Sectors in Asia that seem relatively immune from the current slowdown are education, healthcare and retail. More households in India have no qualms about forking out Rs 40,000 (US$858) annually to enrol their infants and toddlers at top quality play-schools or private education programmes at international franchise chains, in a country where per capita income is less than US$1000 a year.

In South Korea, a country infamous for its fiercely competitive academic system, doting parents are not flinching from costly private tuition bills amounting to an average of 646,000 won (US$543) every month. In a recent poll, 39.6% of Koreans named education spending as the last thing they would cut back on.

Korea’s consumer expenditures on education grew at its highest rate in 5 years to reach 15.3 trillion won (US$13.7 billion) during the first half of 2008, up 9.1% from the same period a year ago and accounting for 6.2% of total household spending.

The size of South Korea’s private education market is estimated to have grown to 30 trillion won (US$26 billion), with the English learning industry taking up nearly half of the market share. A number of global private equity funds have taken note of the trend to capitalize on the lucrative private education market.

TStone Corp. made an investment of 60 billion won (US$49 mil) in Time Holdings, ‘hagwon‘ in Korean or a private cram school popular with middle and high school students. The Carlyle Group had invested US$20 million in Topia Academy, a private institute specializing in English education. Wall Street Institute Korea, an English language institute for adults, received 7 billion won investment from Boston Venture Capital and Korea Investment and Securities.

In August, US private equity firm Riverside Company made its first foray into Korea when it invested 20 billion won (US$18.4 million) in leading preschool education learning franchise Wiz Korea.

The early childhood care and education market in Asia is also a thriving business in the region, driven by the increase in number of working parents with higher incomes and growing awareness of the importance of early development.

The market size of India’s preschool sector is currently valued at US$985 million and projected to grow at 28.3% per annum to reach Rs 14,000 crore (US$3 billion) by 2012, according to brokerage firm CLSA Asia-Pacific Markets. Nearly three-quarters of India’s over billion population is under the age of 35 years.

India’s largest education services company Educomp acquired a 50% stake in Mumbai-based pre-school chain EuroKids International for 390 million rupees (US$8.5 million) last month. Educomp plans to build a network of 1000 franchisee-run preschools in 3 years, targeting annual revenues of US$44 million by 2012. 80-90% of franchisees investing in EuroKids are female entrepreneurs.

The franchise model in India works on the basis of low upfront capital needs. For instance, the typical investment is around Rs 15 to 20 lakh for a premium preschool while the investment is around Rs 5-10 lakh in smaller centres. The investment is usually directly proportional to the fee charged.

Parents in metros spend around Rs 40,000 (US$858) annually to send their child to a EuroKids centre, while their counterparts in small towns will pay Rs 10,000 a year. Another popular preschool chain, Kidzee, charges Rs 18,000 to Rs 30,000 a year in big cities while the fee in Kolhapur or Pathankot is Rs 9000.

Kangaroo Kids, which runs 60 playschools nationwide catering to India’s elite and middle class customers, charges around US$900 per annum. ABC Montessori, which has an alliance with the Academy for the Brilliant Child in the US, is planning to set up 400 franchise-based schools in India within five years.

The potential market demand for quality education in India has attracted KipMcGrath Worldwide Education Centres, which currently has a presence in 20 countries, and the company intends to set up 400 franchises for private tutoring across India. The Australia-based company expects to have 60,000 students and around 2,000 teachers in the next five years.

In China, annual kindergarten fees can vary, ranging from about 8,000 yuan (US$1170) to 100,001 yuan (US$14615) for the most expensive kindergarten.

It was reported that Chinese parents in Wuhan, capital of China’s central Hubei province, were upset over soaring kindergarten fees that cost more than university fees, the latter usually about 6000 yuan. Support for preschool education accounts for only 1.3% of the official budget.

The personal disposable income of Wuhan’s urban residents was 8668 yuan (US$1266) for the first half of 2008, up 14.8% y-o-y, while rural folks earn about 6700 yuan a year.

Preschool is not included under China’s 9 years of compulsory primary and secondary education. For example, Beijing currently has more than 1,300 kindergartens. Some 10% of them are sponsored by the government while the rest are funded by private enterprises.