Indian online education market to touch USD 1.96 Billion by 2021!
Google India and KPMG India recently released Online Education in India 2021 research report.Click on the below link to read the full report:http://bit.ly/2u9tYYA
This report highlighted the growth opportunity in India's online education industry. According to this report the Indian online education sector is expected to grow over 8 times between 2017-21 and reach a market size of USD1.96 Billion! The current Indian online education market size is USD247 Million. According to this report India has the world's 3rd largest higher education sectors in the world with over 1.4 Million schools and 36000 higher education institutions with over 227 Million enrolled students. However this sector faces huge challenges especially w.r.t. access to quality educational facilities, resources and learning outcomes.It is here that Indian's online education market has a huge role to play. The Indian online education market is currently worth USD 247 Million and is already the 2nd largest E-learning market after the USA.Below are key highlights from this report. As VSPL focuses on providing Online certifications, below we have highlighted key findings of this report w.r.t Professional Skills Development and Corporate Training.
Online Education: Learning modules which can be accessed by individuals through internet enabled devices
Reskilling and Online Certifications (ROC) Market: Courses designed to assist users in skill enhancement, which may result in certifications. Reskilling offers standardized product offerings resulting in certifications. These certifications enable horizontal and vertical career movements.
Demand for online education is set to explode during 2017-2021 with a CAGR of 44% and this market is expected to grow by 8X in the next 5 years.
Current market size of education market in India is $100 BB.
Current market size of online education in India is USD 247 MN and number of learners is 1.6 MN. This is expected to grow to USD 1.96BB and 9.6 MN learners.
The key drivers of overall online education growth are:
|Lower cost of online education VS offline education||Employability quotient|
|Increasing Internet penetration||Government’s digital initiatives|
|Availability of quality education||Rising usage of smartphones and tablets|
Key benefits of online education for India's ROC (Reskilling & Online Certifications) students
Flexible batch / start dates
Variety of study materials
Top sources of information about online ROC education players brand awareness
Top reason for selecting a ROC brand - Quality of course content
Learners prefer laptops over mobile phones for accessing content
Online education to be backed by a phenomenal rise in paid user base.
Preferred Access Devices for ROC learners
Key Growth Drivers for ROC Online Education
Presence of large working age population and increasing requirements for skills upgradation / reskilling is pushing the growth of vocational education in India.
Improved Internet connectivity and adoption of digital payment methods have singularly aided in the growth of online education.significant increase in Internet population from 2011-2016 with overall internet penetration@31%
409 MN Internet users in 2016 are expected to grow to 735 MN by 2021.
Exponential rise in smartphone sales to 290 MN (2016).
Young population open to online education
Rising disposable incomes
Key Highlights for Reskilling & Online Certifications (ROC) Online Education Segment
Currently is the largest subcategory accounting for USD 93 MN. 2017-21 CAGR 38%
ROC Accounts for 38% of the current market
Driven by healthy adoption rates by IT professionals. reskilling / online trainings for certifications is currently the largest category , driven by IT professionals with a preference towards online trainings for skill development / enhancement.
2021 ROC market size USD493MN
Technical certifications are the most popular ROC courses
Driven by increasing reskilling and upskilling needs of working executives in India.
The Future Outlook for Online Education in Reskilling and Online Certifications Segment
Gamification enhances user engagement. Components of game based learning include simulation based concepts , incentive based learning, badges and likes. By making learning fun and interactive , learner knowledge acquisition increases.
Collaboration of online and offline channels to provide ubiquitous content and learning. Online players to provide offline touchpoints such as meetups, workshops etc. Further offline players to broaden their online components to provide VAS and enhance overall learning experience.
Online education to be driven across age groups to meet 3 kinds of needs.
Employability- Need to stay relevant in the job market
Social Learning- Causal learning and social skill development
Entrepreneurship- Enable entrepreneurship
4.Business Model Evolution in line with changing customer requirements
Increase perceived value of online education through tie-ups with industry for co-developed content. Such tieups assist in co-creation of industry certified content , which enhances overall acceptance of online education amongst the target user base.
Peer-to-peer learning (P2P) amongst students to gather pace. (Whatsapp, Twitter, Facebook, Google Hangouts, LMS Forums etc.)
Value Added Services such as internships and live projects along with regular courses, to provide hands on experience to students.
