India LMS Market Profile At The Turn Of The Decade

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India LMS Market Profile At The Turn Of The Decade

When you stop to think about the disparities of India, its unparalleled diversity, its strategic closeness to the world’s economic giants, and the largest youth population in the world ―with 356 million in the ages of 10-24 as of 2014― you must wonder why this learning economy does not make the education headlines more often. However, companies, investors and even Germany’s Ministry of Education are actively investing in the subcontinent.

WIRIS

The India Brand Equity Foundation (IBEF) initiative within the Ministry of Commerce & Industry has released a report on the education sector with evidence on the potential in digital learning. Home to the largest school systems in the world by some, India is closing in to the US at the top of the largest e-learning markets, with USD 2.3 Billion estimated for 2016 and an expected annual growth rate of 30 to 34 percent over the next three years.

India is a picture of complexity: on the one hand the country faces the issues of dozens of mother tongues, a social system that is difficult to navigate, wealth inequality that affect resource deployment across schools, and ongoing conflicts. However, as technological pioneer, the country has an envying unemployment rate, economic openness, and cutting edge initiatives such as a biometrics-based census and the move to a cashless society, which places India among the visionaries.

The vast education system in India is still not enough to provide quality services to the literal hundreds of millions of aspiring students. India is the largest higher education economy in the world by universities and second by enrollments. The government is teaming up with local and international organizations to procure capacity for 40 million new higher education students over the next years, as the tide shifts beyond 58% of the total education population. That’s right: higher education students have been over half the total students for years. The administration of Narendra Modi wants to establish 10 private and 10 public higher education institutions into the world rankings. In 2016, top nationals Indian Institute of Science Bangalore and Indian Institute of Technology Bombay, both public, were 503 and 511 in the Webometrics World Rank, respectively.

Foreign investments in Indian education have kept a steady rate for a decade and a half. US-led corporate training is estimated to grow at 11% annually up to 2020. Furthermore, service industries such as IT have grown by the hand of private and state-funded academic institutions. Public and private initiatives to increase literacy, digital and of the ordinary kind, and the competitiveness of the labor force, will continue to grow for the years to come (PDF).

Players going in for the long run are led by local startup Byju’s. It recently received USD 50 million from US venture capitalists including Chan Zuckerberg and Sequoia to increase their self-reported current 3.5+ million app users. Other movers include:

  • MOOC provider edX, bringing MIT and Berkeley classes for an expected half a million students over three years through education company NIIT.
  • Indian-descendant-founded Khan Academy and Tata are partnering to provide free education and content building capabilities.
  • Cisco, eBay and Intel are investing on growth-stage education companies, the latter focusing on servicing private schools through “optimised learning solutions“.
  • EduPristine is delivering certification-based online education using Moodle. It received USD 10 Million of additional funding this year alone.

EduPristine may not be a Moodle Partner yet, but Ballistic Learning, eAbyas and as of late Vidya Mantra do feature among the certified companies for the country.

A ‘bottom of the pyramid’ approach for Indian learning?

Aspiring entrepreneurial minds looking to enter India might be interested to know about the two complementary market strengths that have proven critical for the rapid development of a service economy in India. First, penetration of internet access and mobile devices in the inner cities. Comparatively, startups face minimal infrastructure requirements to enter. Second, large volumes of IT-skilled, English-speaking professionals with world-class skills and wages that still compete well against those of Europe, North America or Australia.

In terms of the opportunity, what looks as a weakness in the talent pool is a potential boon for providers. Only 15% of the population is considered “digitally literate” and has reliable internet access, but we are talking about a “minority” of 150 million. Ordinary literacy is on the rise yet still under the world’s average, 73 to 84%. And it is one of the smallest education spenders in the world related to GDP. A trend reported by IBEF is the emergence of the “international school” where Indian players team up with world-class players to increase competitiveness. The role of technology for knowledge transfer in this scenario is fundamental.

The efforts made by digital companies, such as the mentioned edX or Khan are at least compatible with a “bottom of the pyramid” approach, characterized by products that find an initial fit in the lowest income deciles of the market, which then reach upper ground more easily and profitably.

It does not mean there are not risks with venturing into India. The resourcefulness that characterizes Indian innovation is often met with high regard and quick accounts of positive impact, but their endurance or scaling sows doubt. A still evolving case on the matter is the “Hole in the Wall” model which seems to have garnered at last as many critics as fans. Other criticisms often involve bureaucracy, corruption, and a possibly uneven field for foreigners.

Nevertheless, the approximately 18,000 vocational training centers, including IT institutions, have yet to fill the estimated 40 million required seats by 2019. The tendency of training centers to expand their offer and standards to become a fully accredited higher education institution, a common occurrence, could be seen as an example of a “bottom of the pyramid” in education.

The Government of India is continuing its promotion of foreign investment in education. Unlike many countries, institutions can be 100% foreign-funded and liberalization clauses are taking place in upcoming laws and regulation, including the National Accreditation Regulatory Authority Bill and the Foreign Educational Institutions Bill. The government is aware that foreign investment is all but mandatory to fulfill their coverage goals.

On the district level, the better off are stepping up their game in e-learning and distance education to increase coverage, for the rural areas in particular.

Common practices by international companies and investors include:

  • Joint ventures with local digital education and VC companies, which seems to be on the verge of a fully-fledged “ICT ecosystem”.
  • Related to the above, the controversial practice of foreign campuses.
  • Cross-selling corporate training products to existing customers in other nations who are increasing their investment on the rubric in India.
  • Focusing on maximizing presence on the bottom segments of the market through free access and scholarships, to eventually turn students into skilled professionals and therefore paying customers.

The UK Government has developed an “Exporting to India” page with guidance about approaching the Indian vocational skills and education market. Also take a look at the US Government counterpart.

Read the report, which features regulatory framework and key player moves, at ibef.org. Or view a presentation (PDF).

 

Would you like to see more LMS market profiles? Do you have a lead for a tech learning market around the globe worth reporting on? Tell us! Leave a comment in the section below.

 


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