market research india - vocational training market in india 2009

7/31/2019 Market Research India - Vocational Training Market in India 2009

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March2009
http://www.netscribes.com/


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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

2VOCATIONALTRAINING INDIA.PPT

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


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


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%


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


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


l k b


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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


ey aveprov e e ucat onto~ stu ents

Note:Thelistisnotexhaustive


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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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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




23/26


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




24/26

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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