market research india - vocational training market in india 2009
TRANSCRIPT
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March2009
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ExecutiveSummary
Market
Privatesector
EstimatedworthUSD1.6bnin2008
Growthof25%p.a.toreachUSD4bnby2012
Drivers:DemandforskilledlabourinserviceandIT/ITeSindustries;inefficientpubliceducationDrivers&
,
Governmentencouragingprivatesectorparticipationalthoughlatterarenotregulated
Challenges: PoorperceptionandlackofsupportfromfinancialinstitutionsChallenges
Trends
ar ners ps e weencorpora esan voca ona ra n ng ns u es
Publicprivatepartnerships(PPP)forgovernmentownedIndustrialTrainingInstitutes(ITI)
Risingdemandforonlinetrainingmodulesandcorrespondencecoursesinlanguagetraining
PE/VC
firms
bullish
on
Indian
education
sector;
investing
in
vocational
institutes
as
well
Competition
AhighlycompetitivemarketwithplayersfocusingonspecificareasandexpandingacrossIndia
Majorplayers:
English FinancialServices Retail InformationTechnology Aviation/Hospitality
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VETA ICA IIRT NIIT Frankfinn
EnglishCenter IFBI K10 Aptech AirHostessAcademy
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MarketOverview
Trends
KeyDevelopments
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Indianeducationsystemcomprisesofformalandinformal
networkofeducationalinstitutes
IndianEducation
System
FormalEducationSystem InformalEducationSystem
Schools(K12)Professional
Colleges*Pre Schools
Vocational
Training
Multimedia
Coaching
Classes
Public Private Public Private inschools
andcolleges
Books
UnderthepurviewoftheMinistryofHumanResource
Development InstitutesundertheGovernment:Regulatorycontrol
ICSE/CBSE/InternationalBoards
Highereducationcomprisesgraduate/diploma/
professionalcoursesregulatedbyUniversityGrants
Commision(UGC)andAllIndiaCouncilofTechnical
Education AICTE
Institutesundertheprivatesector:Noregulationsinterms
ofestablishment,standardsmaintainedandcoursefee
charged
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Note:*GraduateandPostgraduatecourses
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Thegovernmenthasplayedanimportantroleindevelopingthis
marketbyprovidingfinancialandinfrastructuralsupport
Directorate
General
of
EmploymentandTraining
undertheMinistryof
LaborandEmployment
GoverningBody
Publicsectorundertaking:
IndustrialTraining
Institutes
(ITIs)
1913
such institutes
Privatesectorundertaking:
IndustrialTraining
Centers
(ITCs)
3552
such institutesInstitute
Twoyearcourses:
Dairying,farmmachineryandequipment
Accountingandauditing
Electricaltechnology,
air
conditioning
and
refrigeration
Certificatelevelcoursesoncraftstraining
Engineering:
ManufacturingSector 22
ServiceSector 27
XRaytechnician,healthcareandbeauty
Preservationoffruitsandvegetables,
foodservicesandmanagement
on ng neer ng ra es: Manufacturing 8
ServiceSector 41
Applicability
u en s n an s an ar n
schoolsaffiliatedtoCentralBoardof
SecondaryEducation
Studentsleavingschoolaftercompleting
anywherefromgrades812
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developmentandalsomaintaintrainingstandardsattheinstitutes
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Theprivatevocationaltrainingmarketisinitsnascentstageand
ishighlyfragmentedwithstronggrowthprospects
Vocationaltrainingmarketisestimatedtobeworth
USD1.6bnin2008
Overview MarketSize
and
Growth
4,000USD mn
Expectedtogrowat25%CAGRtoreachUSD4bnby
2012
Adeveloping
market
with
strong
opportunity
for
new
players
3,180
2,540
2,0301,624
1 000
2,000
3,000
,
r va ep ayersopera e reeo anyregu a ons .e.no
governing/regulatorybodies
MarketSegmentation
0
2008 2009e 2012e2011e2010e
PrivateEducationIndustry(USD40bn)
K-12
2%
2%
2%
Professional colleges
Tutoring4%
4%
3%
9%3% English Training
28%Financial Services
17%
49%
Child skilldevelopment
Pre-school
12%
Vocational training
Stationery
20%
14% Retail
Others
Airlines
IT
26%
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E-learning etcNote:Corporatetrainingprogrammesnotincludedinthisreport
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MarketOverview
Trends
KeyDevelopments
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Driversandchallenges
Drivers
Demandforskilledworkforce
increasingwiththegrowthinservices
sector
Challenges
Individualsperception
StrongdemandfromtheITboom
Inefficiencyinpubliceducation
system
Lackoffinancialinstitutionssupport
Increasinglycompetitivebusiness
environment
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Growthinservicessectorincreasingthedemandforskilled
workforce
Highgrowthinservicessectorwillgeneratedemandforaskilledworkforceandisexpectedto
boostdemandforenhancedtechnical/softskilltrainingprogrammes
Demandfor
skilled
labor
increasing
with
the
growth
in
various
sectors Impact
10
20
30
%
Growth in GDP
Growth inServices Sector
0
2007-082006-072005-062004-052003-042002-032001-02
Growingemploymentlevelsandtheneedforhighefficiencywilldemandadequatetraining
SectorEmployment
CAGR(%)2008 2011e
Airlines 60000 269528 65
Hotels 70000 192090 40
Retail 880000 3953070 65
FinancialServices Direct 220000 541283 35
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FinancialServices
Agents 600000 1476225 35
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HugerequirementfortechnicallyskilledindividualsintheIT
sectorwillbenefitplayersinthemarket
ConstantlygrowingdemandforalargeworkforceisexpectedtoenhancetheITtrainingmarket
whichisvaluedatUSD224mn
Demanddue
to
the
IT
boom Impact
2,000
2,500mn
1.62.0
2.2+22%
WorkforceDemandedbytheITsector
0
500
1,000
,
0.8
2004
1.1
2005
.
