When online education and skilling company upGrad decided to go for a repositioning exercise, the first thing it wanted to avoid was doing all the things that have given the entire industry a bad name. So it decided to tell consumers that it offers “lifelong learning” and urged them to invest in their future.
The campaign — with the core message of ‘aage ki socho’ — is running on the current season of the business reality show Shark Tank and is focussed not so much on quick ROI as on changing mindsets, says Mayank Kumar, co-founder and MD at upGrad. “Changing mindsets is not an ROI-driven objective but it is half our battle won,” he adds. In FY23, the company spent Rs 370 crore on advertising and marketing, devoting over 80% to digital and performance marketing.
Though the potential for growth is immense, there is little differentiation among players in India’s $6-billion ed-tech market, say experts. “The online skilling companies are similar in their business models, content, pedagogy, partnerships and learner communication. Differentiating themselves and creating a unique identity is a challenge given the nature of the business and the low entry barriers,” says Vivek Prasad, executive director, Avalon Consulting.
Changing the customer mix to focus more on the B2B model with institutional sales can be one way to achieve this. This model would allow companies to outsource entire chunks of training to specialists, suggests Prasad.
Many ed-tech companies are struggling with quality, financial issues and often spend too much on customer acquisitions, observes Kamlesh Vyas, partner, Deloitte India. “The reason that some companies are doing well is because of the focus on outcomes. Companies that have proven that they can deliver the right outcomes such as hikes in salary, landing a first job and getting a promotion have not really been impacted in the last couple of years,” says Kumar.
Is upGrad worried about consumer perception in the light of recent events? “I would not throw the entire ed-tech ecosystem under the bus,” argues Kumar, adding that he prefers to describe upGrad as an education company where tech is merely the medium.
upGrad nearly doubled its revenues in FY23 to reach 1,194 crore from608 crore in FY22. Its overall learner base crossed the 10-million mark last fiscal and its paid learners grew by 54% YoY. Some of its major growth drivers in the past year have been its international business and its B2C ‘study abroad’ programmes. Enterprise or B2B has also been performing well, accounting for nearly 30% of its business. As per its FY23 reports, upGrad served 1,110 enterprise clients in the last fiscal. Growth with profitability is the main goal now, and Kumar expects the company to turn profitable this year.
Naresh Gupta, co-founder & CSO at Bang In The Middle, points out that upGrad has been careful in curating its range of products and steering clear of controversy. “The brand’s current advertising is doing one job, which is creating a sense of bigness around its work. This is different from what it was doing earlier, which was more about small offerings and trying to get quick sign ups. Their current focus on ‘future’ is more in line with what the brand can build and own,” notes Gupta. As long as upGrad stays authentic in its offering, pricing and stance, the brand will not see a crisis of customer confidence.