e-learning market size is $27 million or Rs 105 crore

http://www.financialexpress.com/news/investing-in-elearning-proves-to-be-lucrative/314400/0

Poor infrastructure in the country has proved to be a boon for companies offering e-learning courses and solutions. Although several companies, and some varsities have been offering web-based learning, plenty more are in the arena as it is proving to be lucrative.

Even thought the Internet penetration is 4% in India, still the e-learning market size is $27 million or Rs 105 crore. It is projected to grow to $280 million or Rs 1,092 crore by 2012, according to an education sector report by the reputed brokerage firm CLSA Asia Pacific markets.

Says Vijay K Thadani, co-founder and CEO, NIIT Ltd, “In 1983, when we started offering e-learning material, we were using own network to deliver the material—so it was largely computer-based training at the time.” Currently, NIIT services 5,00,000 students in 32 countries and 750 centres. It has a library of 3,500 courses ranging from vocational courses including computer languages, English language and soft skills to suit all pockets. Thadani mentions that in the US, the e-learning market size is currently $4 billion or Rs 15,600 crore. However, the Indian market, despite a 4% market penetration shows promise. The reason happens to be due to the size of the Indian population (100 crore)—the absolute Internet users are over 4 crore, which is bigger than the population of many developed countries.
Says Vivek Gupta, vice-president, business operations, finance & strategy, StudyPlaces.com, an e-learning firm, “In India, rise of even 0.1% gives an additional volume of 10 lakh because of sheer size of population.” Started last year, StudyPlaces.com is an education portal in India that wishes to serves as a comprehensive one-stop-shop for education search. StudyPlaces got venture capital funding worth $3 million (Rs 12 crore) from Sherpalo Ventures, KPCB and Info Edge each contributing $1 million in last November.

Says Gupta, “We also have some products like online test preparation where we intend to charge from students in future. Currently, all the services are free for students.” The market size of competitive exams preparation in India is currently $1.6 billion (Rs 6,200 crore), according to industry experts.
With CAT projected to go online from next year, much of this would move to computer-based or e-learning, it is felt. Computer-based learning still has a market size of $150 million (Rs 590 crore), which is expected to grow to $750 million (Rs 2,900 crore) by 2012, according to the CLSA Asia Pacific market report.

Says Shantanu Prakash, MD, Educomp Solutions Ltd, “Over the years, we has worked with over 7,000 schools across India, serves over 40 lakh students and trained close to 8 lakh teachers.” Educomp was established in 1994 and aimed to use technology to enhance teaching-learning process in the school sector. Today, the company has expanded its scope to service emerging areas like online, vocational and core education (K12 schools), pre-schools, offline tutorial centres and social-learning networks.

Meanwhile, the current e-learning global market size is over $20 billion (Rs 78,000 crore)—grown ten-fold since 2000). E-learning market is expected to surpass $52.6 billion (Rs 2,05,000 crore) by 2010. Online tutoring is a $4 billion (Rs 15,600 crore) industry and is growing at a rate of 10%-15% per annum.

Worldwide market for online tutoring is estimated to be in the region of $12 billion (Rs 46,800 crore). India now earns around $15 million (Rs 60 crore) per year from online tutoring—10% of the total market share. Aptech, for instance, has had long experience in preparing content computer-based training (CBT) and web-based training (WBT). Says Nilesh Vani, executive vice-president, Aptech Ltd, “We are offering corporate training in multiple formats through internet and computers. Our corporate customers buy a course from our library with a licence. If a company buys a course for a base price of Rs 2 lakh, it can use it to train 300 users. So it proves cost-effective.” The corporate training market worldwide is expected to be $25 billion (Rs 97,500 crore).

Rajiv Aurora, COO, Gurukul Online Learning Solutions (GOLS), has partnered with the Amity—India’s leading private business school. This tie-up offers eMBA courses. He says, “Our focus is now B2B and offering e-learning solutions for the corporate sector, especially tier-II cities.” Info Edge (India) Ltd, parent company of Naukri.com, for instance, recently launched Shiksha.com, an education portal. It aims to be the most comprehensive one-stop resource for information on education. The company plans to invest $5 million-$10 million in the portal over the next 3 years, while the publishing house MBD Group recently launched MBD Alchemie an e-learning and tutorial project in the country for school students.

Meanwhile, the founder and CEO of Tutorvista, K Ganesh says, “For e-learning, education is the single largest growth sector in India, owing to our large population and the potential for the use of technology in education and training. Technology penetration in education is less than 10% currently, which is very low compared to a place like Korea where it is 90%.” According to him, a 100% e-learning model would not work for India. “India’s Internet penetration levels are very low and computers are very expensive here. A hybrid model, and not a 100% e-learning model, would work better here,” Ganesh added.

In India, Tutorvista offers e-learning for school students through Edurite, and has set up 50 physical centres to offer technology-enabled training through a classroom model. “We plan to set up another 250 centres across India during the next year, and 80% of these would be in villages,” he says. Among its services, Edurite offers computers to schools, with e-learning content including multi-media, animation, quizzes and even virtual experiments. For Rs 1 lakh, an entire lab can be set up for a school in a village. Tutorvista runs online tuition services globally, involving 600 teachers across 30 Indian cities.

Tarang Software CEO, V Rama Kumar says, “The industry is largely fragmented, one will not find any substantially large players. The existing companies range in revenues between $2 million to $30 million.” Kumar feels that the industry has not yet taken off to its full potential in India, owing to the high cost of classrooms and lack of faculty. “The potential is huge for e-learning in companies, given that businesses are expanding, and that training is a huge focus across industries. Prevalent attrition is also a big factor contributing to the growth,” he said.
Tarang offers end-to-end services including learning management systems in the e-learning space, with focus on IT and BPO sectors in particular. The company also works with sectors like manufacturing, automobiles and banks.

Kumar says that for corporate, e-learning modules are priced on an hourly basis. “Depending on the quality of the module, the prices can vary between Rs 1.5 lakh to Rs 2.5 lakh. The quality is gauged by the kind of content that you offer. For instance, pricing would be higher if you have used graphics, animation, interactive medium and so on.”
Universities like Delhi University and Amity University, UP, feel an online focus is necessary. DU that recently launched lessons in 10 subjects including physics, maths and English, with an initial budget of Rs 1 crore hopes that it will be useful to students. Says Deepak Pental, vice-chancellor, DU, “The 2,40,000 students who pursue open-learning have very poor connectivity. However implementation will be uneven unless we develop top-class content material.”

However cost of courses pursued on line is reduced. Says Amity University, deputy director, centre for e-learning, “We have been pursuing web-based learning actively since 2006. If the average fee for a management course is Rs 4.5 lakh, it comes down to Rs 45,000 in an online module and is therefore popular and they can pay in instalments. About 1,000 students in India and abroad pursue our on-line courses.” E-learning, perhaps is the way ahead for a country that lacks basic infrastructure—where schools and colleges are concerned.