2006 2007 2008 2009e
ThenumberofnonITgraduatesemployedintheITsectorhasbeengrowingfasterthanthe
numberofITgraduates.
Thiscreatesanopportunityforprivateplayersoffering computercoursesincludinghardware
andsoftware
trainin
com uter
networkin
and
multimedia
DemandforEnglishlanguagecoursesalsoincreasingwiththegrowthinITEnabledServices
(ITES)andBusinessProcessOutsourcing(BPO)sector
ITESandBPOsectorconstitute67%ofthetotalITindustryandwitnessedgrowthof33%from200408
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Inefficientpubliceducationsystemandcompetitioninthejob
marketwilldrivevocationaltrainingprogrammes
Inefficiencyin
public
education
system Impact
Lowenrollmentsandhighdropoutratesacrossvariouslevelsoftheeducationsystemhasledto
inefficiencyinthesupplyofworkforce
Grade DropoutRate%)
Grade912 62
Grade68 50
Grade15 29
80%ofthegraduatesingeneralstreams(BSc/BA)areunemployableastheylackspecificskills
Inefficienteducation
system
is
creating
awareness
among
students
regarding
importance
of
channelizedskillbuilding
Thedynamicnatureofthebusinessenvironmenthasmadeit imperativeforindividualsto
developtheir
skill
sets
in
order
to
compete
effectively
ImpactIncreasinglycompetitivebusinessenvironment
Prospectiveandexistingemployeescontinuouslyworkonenhancingtheirskillsetsas
productivityisdemandedfromthetimeofinduction
Corporatesacrossindustriesareinterestedinupgradingtheskillsetsoftheiremployeesatall
levelsinordertocompetewiththeirglobalcounterparts
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Existingperceptionamongindividualsregardingvocational
training..
ThelevelsofvocationalskillsimpartedtotheworkforceinIndiacomparespoorlywithother
countries
Individualsperception Impact
888685
96100
%
Shareoflabourforcereceivingvocationaltraining
25
820
40
60
80
Individualsprefertoinvestintraditionalformsoflearning inordertoattainemploymentrather
thanusing
vocational
training
as
aroute
0
India Korea Japan Germany Canada Mexico
IndividualsarenotkeenonvocationaltrainingcoursesasadiplomacourseinIndiaisnot
comparabletoadegreecourseatthetimeofemployment
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..andlackofaidfromfinancialinstitutionsactingasabarrierto
growth
Financialinstitutionslikebanksprovidefinancialsupporttothestudentsfortakingadmissions
intheformaleducationsystemlikecollegesanduniversities
Lackof
financial
institutions
support Impact
Financialsupportisnotavailabletostudentsinterestedinenteringvocationaltraining
programmesforwhichinstituteschargeahugefee
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Market
Overview
Trends
KeyDevelopments
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KeyTrends
PE/VCfirms
showing
interest
in
educationsector
Partnershipsbetweencorporates
andinstitutes
Trends
Demandforonlineandcorrespondencecourses
Governmentencouragingpublicprivatepartnerships
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Vocationaltrainingmarketwitnessingtieupsbetween
corporatesandinstitutesforimpartingspecializedtraining
Corporatehouseshavebeguntoformassociationswithprivateplayersinthissegmentto
imparttrainingtoprospectiveemployees
Partnershipsbetween
corporates
and
training
institutes
Initiativestakenby Thisallowscorporatestoimpartcustomizedhighqualitytraining
Somesuchassociations
Finance
AnarrangementbetweenICICIandManipalUniversitytoformICICIManipalAcademy(IMA)whichholds
corporatesinorder
toscaleprofitability
, .
