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The eLearning Market in Asia-Pacific

By Cindy Payne, Managing Director
Asia-Pacific Connections Pte Ltd

March 2002

According to industry analysts International Data Corporation (IDC), the Asia-Pacific (excluding Japan) corporate eLearning market is expected to be worth almost US$233 million by 2005, with a compound annual growth rate of 25%. In 2000, Smith Solomon Barney estimated that Asia-Pacific accounted for 26% of the global corporate training market; however, in 2001, Asia-Pacific eLearning expenditure comprised only 1% of worldwide eLearning revenues. As such, instructor-based training still embodies 75% of all enterprise training in the region at present.

IDC notes that the largest markets for eLearning in Asia-Pacific are Australia, Korea, China and Singapore. As the most mature market for eLearning, Australia will account more almost half of all regional eLearning investment until 2004. However, this will change by 2005 when China and Korea are expected to lead the region in eLearning spending. In terms of industries, the financial sector is the largest user of eLearning within the region - approximately 40% of all training for financial institutions is done electronically. Asia-Pacific government spending on eLearning is also significant. Government investment in eLearning solutions is driven by a need for training in information technology (IT), as governments across the region look to eLearning as a means to bridge the global digital divide.

IDC expects the Australian eLearning market to be valued US$65 million by 2005 with a compound annual growth rate of 22%. The reasons behind the relative maturity of the Australian eLearning market include the standardisation of language with relatively few language barriers within the country, a top-quality infrastructure, national as well as state governmental support, a conducive sociological culture that supports all types of learning, and a widely-dispersed population. While IT-eLearning dominates the Australian eLearning market at present, non-IT eLearning, which may be vertical-industry-specific, function-specific or soft-skills-related, may grow to be on par with IT eLearning in the next 5 years.

Koreans are among the most web-savvy individuals in the world. In 1999-2000, they dominated global statistics with the amount of time spent on the Internet and the availability of broadband infrastructure within the country. These societal factors are helping to drive the growth of eLearning in a country which was badly hit by the 1997 Asian financial crisis as well as the recent global recession. IDC estimates that the eLearning market in Korea will grow at a compound annual rate of 31% to be valued at US$51 million by 2005, with the highest growth occurring in the year 2005. Non-IT eLearning should grow at a compound annual rate of 38%, compared to IT eLearning at 28%, though IT eLearning is expected to continue to dominate corporate eLearning initiatives until 2008.

In Greater China, (comprising the People's Republic of China sometimes known as the PRC or mainland China, Hong Kong and Taiwan), IDC expects the overall eLearning market to be worth US$60 million by 2005. The eLearning market in the PRC alone is expected to be worth US$37 million by 2005 and is targeted to grow at a compound annual rate of 41%. In that same period, Taiwan and Hong Kong should both grow at a compound annual rate of 13%. IT eLearning will dominate the Greater China eLearning market until 2010 when non-IT eLearning is expected to comprise close to half of all training done in this region. By 2010, both vertical-market-specific and horizontal-function-specific training are expected to play an increasingly important and strategic role in enterprises in the Greater China region.

A recent report released by eLearning vendor, Knowledge Platform, estimates that the total annual domestic training expenditure in Singapore was US$137 million by the end of 2001. Course creation and delivery accounted for only 10% of that spend, while investments in infrastructure such as knowledge portals, learning management systems, content management systems and training management systems comprised the bulk of the remaining 90%. With 99% broadband availability across the island, eLearning is set to grow as the 6000 multinational corporations with offices in Singapore seek to cut training costs. The report concludes that the most significant spend in Singapore's eLearning market will be driven by government investment. IDC estimates that Singapore's eLearning market will be worth US$27 million by 2005, with a compound annual growth rate of 18%.

The Asia-Pacific eLearning market is highly fragmented and complex, with both global and local vendors jostling for position and market share in an attempt to enter and grow in this infant market. In the short term, eLearning adoption within Asia-Pacific was hurt by the dotcom crash of 2000/2001 and the lingering stigma attached to e-business technologies, resulting in an overall backlash against new, expensive and potentially disruptive technologies. Even today, Asia-Pacific enterprises face the dilemma of choosing the right eLearning vendors and rationalising the hefty upfront investment to shareholders. As few local players have been able to offer a complete solution, solution providers have been forced to find partners to provide technical platforms or content. This instability has opened the door for established players from Europe and the United States to move into Asia-Pacific.

As the Asia-Pacific eLearning market matures in 2004 - 2005, there will be a much better appreciation of the benefits of eLearning technology. By then, we can expect to see localisation and customisation of content, the establishment of eLearning standards by Asia-Pacific governments and the improvement of regional infrastructure. Both public and private enterprises across Asia-Pacific will be forced to appreciate the cost benefits of eLearning as demand for training across the Asia-Pacific continues to rise. Once the cost benefits of the technology are highlighted and training budgets are tightened, eLearning will become a recession-proof technology.

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