Online learning surfaced as an extrusive trend during the COVID-19 pandemic. The world vehemently upskilled for professional and personal growth, driving the demand for technology-based online learning solutions in corporate and primary education. Globally, companies chased the gold rush in remote learning. This inadvertently defined EdTech as the ultimate manifestation of Peter Drucker’s probe-worthy quote, “We now accept the fact that learning is a lifelong process of keeping abreast of change. And the most pressing task is to teach people how to learn.”
Recent mass layoffs, user complaints, and reports of unethical practices have exposed the ugly underbelly of India’s EdTech unicorns
Research shows that as of 2021, the EdTech market was valued at $254.80 billion. The number is likely to reach $605.40 billion by 2027 with a CAGR of 15.52%. In the same year, the global corporate e-learning market was worth $22.5 billion, and game-based K-12 learning adoption increased by 99% since 2020. With rapid digitization and widespread adoption of technologies like artificial intelligence (AI) and augmented reality (AR), EdTech seems full of promises for elevated learning experiences, higher profitability, and newer investment opportunities. But the recent mass layoffs, user complaints, and reports of unethical practices have exposed the ugly underbelly of India’s EdTech unicorns like BYJU’S, Vedantu, and Unacademy. Economically, the global EdTech market has also sustained losses, driven by the collapse of the Silicon Valley Bank, which reportedly served over half of the US startups.
EdTech in India: The Good
While experts warn about growth saturation and profitability decline, one cannot ignore the flexibility, convenience, and other transformative impacts of EdTech platforms on learning modalities, such as remote learning, personalized and adaptive learning, and gamified learning experiences. Let’s take a look at the promises of EdTech that still stand tall:
- Shift from the One-Size-Fits-All Approach in Education: A digital survey found that nearly 89% of students believe adaptive learning technology is the best, and 49% cite personalization as an important factor for better learning. EdTech offers a refreshing change from the age-old method of classroom learning by offering tailored, personalized, and on-demand course content that can be easily adjusted to the users’ pace, interest, and preference to drive better learning outcomes.
- Catering to Underserved Areas: The affordability and quality aspects of online learning platforms help break the monopoly and serve untapped market segments in tier-2 and tier-3 cities. Indian government’s recent budget initiatives aim at leveraging digitization and AI in the education sector to bridge education and employability gaps. This move is helping accelerate the reach and adoption of EdTech platforms to build a credible workforce to fuel the economic engine.
- In-Demand Skills for Tech Jobs and Web 3.0: Despite job losses and decreasing investor funding, many EdTech platforms are catering to a new breed of users with in-demand skills that open up global opportunities in emerging technologies like AI and Metaverse. Tech companies do not want to compromise on the quality of talent hired to work on their product-building journey and business goals, but conventional education models cannot support the scale of disruption. Professionals with the latest industry skills and online course certifications are in high demand, and integral in preparing for the next Web 3.0 revolution.
- Visual is the New Vernacular: In 2023, nearly 84% of communications are visual. Also, about 62% of internet users prefer consuming video content daily. The use of visual interpretation of data enhances engagement, experience, and attractiveness of the content. These stats represent the potential impact of visual, interactive content embedded in the learning curriculum enabled by EdTech tools built on cutting-edge technologies like AI, AR/VR, and metaverse.
- Scaling Organizations’ Learning and Development Initiatives: According to a McKinsey global survey on reskilling, 75% of respondents find digital learning platforms tools most effective in skill building for the employees. Training employees with updated material on a budget and tight deadline can be an uphill task, which is made simple with EdTech.
EdTech in India: The Bad
Despite enough empirical evidence in support of the promises of EdTech, some potential pitfalls and alarming trends have cast a shadow on the industry and contributed to the downfall of many EdTech companies:
- Hyper-Competitive Industry: EdTech has been one of the most adversely affected segments in the Indian startup ecosystem, with 25 funded startups closing down in 2022. Notable companies like Lido Learning, with 1,000+ employees, canned operations along with SuperLearn and Crejo.fun. Staying afloat amid severe competition and high customer acquisition, job losses, and customer retention costs makes survival tricky for EdTech firms.
- Sky-High Pricing Models: EdTech companies often employ unrealistic pricing strategies from value-based to competition-based. This has invited criticisms regarding over-commercialization. Customers of K-12 and high school learning, most of whom are parents, have been reportedly forced into device ownership and long-term subscriptions.
- Unfair Practices and Customer Complaints: On January 2022, the Government of India issued an advisory for customers to exercise caution before sighing up for online courses. India EdTech Consortium (IEC), a self-regulatory body of EdTech firms, recorded over 1,400+ complaints on refunds, sales, and marketing within the first six months alone. And the issues and complaints reportedly run beyond the list recorded by IEC.
- Data Privacy Concerns: In 2021, the Human Rights Watch conducted a technical analysis on the prevalence and frequency of tracking technologies embedded in 163 EdTech products. About 145 of those products were found engaging in data harvesting practices without the users’ consent, which potentially put children’s rights at risk. Additionally, access to parents’ financial information and children’s personal information to third-party companies for behavioral advertising and re-marketing, invited further criticism.
- Misleading Information: In 2020, consumers were targeted with a dizzying number of ads claiming tall hopes and promises. WhiteHat Jr, owned by BYJU’S, advertised a coding curriculum to 7-year-olds to grab investor funding. Great Learning, a professional learning platform of the same parent company, faced allegations of misleading buyers with false information on their courses. Similar complaints were registered against Lido Learning, Simplilearn, Vedantu, and Jaro Education.
- Limited Scope for Hybrid Learning: Online learning models alone are not sufficient for holistic learning and development experience. The risk of prolonged screen exposure and lack of in-person interaction lowers the quality of learning. B2C Ed-tech companies catering to K-12 and higher education industries cannot deliver hybrid learning models, which is a key value differentiator and is needed to retain customers in the long run.
Final Thoughts
Like any industry, EdTech startups are bound to experiment and fail with inadequate insights into the market, competition, resources, growth potential, and existing gaps. However, despite the advantages offered by EdTech in theory, the many missteps, empty promises, and unethical tactics employed by prominent EdTech companies in India have damaged the industry’s reputation to a significant extent. To earn back the trust of stakeholders, from parents to investors, EdTech needs a serious revamp — with a focus on empathy, ethics, and industry standardization.
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Written By: Vanishree Bhatt