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We had last done estimation on Indian e-learning industry in 2009. It’s almost 4 years since we did that exercise, and much has changed in the Indian e-learning industry landscape since then. So did little research on what the current market scenario looks like, and all the findings are given below.
But before presenting the data, some definitions – we are defining e-learning companies as organizations who are in business of providing learning technology solutions (LMS, assessment solutions etc), and content solutions. We are Not considering education management organizations, and professional training organizations as e-learning organizations for the purpose of this research.
Also, many companies identify themselves as e-learning companies as per above definition, but considerable part of their revenue may come from other business streams, such as IT Services etc. We have normalized head-count & revenue data for those companies for whom data was available publicly or via our market research.
This is what the current Indian e-learning landscape looks like – India today has 200+ e-learning firms. Their distribution according to resource head-count looks like this –
Some interesting observations, when we compare this data with the similar survey we did in 2009 –
- This is an increase of almost 50% in total number of e-learning firms since 2009 when we last did a survey of similar nature (Approx. 210 now vs. approx. 135 then). This clearly indicates that domestic and off-shoring demand for e-learning solutions has grown considerably over last 4 years, making many more entrepreneurs to choose e-learning as their business’s focus.
- Most of this growth has happened in up to 50 headcount companies, whereas movement in higher headcount companies is relatively lesser. This validates common understanding that scaling up in e-learning business is not easy to achieve.
As per our current analysis, Indian e-learning industry today employs 18-20,000 people with annual revenue of USD 550-600 Million. The overall industry has thus grown at an approximate CAGR of 18% since 2009 (over 4 year period) when we had estimated the total industry revenue at around $315 Million. That’s a fairly decent growth rate given the Indian and global economic situation had been very fluid in this period. I can’t help but mention that G-Cube has grown at a CAGR of 38%+ in similar period – far outpacing the industry growth rate.
Indian domestic market is estimated to be around $50-55 Million (About Rs. 200-250 Cr), or about 10% of the total industry size.
This is how we see the next 3-4 years –
- Industry should continue to grow at 18-20% CAGR. As far as G-Cube is concerned, we will continue to outpace industry growth rate, and are targeting to grow at 30%+ CAGR in similar period.
- Indian domestic market has not grown as aggressively as we had predicted in 2009. However, I personally think that we are in much better position for uptake of e-learning now than we were in 2009. Tablet and high-speed Internet bandwidth penetration is rapidly increasing, which should see more and more corporate and educational institutes adopt e-learning solutions for their field staff and for their distant learners.
- Off-shore story is intact – cost arbitrage remains the biggest draw for companies to outsource work to India. However, some on-shore domestic companies are gaining the ability to do similar tasks in much lesser time than Indian counterparts negating some of the cost advantage of Indian companies. Indian e-learning companies would thus need to work smarter in coming years to retain their cost advantage.
We will love to read your thoughts on the above analysis, and also answer any of your queries related to above data. Please do also feel free to also get in touch with us at in**@gc**********.net for any of your e-learning needs.
Almost zero entry level barrier for someone to start elearning company is probably another reason why there's a growth in companies with less than 50 employees. In fact, there are a substantial number of companies with 10 or less employees according to your data.
The Indian domestic market is fragmented. Requirements are also fragmented leading. There are not too many "large" elearning initiatives. And where there are, they also start small and they meander through at a very slow pace, many just dying a natural death. Not too many companies who want to implement elearning have a clear strategy for it.
Many companies want some ready made product with customization. I wonder if there's scope for more elearning off the shelf products companies.
Thank you Manish for sharing your thoughts. You have summarized state of the industry very succinctly. Scaling up is difficult, strategic e-learning initiatives in domestic market are far and few in number, and how to drive ROI is still not very clear to most of companies which leads to scaling down of e-Learning budgets after initial spurt.
Regarding OTS content - I do see space there as the competition is limited and is increasingly getting eliminated :). But there the challenge is that it's just too capex intensive game. There is no point going to the customer with 10-20 courses when the competition has 100's of titles (yes, these 10-20 will sell - but again, would it scale? Would someone be able to create channel to sell such small catalog?). In such scenario, how does a new company get into OTS market unless it's funded very well.
So, the analysis provided by you, does state that - mostly the growth of elearning companies is targeting offshore markets but India(Correct me if I'm wrong). I guess, Indian market is still far too long as far as organizations and educational institutions using LMS is concerned- which is bit bizzare actually.
Having said that, it would have been nice if there was also a comparison provided in terms of an approximate turnover and profits from targeting Indian market against foreign market
That is very insightful Manish.
What is your take on BFSI sector e-learning ventures?
Do you think they are making money, given that most of the banks go for traditional classroom learning model?
Any data on such e-learning players?(in terms of number of companies, top players and future trends for this market?)
Thanks for the feedback Gauri.
With regards to your query on BFSI sector - in our own experience, BFSI is one of the largest consumer of e-learning in India and anywhere else as well (in corporate space that is) - they tend to be large organizations with huge employee base, spread across the country/globe, have lot of regulations to follow, have lot of IT applications, and big sales and service teams.
However, for e-learning players to make money in BFSI or for that matter any other domain, they need to have more than just a set of IDs and Graphic Designers to create e-courses - in addition they need to have an understanding of customers business, subject matter experts, and skills to manage the complete learning cycle - from training need analysis to owning adoption of learning program. Then only will someone be able to differentiate oneself from hordes of other players and rise above the price war. Without naming names, I know of only 2-3 players in Indian market (including G-Cube :))who have such deep domain focus and resources to effectively offer right solutions to the customer.
If one is a generic e-learning development agency, then it's very difficult to sustain business and make money over a long term.
From where we see it, future for e-learning in BFSI and other sector looks great - business complexities are increasing by the day, more compliance's to follow, more demanding customers, growth pressures leading to rapid churn and skill development in workforce, and many of such factors are contributing towards the need to have continuous but much more effective training programs - and e-learning is becoming favorite medium of delivery because of its obvious advantages.