5.Technological innovations in the supply and demand ecosystem
Big Data and AI to assist in design of customized content
Content consumption will evolve through usage of wearable devices and virtual labs
Data storage in the cloud will enable anytime, anywhere data access
Online Education Revenue Models In tutor market places, content providers operate on a revenue share model, wherein a % of the subscription fees paid by students is deducted by the platform as commission.
One time transaction
Learners pay per course / bundle
2.Pay Per Session / Module
Learners charged based on duration / nos of modules enrolled
Learners charges based on duration / nos of modules enrolled
Learners encouraged to share educational content and charged on the basis of shared content consumption
5. Advertising Commissions
Additional commissions charged from tutors who choose to be featured by the platform
Reskilling & Online Certifications: Stage of Development
Large customer base
Future growth driven by reskilling needs of new entrants in the working population
Current Market Scenario
|Consumption (Demand)||Online Platforms (Supply)||Product Offerings|
|User Base: Currently dominated by school students and working population.|
ROC Category Dominated by IT professionals
|Dominated by large sized players offering a wide variety of product offerings||Certain categories are dominated by standard courses, while others require adaptive, innovative course modules. ROC offers standardized course offerings resulting in degree or certification|
Category Level Market Projections
ROC is currently the largest category in the Indian online education industry, driven by IT professionals with a preference towards online trainings for skills development / enhancement.
Expected Future Market Characteristics
Enhanced Learner Support attracts learners to online platforms
Self-motivated, value driven users will research courses extensively online before making purchase decisions
Competitive differentiation by players via alternative technology enabled learning solutions
Value added services such as industry interactions, career counselling and soft skills development can further enhance customer retention
Online players are likely to move towards blended education solutions i.e. create offline touchpoints to enhance value
Practical component of course content to be enhanced through live projects offering real-world application of educational concepts
Customer feedback in terms of reviews and ratings will help generate trust in tuition marketplaces
Government initiatives are expected to enable infrastructure support in rural areas
Freemium model i.e. providing students an opportunity to assess course content and quality prior to buying decisions is likely to continue to drive adoption
Growth Drivers of Online Education
|1||Lower Cost||Online skill enhancement courses are 53% cheaper than their offline versions.lower infrastructure costs and rising student enrolments leverage economies of scale and reduce prices of online courses.~175% increase in cost of offline education from 2008-14.|
|2||Quality Education||Online channel provides quality education to studentsRegions and states with poor access to offline education witness higher enrolments in online courses.10 MN enrolments @10CAGR for open enrolment distance courses by 2021.|
|3||Employability Quotient||~280MN job seekers to enter job market by 2050. Unemployment rate at 5 year high of 5%.Annual growth rate for job availability at 2%.Increase in eligible working population 300MN (1991-2013) out of which employed population 140MN.|
|4||Govt Digital Initiaties||Skill India, Digital India, SWAYAM, E-Basta, Rashtriya Madhyamik Shiksha Abhiyan to enable infrastructure needed to enable students to study online.|
|5||Internet Penetration||Exponential growth of Internet penetration. 31% with 409 MN Internet users and 735 MN projected users by 2021. Increasing penetration of semi-urban and rural areas provide high potential for growth.Internet penetration will enable reach and increase traffic for the online education players.|
|6||Smartphone Usage||290 MN smartphone users currently in India, to be expected to grow by 180 MN new users by 2021.|
|7||Disposable Incomes||Disposable incomes in the country to grow by 55% by 2020 with India having the 2nd largest middle class till at least 2030.|
|8||Demographics||Currently 46% of population between 15-40 age group. Young population with high aspirations but lower income is a good target market for online education. Online education has higher acceptability amongst younger learners.|
Reskilling & Online Certifications Category Details
38% CAGR 2016-2021 due to need for working professionals to continuously learn evolving technologies and the demand from new workforce entrants seeking space.
Online adoption relatively high for technical certifications
Working professionals need to up skill / re skill opt for short term certification courses on niche subjects.
ROC categories is mature comparatively to other Higher Ed, Test Prep and Language / Casual Learning. This is due to higher adoption of online education amongst target users.
Online channel preferred due to convenience factor and shorter duration of courses.
