Indian e-Learning Industry : On a growth path

I had last done estimation on Indian e-learning industry in 2009, a synopsis of which is available at G-Cube blog. It's almost 4 years since I did that exercise, and I was wondering what the Indian e-learning industry landscape would look like these days. So did little research, 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 -

When we compare this data with the similar survey we did in 2009, some interesting observations come out, such as there 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.

Another interesting aspect is that 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.

Further, this data indicates that Indian e-learning industry employs 18-20,000 people with annual revenue of US 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.

On the domestic front, Indian domestic market is estimated to be around $50-55 Million (About Rs. 200-250 Cr), or about 10% of the total industry size.

While these were my observations on e-learning industry's current state and how it stands in comparison with what it was 4 years ago, I believe next few years are going to be even better for the industry. E-Learning 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.

Finally, off-shore story in e-learning 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 to retain their cost advantage.