Dusty chalk and black boards are increasingly being replaced or switched between laptops and projectors at least in urban schools of India. This is just one aspect of technologies’ contribution. But yet another increasingly important aspect of education is online education system which is expected to grow at a CAGR of 52 per cent by 2021, as per KPMG. The Indian education industry is pegged at USD14, 400 crore by 2020, as per IBEF data. “Education and education technology is an evergreen area. The use of technology is growing and it will continue to grow,” said Sujit Bhattacharya, chief digital officer of CL Educate, a 2017-listed company.
Today, online education is gaining importance not just in India but around the world. As per IBEF data, India is the second largest e-learning market after the United States. The online education market in India is expected to become
USD 196 crore market by 2021, stated a KPMG report on online education.
Up until recently, this sector was not grabbing the eyeballs of the investors. In last two-three years, technology has brought down cost and newer technology has made consumption easy thus attracting investors in the space.
“Private investors would look at short term benefits which is not possible in this space as short term investments will not help in improving the quality (in the space),” believes Bhattacharya. In some way, investment
sentiments can be sensed based on the trading price of various listed education (related) companies.
In the meantime, interest among foreign investors in this sector has been increasing since 2012. According to Department of Industrial Policy and Promotion (DIPP), the total amount of Foreign Direct Investments (FDI) inflow into the education sector in India stood at USD 138.362 crore from April 2000 to December 2016. “Edtech has attracted a lot of investment over the last two years. The space has become huge,” said Hardik Shah, director of E-class Education System, which is wholly-owned subsidiary of Sundaram Multi Pap Ltd.
However, he believes that mindset of the investors have to change as they need to understand that investment will take time to grow but it will grow.
Like any other content dependent space, content for online education is also upgraded or revised. There is a lot of free content that is available online but the key is to have content that caters to the needs of the students.
Bhattacharya believes that content will be commoditised due to Google and other (free) platforms but in order to stay in the game it is important to analyse, diagnose and recommend rather than adding more content. “Smartness around content is the best way forward.” According to Bhattacharya, it is curated content and not huge amounts of content that serves the purpose. He also believes that there is a constant need to carry out research and development (R&D) to keep up with the changing times. At present, CL Educate is developing new applications like Artificial Learning and Natural Language process.On the other hand, companies like E-class — which is a syllabus oriented digital company– content upgradation happens annually or whenever there is a change in syllabus.
Meanwhile, Adam Khorakiwala, founder and CEO of mGuru said, “Every week, we upgrade the content in our app.” 2015-formed mGuru is for K-5 (Kindergarten to fifth grade) students focusing on English and Math. He aims to have 10 lakh user base in India over the next year.
Khorakiwala is optimistic that the paid model, which would be driven by its users in tier I and tier II, will form the major chunk of its 10 lakh target. According to KPMG report, the paid user base is expected to increase from approximately 0.16 crore users in 2016 to 0.96 crore in 2021. Interestingly, E-class is present online and offline, has a strong presence with its offline model. “We are trying to promote offline model as there are many areas in the state that lack connectivity,” Shah added. E-class has various delivery formats which targets students of Maharashtra from standard 1 to 10.
Reason for growth
According to research and advisory firm Red Seer Consulting, edtech space has been growing fairly due to
• Shift of population from lower income groups to higher income groups
• Increasing internet and smartphone user base
• Treatment of online education material as both supplement/ complement to offline supplemental education
• Increasing wallet share of education
But many new startups in the space have not been able to break even due to increasing expenditure on customer acquisition and product improvement, stated spokesperson of Red Seer Consulting.
“Education is transforming and there is scope for many companies in the education technology space to grow. But multiple efforts at different levels by the government could be vital,” said an executive at Dell India. Dell executive believes that if the government starts recognising or measuring CSR beyond money and starts recognising activities by companies around education as CSR, it will be a game changer. On the other hand, Shah believes the space can grow further if government provides subsidiaries to schools that embrace technology. Adding to it, Bhattacharya believes that government-run projects will drive CL Educate’s growth in India. He added, “India is our biggest market and the growth here is limitless.”
At present, most companies are looking at B2C (Business to Consumer) model for growth. But according to KPMG, B2B (Business to Business) is going to become an important player in the space. Khorakiwala’s mGuru has plans to work with corporates and also CSR wings of various companies in order to grow further.