India & ed-tech: growth & challenges
Poised to touch the USD 1.96 billion mark in 2021, the Indian online education market is growing on the back of a growing paid user base. Demand, supply and other macroeconomic factors such as cost of online education, young population, availability of quality education, employability quotient, internet penetration, disposable income, smartphone user base and other government initiatives will be responsible for the overall growth in this segment over the next few years.
There are five key growth areas for the online education market in India currently. These are:
- Supplemental education for primary and secondary students: Currently at $73 million, this market is poised to grow to $773 million by 2021. The growth is based on the need for better and deeper understanding of topics as compared to simply passing annual exams. The large number of offline student base, especially in tier 2 cities will drive growth for this segment.
- Online test preparation: India has several competitive exams and an equal number of coaching institutes with burgeoning classrooms. With less personal attention in these physical classes, students are looking for alternatives. With most competitive exams going online, students are preferring online courses. This segment is estimated to grow to $515 million by 2021 at a CAGR of 64%.
- Reskilling and online certifications: With a growing employee base, there will be an increasing need for reskilling and upskilling. These online certification courses offer such working professionals a chance to upgrade their skills without having to leave their jobs. With increasing acceptability of such certifications among employers, this segment is a significant one at 38% of market share.
- Higher education: There is an increased demand for alternative formats of higher education. With a large number of young working people, courses such as online MBA are very popular for those looking to enhance their careers without quitting their jobs. This segment will be backed by government’s push on digital reach and the vast pool for distance learning in India.
- Language and casual learning: Apart from the many professional online certification courses, there is a growing demand for online language learning as well as training for other abilities such as guitar playing. English is the most in-demand language.
With so many segments offering growth to the online learning market, it still isn’t a bed of roses for the segment. There are several challenges facing the industry as well:
- Availability and content pricing: One of the key challenges for this segment is the exact course content that students are looking for. With a high degree of personalization possible, students look for specific courses. Pricing of course content also happens to be a hindrance to adoption of online courses.
- Low awareness levels: A major problem is awareness of online course availability. Students are often not aware that a particular course is available online.
- Internet access: Despite several government initiatives, internet access hasn’t reached the remote areas in the country yet. This is a great barrier for students in this region as well as for providers.
- Too many brands: The competition is rising everywhere and now there are way too many brands providing online courses. It is difficult to choose which is better as well as which one will be potentially recognized by employers.
- Obsolete content: The current dynamics of the corporate world ensure that there is a constant need to upskill and reskill for their employees. However, the same dynamics ensure that the content needs are also continuously changing and old course content becomes obsolete very soon. Hence, there is a constant need to upgrade courseware and teacher knowledge as well.
Despite all these challenges, the online education market is looking at an upward trend and will transcend all the challenges to see its bright future.
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