Market Structure: Oligopolistic with a few large players accounting for a majority of the market share
Significant presence of international players in India and Indian players have a presence in different international market
Market Segment: Current market is predominantly B2C, while B2B segment rising due to increased emphasis by companies for employee training
Duration: 3-6 months
Product Delivery: Via Instructor Led Training, Live Projects, Case Studies, Assignments and Query resolution
Course Specific Subscriptions: More prevalent revenue models whereby user is provided faculty access, study material and issued training certificate post successful completion of the evaluation.
Duration Based Subscriptions: Users provided access to all courses for the duration of subscription
Value Added Services: Recruitment services gaining popularity for courses designed to meet industry standards.
Free Content Drives Online Adoption- Adopters access free content to get basic course understanding and then they pay for certifications
Constant Need for Reskilling in Industries- Large% of working population sees re skilling as a necessity for career progression and job role changes, creating consistent demand.
An average user signs up for 2 courses in a year and 5 courses in a lifetime.
Key challenge for existing players in this segment
Short Shelf Life > Constant Updates > High Costs
User Profile, Channel Preferences, Device Preferences and Key Challenges
Who is the current user?
Higher adoption of IT and IT related courses
Certifications related to business management , taken to progress in management roles, have a high adoption in Metros/Tier1
Adoption of tech related courses are evenly distributed across tiers, but other certifications have varied consumption patterns.
Adoption of niche courses e.g. arts & design, healthcare, social services have higher adoption in Tier 2 cities.
Why are students opting for online courses
|Key Motivational Factors To Adopt Online Education|
|Metro / Tier1||Tier2|
|Current Offline Access: High||Current Offline Access: Low|
|Convenience||Access to Study Material|
|Reduced Travel Time||Better Concentration at Home|
Due to the high availability of offline courses in Metro / Tier1 areas, students primarily look at online channels as a convenient alternative
How is the online content consumed?
Owing to the nature of their work, working professionals have easy access to laptops
As an increasing number of working professionals are opting for online certification courses, laptops are the preferred mode of course content consumption (92%)
Working professionals use mobiles along with their laptops(57%)
What are the key challenges faced by students adopting online education?
Availability of Internet a key pain point for current users
Content on certification platforms are majorly in video thus requiring huge bandwidth.
Once there is more awareness and the value proposition of online courses is clarified and communicated, issues relating to pricing and selecting the appropriate courses can be resolved.
Brand Selection & Payment Preferences-Why do students choose a specific brand?
Awareness- Driven via Internet searches
Purchase Decisions- Driven via Quality
Stage1: Discovery- Finding out about the brand
Brand awareness in this category is significantly research driven.
Result driven working professionals seeking certifications which add immediate value to their profiles are major adopters in this category.
|Modes of Awareness (%)||Metro/Tier1||Tier2|
Stage2: Subscription- Key reasons for subscribing to a brand
|Factors Driving Purchase (%)||Metro/Tier1||Tier2|
|Quality of Study Material||50||56|
|Value for Money||41||47|
Stage3: Engagement- Reasons for being engaged with a brand
|Factors Driving Engagement (%)||Metro/Tier1||Tier2|
|Download Enabled Content||44||47|
How are students paying for the courses?
Digital payments in Tier 2 cities lag behind metros/Tier1 cities for ROC category.
Higher preference for 1 time payment due to shorter duration of courses
|Mode of Payment (%)||Payment Period (%)|
|Cash||3||27||One Time Payments||60||48|
Acquiring & Retaining Customers
Students Using An Offline Channel
|Key Challenges Faced By Students In Offline Channels||Key Barriers To Adoption of Online Courses|
|Travel Time||Real Time Query Resolution|
Students Intending To Adopt An Online Channel
|Why Have People Intending To Use Online Channels Not Used It||Motivation Factors for Adoption Of An Online Channel|
|Lack of requirement||Convenience|
|Awareness||Reduced travel time|
|Lack of Interesting Courses||Self-Paced Learning|
Enhancing customer experience for online students
Employee motivated user traction and B2B offerings to gain pace in the near future.
Highly customized product offerings for specific industries is expected to witness traction over the next few years.
Existing players in online higher education segment are looking to diversify in this category
B2B:Expected category growth via product differentiation and service offerings by current players looking to cater to the B2B segment.
B2C: Rising disposable incomes and need to differentiate in the workplace will fuel adoption in this segment.