ThestudentscompletingthecoursewillberecruitedasAssistantManagerBand1gradeintheBank
InstituteofFinanceBanking&Insurance(IFBI),formedbyNIITwithequityparticipationfromICICIBank,haspartnershipswithICICISecurities,HDFCBank,KotakMahindraBank,YesBank,ICICILombardand
Infosys
FrankfinnInstituteofAirhostessesTrainingenteredintoatwoyearcontractwithAirDeccaninApril,07tobethesoleinstitutionfromwhichthecabincrewforAirDeccanwillbeselected
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Governmentfocusingonprivatepartnershipstodevelop vocational
institutes;Demandforonlineanddistancelearningincreasing
TheCentreapprovedPPPschemeinordertoupgrade1396ITIs,whichareinstitutes
developmentbythegovernmentandimpartvocationaltraininginvariousfields
Governmentencouraging
public
private
partnerships
(PPP)
Privatesector
Educomp,oneoftheleadingplayersinthevocationaltrainingindustry,hasbeeninstated
withtheresponsibilityofrunning18ITIsand12skilldevelopmentcentersinGujarat
Underthe
11th
Plan
INR310bnhasbeenallocatedfortheNationalSkillDevelopmentProgram
executionof
vocationalcourses
u v u u
Increasingdemand
for
online
training
and
distance
learning
DemandforonlinecourseshasgrowninIndiawiththeincreaseinbroadbandpenetration
VetaBestisanonlineprogramlaunchedbyVETAfortrainingintheEnglishlanguageforstudentsunableto
accesstrainingcenters
EnglishCenterisanothersuchinstitutionthatoffersonlinetraininginEnglishlanguage
Institutesareina
positiontotapinto
awideraudience
,
toattendlecturesduetoothercommitments(education/employment),byprovidingselfstudy
materialsalongwithonlineassessmentandsupport
RusselslaunchedtheirdistancelearningcoursefortraininginEnglish
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Vocationaltrainingmarketattractingprivateequityinvestors
PrivateequityplayersarebullishoneducationsectorinIndia
Withintheeducationsector,privateequityfirmsarefocusingonunregulatedinformalmarket
Increasedfocus
of
PE/VC
firms
Privateequityfirms
aretappingthe
likevocationaltraininginstitutes,coachinginstitutesetc unregulatedvocationalinstitute
marketDate Investor Target %Stake AmountUSD
Jan2009 IntelCapitalandHelionVentures GlobalTalentTrack n.a. n.a.
Apr2008 ZephyrPeacockManagementIndia WLC n.a. n.a.
Oct2007 SAIFPartners Veta n.a 10mn
May2007 SAIF
Partners ICA
Infotech n.a. n.a.
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Market
Overview
Trends
KeyDevelopments
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CompetitiveLandscape(1/4)
Institutes Overview
RevenueinINR
mn(FY08) Business
Focus
EnglishLanguage
FocusesonEnglishlanguagetraining
VETA Startedin1981,175centers ~800 Numberofcenterstoincreaseto500by2010
Growingduetoamixofownedandfranchiseeoutlets
Theyhave
trained
2.1
mn
students
BritishSchoolStartedin1975,20centers NA
MainpresenceisinDelhiwithfranchisesinPunjabandnearDelhi
.
