The Indian education market is estimated to be worth INR 5.9 trillion in 2014-15. With nearly half the population of India below the age of 25 and increasing penetration of Internet & mobile devices in this demographic, the growth of online education market in India is indubitable too.
Infrastructure and regulation issues might be slowing down the otherwise accelerating education space in India; online education, especially in the unregulated markets is poised for an immense growth. India’s online education market size is predicted to grow to $40 billion by 2017 from the present $20 billion.
The number of entrepreneurs venturing into the education space has increased but the innovation and startup success in the online education sector has not seen a comparable growth yet. We caught up with leading entrepreneurs in the online education space to get their inputs on the tremendous market opportunity and challenges that need to be overcome.
Aditi Avasthi, founder & CEO, Embibe, feels that one of the reasons for slower growth than expected is the lack of clear understanding of the problems in the education sector in India. She says,
technology based education companies in India are trying to address the symptoms shown by the market rather than diagnosing the problem to get a deep-dive understanding of the core issues. Many edu-tech products these days don’t satisfy any core need that technology can meet better than an offline solution. They are just trying to bring consumers online. These products end up being marginal and fade away quickly.
A large number of technology based education players in the market are trying to bring a lot of content online but are not focusing on the quality of content, delivery mechanisms, seamless integration of content and user experience on the online platforms. “There are too many people trying to do the same thing. The possibility of bringing innovation becomes very limited,” says Krishna Kumar, founder and CEO, SimpliLearn.
Unless an education technology startup justifies its existence by adding real value to a consumer’s learning process, it will be hard for the startup to survive, let alone scale. Lack of clear monetization and pricing strategy based on consumer needs has also led to only a few successful edu-tech startups surviving and competing in the booming online education market of India.
Infrastructure and delivery issues hindering online education’s growth
Aditi shares her two cents on the delivery and infrastructure problems that she has faced while building Embibe. She says, “Internet needs to be a lot more developed. You might believe you have a high speed 3G connection but many a times you don’t really have one. Infrastructure standards are not uniform. Sometimes the Internet connections stop working or slow down and customers feel that the product is not working properly.” For an analytics startup like Embibe,the slow response time from the browser can affect product’s performance and in turn adversely affect user experience.
Krishna adds another perspective to it and considers a robust and effective content delivery mechanism on mobile a very interesting problem to be solved. He says, “I have not seen much good innovation happening on this front. If somebody can innovate the whole mobile content delivery process, it will work wonders.”
Payment collection is another area that needs a lot of improvements. In many cases, payment collection becomes a physical exercise. A large base of Indian customers is still not very comfortable using credit cards or doing an online transaction. “You can’t just tell a user in a tier-3 city that you can’t offer your product/service to him because he doesn’t have a credit card,” says Aditi.
Apart from the delivery and infrastructure challenges for startups in the online education space, there are some perception challenges as well. Krishna explains that when many education startups embark to solve a problem, they think of technology as their first challenge. It is just a perception that diverges startups from their path. He says, “In my view, technology is not a problem at all. The problem is content. How can you provide good quality content to the right person in the right manner? Technology problem is already solved and there are technology players trying to solve whatever is left of it and they are doing a great job." He adds,
Whoever is starting an education startup should focus on education angle and not technology angle. Focus should be on how to provide relevant, precise, to the point, high quality content that users can consume online in a convenient manner.
The opportunities ahead
“The real competition is not between two online training players. It is still between a classroom player and an online player. 99% of the training spends still go to the classrooms. Even if 10% of the education is delivered online in the coming years, it will open up a multi billion-dollar industry,” says Krishna. He adds, “If the limitations of online interactions are handled smartly and innovatively, online education wins hands down as compared to offline because of the price and convenience it provides.”
Krishna foresees a strong trend of content players coming in the market catering to serve a particular niche such as finance training content, legal training content etc. He adds, “Another area that may catch up soon is the horizontal play; the marketplace kind of concept -- a place where anyone and everyone can contribute and learn from each other.”
The unregulated markets have a clear edge for fast growth and the test preparation space seems especially going strong, feels Aditi. The spend and consumption in the test preparation space is up to consumer discretion and in a free market it always favors a high quality product. She says, “Consumers are quick to decide who is offering them a higher value and decisions are left completely to market needs and consumer choices. If you push a good product out in such markets, your pricing is reasonable and you have basic tactics of selling in the market, things can really take off.”
She adds, “Vocational training, another niche in the unregulated education space, is expected to grow very fast. Skill development leading to employability and skill augmentation leading to higher output at work and better salaries, both seems to be on a growth path.”
The regulated markets, such as the K-12 and higher education, are the hard nuts to crack for education startups in India. Aditi says, “Startups making a strong mark in this space will need to consider all the stakeholders in the system, understand their problems, find a solution that integrates all the solution components and deliver the solution in a way that aids and empowers the teacher’s style and flexibility.”
3 suggestions to budding education entrepreneurs from Krishna and Aditi
- Do not try to build something in isolation, be in close contact with your customers and adapt your product as per their needs.
- If you try to just make the offline process a little smoother by brining it online, it is like someone is giving you vitamins when what’s really needed is a morphine. Use technology to solve a problem and help in achieving a tangible improvement in a kid’s performance.
- Focus on teacher enablement rather and not on teacher replacement.
Entrepreneurs like Aditi and Krishna have set themselves audacious goals to crack the online education market in India in a big way. We are sure it is only a matter of time before global leaders emerge in this space from India.