Research Report on the CORPORATE E-Learning Industry
China Distance Education (Information) April 2005
By the Market Research Office of China Distance Education

Ⅰ.  Preface

1.    Purpose
Chinese corporate E-Learning business, initially emerging in around 1999, has basically evolved as an independent branch of the networked education industry over 6 years fast development. This report studies the corporate E-Learning industry and provides a reference for audience.
2.    Definition and Classification
The term “E-Learning” is derived from “E-Commerce”. It is a new concept originated from the United States in Internet boom. In a broad sense, “E-Learning” refers to the education, training and study by means of electronic technologies; but in a narrow sense, it means such activities implemented via Internet, satellite and communication networks. Therefore, the narrow sense of such definition is applicable to this report. Although the VCD training and teaching among enterprises can be included into the broad-sense E-Learning, it is excluded in the research domain of this report.
3.    Research Object
The research of this report are mainly oriented at the market and industry elements with regard to enterprises (including governments, non-profit organizations and institutions) E-Learning, such as market prediction, scale, value chain, customer needs, associated enterprises, products, services and market competence, etc.
4.    Data Source
The data referred to in this report are the first-hand and second-hand data acquired by this Office.
5.    Scope
This report focuses on the E-Learning status of Chinese mainland enterprises, which differs that of in regions of Hong Kong, Macao and Taiwan, therefore their E-Learning status is not considered in this report.
6.    Methodology
The research methodologies of this report include: questionnaire, customer interview, expert interview and literature study.

Ⅱ.  Market Scale and Market Prediction of Corporate E-Learning
1.    International Market Scale and Market Future
(1) Analysis of Marketing Environment
The irreversible momentum of the economical globalization has heated up the tense competence among enterprises. So how to create, maintain and enhance the core competitive edge has become a major concern for companies. Training, as an important method to enhance the company strength, has been recognized by more and more companies.
Corporate E-Learning, which has been widely applied in enterprises in U.S. and other industrial countries for its effectiveness and cost-saving characteristics, is valued as an important measure in improving the staff quality, skills and managerial level via the distance training within the enterprise and has been attached great importance.
(2) Current Market Scale
The E-Learning industry of international enterprises has seen a fast growth since 1999. According to the E-Learning Analysis Report of Bersin & Associates, the corporate E-Learning market grew fast in 2004. The Internet technology has been widely used in the training. At present, over 20% companies adopted the on-line methodology. The entire E-Learning market, including the training content, services and technical products, has amounted to 12-14 billion USD, while only 16% trainings were transmitted on-line. Currently, most E-Learning clients are from developed countries, such as U.S., Japan, U.K., South Korea and Canada, which formed a comparatively mature corporate E-Learning industry.
(3) Prediction of Future Market Scale
According to IDC prediction, the market scale of global corporate E-Learning will be 23 billion USD in 2004, and compound growth rate between 1999 to 2004 is as much as 68.8%, especially in the United States. According to Bersin & Associates data, the total market volume will be around 12-14 billion USD in 2004, 50% plus lower than that of IDC prediction. This might indicate an over optimistic prediction, nevertheless, it is an tendency that E-Learning as a technical means will infiltrate enterprise trainings, and as an increasingly growing industry, the E-Learning market will be very likely to reach the scale predicted by IDC.
2.    Chinese Market Scale and Market Future Analysis

(1) Analysis of Marketing Environment
Since China’s entry into WTO in 2001, Chinese enterprises have sensed the unprecedented pressure from international environment. The concept of “Learning Organization” has been spread and recognized. More and more enterprises attached importance to the issue of learning and training. However, due to the super complicated marketing environment, Chinese companies’ emphasis on training, with respect to diversified regions, scales and industries, differs a lot.
And influenced by the larger environment of enterprise training, this market is extremely unbalanced in China. Most E-Learning clients are limited to a few giant industries, such as telecom, insurance, bank and IT companies. However, the fact shows that the E-Learning market of Chinese enterprises has warmed up since 2004, and corporate E-Learning still sees a bright future in China.
(2) Current Market Scale
Since the introduction of the E-Learning concept into China, it attracted passionate followers in the network boom. Websites concentrating on corporate E-Learning have emerged in 2002, and there are more than 100 companies are engaged in corporate E-Learning, which formed a preliminary industry value chain.
However, generally, the Chinese E-Learning market is still at its preliminary stage and far from maturity compared to the high-growth-prediction of consulting firms. According to sales revenue statistics of researchers of this report, the sales of all E-Learning providers amounted to 100 million Yuan in 2004, which ought to be the realistic industry scale of Chinese E-Learning providers, and this scale refers to investment on E-Learning platform software, curriculum, training and other services, excluding the cost of hardware and appliances. So far, there are about 10,000 companies, governments and organizations that have implemented E-Learning in China Mainland.
(3) Market Potential
How large the potential market of Chinese mainland E-Learning would be? The answers differ from different organizations. iResearch Consulting once believed that considering the number of current SMEs 1 million, and if each enterprise of the 10% portion that ready to construct an internal on-line learning system spends 100,000 Yuan on this project, the entire corporate E-Learning market would be over 10 billion Yuan. However, we believe that the analysis is just a simplistic calculation without taking the E-Learning-affecting factors into account, therefore it cannot be applied to mirror the real market potential of corporate E-Learning.
As for the existing E-Learning customers, small enterprises have little need for E-Learning, and most customers are large and medium-sized, especially industry giants, in addition to the knowledge-intensified SMEs. According to data, there are about 50,000 large enterprises (usually refers to a company with annual revenue of 30-50 million Yuan and 300-500 employees, which also vary from different industries) in China. Assuming 20% (this percentage is drawn from their western counterparts) of them receive E-Learning, the large companies that implement E-Learning will amount to 10,000. At present, the E-Learning investment of each company ranges from tens of thousands to over one million (excluding the infrastructure construction). According to this report, the E-Learning potential of Chinese mainland enterprises is at around 1 billion to 2 billion Yuan. The market volume will grow to 800 to 1 billion Yuan in about 3 to 5 years.