Taking On The Goliath

In the aftermath of the September 11, 2001 attacks on the twin towers in New York, the United States of America and some other nations decided to outsource their visa application processes as a security measure. VFS Global was among the first to open the Mumbai consulate in 2001. Sixteen years later, it has a tough competitor in Delhi-based BLS International, which is competing for business both in India and across key global markets.

Market leader VFS Global, a wholly-owned subsidiary of the Kuoni Group, headquartered in Zurich, Switzerland is still leading from the front but off late BLS International has had some overseas success.

“We recently won the global visa outsourcing contract from Spain MAEC (Ministry of Foreign Affairs and Cooperation — Spain) marking our widespread reach in Europe,” said Shikhar Aggarwal, Joint Managing Director, BLS International. The e-governance project worth over Rs 1800 crore from the Punjab government is another feather in the cap of BLS International.

But VFS Global is going steady. Its spokesperson said, “For India, we have seen a steady rise in the past years, which is in line with the growth perspective of the outbound travel market, increase in travel from the growing middle class and increased travel from Tier 2 and Tier 3 cities.”

Travel Boom
For both VFS and BLS, the visa services business is booming, thanks to a healthy growth in travel. After all, there are over 65 million valid passport holders in India, of whom nearly a third are active travellers. Finance ministry data indicates that around 21 million Indians travelled abroad for business or tourism in 2016. Nearly 30 per cent of the visa applications were processed by either VFS Global or BLS International, said Aggarwal. Other operators like Thomas Cook or Cox and Kings also operate in this space but none match the scale and size of VFS and BLS in their ability to handle millions of visa applications each year. Their source of revenue is the processing fee.

“A combination of tourism, education, business, and visit to family and friends is boosting the business,” said a senior official in the Union ministry of tourism. Here are the numbers to back the argument. In 2014, 2015 and 2016, 58 million to 60 million Indians travelled overseas for tourism or business. Globally, there are over 30 million people of Indian origin living in over 150 countries, with roots in India. Around 0.4 million Indian students are estimated to have taken admission in an overseas university last year. All parameters point to a healthy growth in the visa services business in the coming years.

In India, VFS Global serves 37 client governments (including 20 Schengen States), out of 381 visa application centres. BLS International provides services across 50 countries. For the Indian government, BLS has visa centres in the Embassy of India across Vienna (Austria), Beijing and Shanghai (China), Hong Kong, Vilnius (Lithuania), Kuala Lumpur (Malaysia), Oslo (Norway), Oman, Manilla (the Philippines), Warsaw (Poland), Moscow and St. Petersburg (Russia), Singapore and Madrid (Spain), among others.

BLS is also an authorised service provider for attestation of documents by the Indian Ministry of External Affairs (MEA). It provides services to the Embassy of Kuwait, the High Commission of Malaysia and several others in visa/attestation of documents/Apostille in India. The Apostille stamp is a square shaped computer generated sticker stamp, pasted on the reverse of the document by the MEA. Under normal circumstances, once the document is Apostilled, it does not require further attestation.

Aggarwal proudly announced that BLS Inter-national was the only Indian company competing on a global platform for visa services or identification data services. “We are currently bidding for global visa outsourcing contracts in countries like Thailand and Myanmar. We processed nearly three million applications last year and expect to double the number in FY 2017-18.”

A VFS Global spokesperson shared some numbers to back the claim that the company was a market leader in India. “Annually, the company processes over four million visa applications in India. Worldwide, the company processed 23.22 million applications in 2016,” the spokesperson said. Recently VFS Global achieved a milestone, by processing more than 100 million applications. “This is indeed, a proud moment for us at VFS Global, as we have achieved another milestone,” said Zubin Karkaria, CEO, VFS Global Group. Karkaria was in the capital recently for the launch of the Chinese Visa Application Service Centre at the Shivaji Stadium Metro Station.