English
CenterStartedin1995,30centers ~100
Trainingdirectedtowardsapplicationincorporateandretail
spheres
RusselsStarted
in
1986,
currently
owns
25andhasfranchised5centers70 Educatedover1mnstudents
Komark Startedin1996 NA Trainingdirectedtowardsapplicationincorporateandretail
spheres
Financial
ICA
,
has350centersofwith30are
owned
1200 Theyhavebeenfocusingonaccountsrelatedandsharemarket
relatedcourses
IFBI(NIIT
venture
Foundedin2006,haspresence
in22locations1200
EnteredintoapartnershipwithHDFCbankfortrainingtheir
students
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ey aveprov e e ucat onto~ stu ents
Note:Thelistisnotexhaustive
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CompetitiveLandscape(2/4)
Institutes Overview
RevenueinINR
mn(FY08) Business
Focus
Retail
Indian
Instituteof
Retail
Training
Startedin2007 NA Collaborationswithotherretailinstitutestowardsdeveloping
coursecontent
K10Startedin2003,has32centers
acrossthecountryNA Traininginretail,marketingandEnglish
IT
NIIT Startedin1981,currentlyhas473centers10,068
FocusedonITtraining, accountsfor90%oftheirrevenues
Imperiafor
management
programmes
EnglishlanguagethroughtheacquisitionofEvolv
Corporatetraining,90%ofrevenueisaccountedforbytheUS
Aptech
Startedin1987,currentlyowns
10centers,inadditionthereare
72%ofrevenuewasfromtrainingintheretailsegment
28%ofrevenuefromtraininginthecorporatesegment
EnteredtheaviationandhospitalitybusinessviaAvalon
Education
centersthroughwhichstudents
canenroll
Planningtodiversifyintothecorporatetrainingmarket
Increasedthenumberoftrainersfrom35to100anditsacquisition
ofSynergeticshasaddedtotheirexistingcontentlibrary
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Note:Thelistisnotexhaustive
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CompetitiveLandscape(3/4)
Institutes Overview
RevenueinINR
mn(FY08) Business
Focus
IT
Startedin1990,currentlyhas Focusedonhardwareandnetworkingtrainingprogrammes
120centers(104franchisees) PlansonexpandingtheirtrainingcenterstoChina&Nigeria
CMSStartedin1976,currentlyruns
60centers 230 Focuses
on
hardware,
network
and
IT
training
AviationandHospitality
FrankfinnStartedin1993,currentlyhas
120centers750
Theircentersaccommodate~17000students
TheyenteredintoastrategicalliancewithEdexcel,towards
introducinginternationallyacclaimedandhighlyratedBTEC Higher
NationalCertificate
in
Aviation,
Hospitality
and
Travel
Management
recognizedin110countries
Kingfisher
Training
Academy
Startedin2007 NA
Currentstudentstrengthstandsat250
Expectedtohave25centersinIndiaby2010
Provideeducationalloanstoeligiblestudentsthroughtieupswith
HDFC
FlyingCats Startedin2005,31centers NA
,
Alsoofferoneyeardiplomainairhostesstrainingandground
handling
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Note:Thelistisnotexhaustive
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CompetitiveLandscape(4/4)
Institutes Overview
RevenueinINR
mn(FY08) Business
Focus
Aviation/Hospitality
AirHostess Startedin1997,networkof40 Theircentersaccommodatebetween900011000students
Academy centers
TeacherTraining
Startedin1994 has32centers
EducomprunsitstrainingprogrammeundertheQUEST(Quality
EducationforStudents&Teachers)brandname
ucompacrossthecountry
ey ave ra ne eac ersaso
FormedpartnershipswithMicrosoftandWiprofortraining
Governmentandruralschoolteachersinspecificmodules
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Note:Thelistisnotexhaustive
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Market
Overview
Trends
KeyDevelopments
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KeyDevelopments
Date Development
Nov 2008 NIITlaunchedeGURUWeb&Multimediacurriculumforschoolchildren,basedonworldclassAdobeCreativeSuiteof
Products.Thiswasintroducedinordertoprovideacomprehensivewebandmultimediaeducationusingprofessional
software's.
Oct 2008 GlobalTalentTrackLtdisplanninganewventureinvocationaleducationwithPuneUniversityincollaborationwithCisco.Thetargetistoprovidehighqualitylearningopportunitiestoover500000annuallyby2012.Theinstituteplansonexpanding
this
model
to
three
other
States
by
2009.
July 2008 TheChiefMinisterofAssamurgedtheteaindustrytoprovidevocationaltrainingtotheiremployees.Thisinitiativehad
multiplerevenuegeneratingstreams.
Apr 2008 TheGujaratgovernmentislookingattheprivatesectortoimpartvocationaleducation.TheStategovernmentplansonprovidingbasicinfrastructure,suchaslandandbuilding,atpolytechnics,engineeringcollegesandindustrialtraining
institutes,and
fund
up
to
50%
or
INR
10
mn
towards
the
cost
of
training
equipment
and
machinery.
The
sectors
being
coveredareautomotive,chemicals,engineeringandtextiles.Theyalsoplanonpartneringwithprivateplayersfortechnicaltrainingin22ITIs.
April 2008 AjointeffortbetweenAptechandComputerSocietyofIndiawasundertakentowardseducating250000intheIT sectorinChennaithroughComputerBasedTrainings(CBTs),onlinetrainingsaswellasinstructorledtraining.
March 2008 ACentrallySponsoredScheme(CSS)isunderimplementationtowardsthedevelopmentofnewIndustrialTraining
Institutes ITIs in the NorthEastern states and Sikkim. The main ob ective of the scheme is to meet both ualitative and
quantitativeskilledandsemiskilledmanpowerrequirementforindustry,servicesectorandselfemployment.Theplanistoestablish22newITIsandstrengthen/modernize35existingITIsintheNorthEasternregion.
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