broke the $3 billion barrier on the back of an ambitious public sector. One of the world’s most mature markets, Japan, meanwhile brings in around $1.5 billion.

As to the outlook for the APAC region, any forecasts are presently up in the air. There is however some anecdotal evidence that the regional consulting market might be quicker to bounce back compared to its counterparts from any hits borne of the coronavirus. According to early information from Source Global Research, a number of its regional clients are already tentatively looking ahead beyond the crisis, which is far from the case for those operating in Europe.

Largest consulting firms

Similar to the global playing field, the Asia Pacific consulting industry is dominated by a small group of players that control a large portion of the advisory space. Globally, according to Consultancy.org analysis, over half of all consulting spend flows into the hands of the world’s ten largest consulting firms – Accenture, Deloitte, PwC, EY, KPMG, McKinsey & Company, Boston Consulting Group, Booz Allen Hamilton, Mercer and Bain & Company – while the top 200 players account for some 80 percent of total income.

In the Asia Pacific the picture is no different, although the landscape is more fragmented in some countries where international firms face regulations for doing business (e.g. China) and in markets which are still less mature, with further consolidation expected in the years to come. All of the globe’s ten largest consultancies have a leading position in Asia Pacific too, with the exception of Booz Allen Hamilton (not to be confused with Strategy&, formerly Booz & Company and Booz Allen), which focuses mainly on the US and other markets.