Karkaria is the first Asian to head the 110-year-old Switzerland-based Kuoni Group as its CEO. While visa services will continue to be the growth driver for VFS Global, the company is also expanding its expertise in projects like e-passports, resident permits, national identity schemes, driving licences, among others. “Our biometric solutions are used in 113 countries by 31 client governments and we have processed over 31 million biometric enrollments since we began in 2007,” Karkaria had told a Dubai-based publication in April 2016.

BLS Blooms
While the revenue from VFS Global’s India business is not known, BLS International is listed on the Indian stock exchanges. It reported a revenue of Rs 550 crore for FY ’16. “Around 70 per cent of the revenue came from inbound travel in India,” said Aggarwal. While we could not independently verify the numbers, but a back of the envelope calculation pegs the size of the revenue for the market leader at around Rs 600 crore to Rs 650 crore in the last fiscal.

The emergence of BLS International can be gauged from analysing the global visa application data points. In 2015, VFS processed 21.91 million applications globally and 23.22 million applications the next year, an increase of only around 6 per cent. In terms of India numbers, Aggarwal said BLS International had processed around three million applications in 2016 (e-governance + visa + other services). “We are optimistic of doubling the number of visa applications in 2017,” said Aggarwal. For now, VFS Global continues to process around four million visa applications in India alone. Globally, VFS reported a strong growth in 2015 whereby its turnover went up to CHF 316.5 million from CHF 270.8 million in 2014. In US dollar terms, VFS Global’s turnover went up by around 16-17 per cent.

Growth Drivers
Two recent achievements in the shape of new projects have bolstered BLS International’s confidence. Firstly, it is already part of India’s first e-governance model in Punjab. “We have opened 2,147 Sewa Kendras in total and recruited nearly 5,000 people to provide over 223 citizen-centric services, including learning drivers licence, death, birth, caste certificates across Punjab. We have reached out to the rural population in 22 districts of Punjab,” Aggarwal said, adding that other States like Odisha, Maharashtra, Madhya Pradesh and Haryana among others, were also considering replicating the Punjab model. The company said it has processed nearly 1,50,000 applications through this project and expected to process more than half a million applications in FY 2017-18. It has recently bagged a global visa outsourcing contract from Spain MAEC (Ministry of Foreign Affairs and Cooperation - Spain), to leave its footprints across Europe. “The contract is worth 175 million Euro and allows BLS to exclusively process Spanish visas globally. We turned the challenge into an opportunity by rolling out 53 offices in 37 countries within a week of the announcement of the contract. We have till now processed more than 1,60,000 applications since December 2016 and expect to increase the number by 10 per cent year-on-year over for next five years,” said Aggarwal.

“Through this association, we intend to make Spanish visas effortlessly accessible by providing services in many small countries like Algeria, Ecuador, Bolivia, Kazakhstan, Tunisia, Mauritania etc.,” he said. Referring to its overseas business, Aggarwal said that for Russia, BLS was processing around a billion applications annually and was now targeting global contracts in Canada and Thailand that had till now been serviced by VFS.

VFS Global is also ramping up its business in India. “In the first quarter of 2017, we have won some key contracts in all regions where we are present, and are in the process of completing ‘co-ordinated’ global rollouts of Visa Application Centres for some of our client governments,” the spokesperson said. VFS Global won the Austria global tender, involving setting up of Visa Application Centres in 119 locations around the world.

“As Russia gears up for the FIFA World Cup — we rolled out Russia Visa Application Centres in 14 countries in Western and Eastern Europe, Asia, and the Middle East over the last seven months alone. We are in the process of rolling out Belgium Visa Application Centres in 11 countries (Saudi Arabia, China, UAE, India, Nigeria, Pakistan, the Philippines, Palestine, Thailand, Turkey, and Vietnam), after winning the contract through a competitive process last year (August 2016),” the spokesperson said.

VFS Global said it had been given the opportunity to expand visa processing networks for the Government of India in more countries. “In the next few months, we will be rolling out centres for the MEA in three more countries — Spain, Thailand, and South Africa. In total, we serve the Indian Government in 12 countries,” the spokesperson said.

The growing inbound and outbound traffic provides ample room for both BLS and VFS, who no doubt, will continue to fence with each other for business in the days ahead.