Updated: Jul 12
“It’s windy down the roads of Palampur. Yet in no more than a few steps away, one can easily spot the dilapidated buildings, also called slums- full of dirt, cramped spaces, and something, something very unusual- children studying through apps in Tablets’’
In case you are wondering, no it’s not a joke neither a cooked up story. It’s the vision of the current policymakers to bridge the dangerously standing wall between India’s development and its abysmally low literacy rates, one that can entirely transform the Indian landscape. The EdTech industry projected to grow to a $1.96 bn market with 9.6 million active users by 2021 (source: KPMG report) could be (focus) just the right answer to it. But, are such big numbers really worth it or just one of those tricks up one’s sleeve to create an illusion in the minds of the consumers, one which big companies often retort to?
Lack of quality education- Challenge or opportunity?
Quality education on a whole is a big problem in India. With an illiterate population of 300 million adults (which is, by the way, one of the largest in the world) and only 3 out of 10 children able to read texts or perform simple subtraction, education is no doubt a challenge in itself. At least, that’s what the 2018 Annual Status of Education Report, or Aser, says. The yearly report, based on data from more than half a million students across 596 districts in rural India, paints a dismal picture of education despite enrollment numbers improving. In such a scenario, EdTech with its vision of providing quality education online through fun, interactive sessions by technology seems to combat the challenge on several forefronts.
Source- The Ken
The Indian EdTech buzz
Keeping the same idea in mind, EdTech startups have surely built a reputation and created a buzz in the ear of consumers and investors alike. From less than half a million subscribers and $32.64 Mn of funding in 2014 to more than 3 million subscribers and a whopping $700 Mn of funding in 2018, the EdTech industry has come a long way. Leading the stellar rise are startups like Byju’s, UnAcademy, Vedantu capturing the minds of Indian parents. Byju’s founded by Byju Raveendran with a valuation of $5.2 Bn has long past crossed the unicorn status with an active user base of more than a million as boasted by the company reports. On the other hand startups like Toppr, UnAcademy, Upgrad are also catching up at a rapid pace with a combined valuation of more than $500 Mn. Hence, it won’t be exaggerating to say that India poses as a global player in this segment.
Source- The Ken
Proudly boasting of gamification to bolster the pace of learning, these players work on a subscription-based model where after a learner finishes a certain part of the curriculum, the marketing team usually floods the person with calls to buy the premium model. A premium model costs around INR 15000-20000 for various learning courses, so it could be a cheaper and a better alternative for traditional offline coaching centers/ tuition, something which these startups aggressively show-off upon.
The EdTech industry in India broadly operates in the B2C segment, but B2B segments and C2C segments are also on the rise. These new players like Tutor, UpGrad connect teachers with students through technical assistance and provide industry-oriented courses by tying up with colleges hence expanding the horizons. When it comes to the target customers, the Indian market can be broadly divided into five categories as elaborated upon below-
Primary and Secondary supplemental education With a vision of disrupting the traditional tutor industry standing tall at 71 million+ students, the companies in this segment are focussed upon delivering quality content for K12 and a real-time enhanced experience by extensive use of technology. With personalized modules and aggressive marketing in place, this segment is poised to become the largest market for EdTech companies by 2021.
Test preparation Chances are that if you have ever prepared for any competitive examinations like JEE, CAT and a lot of others, you might have surely come across online apps taking place of the erstwhile coaching centers. Packed with mock test series, personalized scores, and regional content this segment would show impressive growth in the near future with a market size to be over $500 Mn by 2021.
Reskilling and online certifications According to a report by industry bodies FICCI and NASSCOM and professional services firm EY, 40% of India’s IT professionals need to reskill to stay relevant. In addition, the report states, 37% of the Indian workforce will be deployed in jobs that call for advanced skill sets. As such, the upskilling and certification market—already worth $93 million as of 2016—is expected to be worth $463 million by 2021, according to a report by professional services firm KPMG. A sizable pie to play for, something which is aggressively targeted by the players.
Higher Education Acting as a direct substitute to offline players, this segment has a high uptake among the working population specially in Tier-2/3 cities to bridge the gap between demand-supply for eligible students, hence expected to grow at a sufficiently good pace.
Language and casual learning Driven primarily by learning English, this segment is expected to continue growing as new players come up with modern, differentiated alternatives. The adoption is majorly seen in Tier 2-3 cities where a lack of quality coaching centers is prevalent. With an increase in internet penetration in the coming years, more and more of traction is expected.
Source- KPMG report
But, is the spotlight really worth it?
“Toppr helped our son identify his strength and weaknesses, leading to better learning”
“BYJU’S has helped me learn in a fun and interesting way. I love the mentors and the quality
of content is very good”
Do you see anything? No? Read again.
These fuzzy dipsticks used across different platforms by the major players appear to be more of a marketing trick than a testament to their success. Yeah, you got me. While testimonials do create a feeling of trust among the consumers, what is essentially missing from these platforms is their effectiveness and measurement of outputs, also known as RCT( Randomised Controlled Tests). While apps are a way to have fun while learning, the quality of content is what decides the make or break situation for consumers using these platforms. And a consumer engagement rate of 30% in 2018 across these so-called glamorous interfaces doesn’t really pose such a glamorous picture after all. This by no means delineates the failures of EdTech, but opportunities to look forward to. That is,
A future of opportunities
Internet penetration India has already experienced a significant increase in internet penetration in the past with 31% of the population using internet way back in 2016. With a projected growth of 735 mn users by 2021 pushed by demands from Tier 2-3 cities and next to zero internet cost, the shine is even brighter for the EdTech companies.
Industry-relevant upskilling/reskilling Progress precedes change, change precedes progress. Either way, change is inevitable and this perfectly justifies the industry all over the world specially India. Being one of the fastest-growing economies in the world, India is rapidly adapting to a vast sea-wave of changes that require re-skilling of the Indian workforce which also happens to be one of the largest in the world. (Coincident? Hah). This skill gap would be the major driver in the rapid rise of the EdTech industry.
Online-offline partnerships The EdTech space is set to witness a huge change in the business model with potential channel partnerships by the online players to establish offline touchpoints thus offering blended education opportunities. This would solely be responsible to build trust among the consumers and parents alike pushing towards a huge growth curve.
Government Initiatives The government has already realized the huge potential possessed by the EdTech industry to bridge the gap between the availability of quality education and the illiterate masses and to enable the infrastructure to promote the same, has undertaken several initiatives like SWAYAM, E-Basta, Skill India, etc. This comes as more of validation rather than benefits for the industry which no doubt has far better significance than the latter.
India is set to undergo huge socio-economic progress in the years to come ahead while keeping education in the driver seat. With eyes set on the goal and a huge growth potential projected ahead, is technology-enabled education or EdTech finally the answer to the century-old question of the Yang to the Ying of Indian education?
About the Author:
Rana Madhvendra: Student, startup enthusiast. I write long sentences and yet find myself to be a minimalist. Unironically, that's ironic.