- By Shahan Sud and Atul Thakkar
A mix of rising unemployment and the coronavirus pandemic are guiding young Indians to tap into online education to step-up their game or to ensure that they continue their curriculums through online modules. Though this category has been there for a while, this paradigm shift towards adapting multimodal learning will help rewire learning India has been used to till date. And, as India battles the COVID-19 pandemic, this shift towards online learning will no longer be a choice – but rather become the new normal.
Online centric education that is currently being sought as an alternative to continuing the courses amid the coronavirus pandemic – with its accessibility and non-gated nature – is determined to drive the learning experience forward for Indians. These difficult times will set a precedent that will guide ed-tech companies to focus on bundling educational services rather than providing only edu-content as a premium offering. However, what would be crucial is to ensure its adaptability to India’s education market for which behavioural change strategies would be needed – both for the students and for the facilitators (for the latter are conditioned to a structured learning process where the physical presence of students is mandatory). In times like these educational institutions that are driven by facilitators having a similar approach and focus only on an offline model will see a contraction in their growth.
Given India’s at a steep learning curve, one would ask who is likely to survive this disruption. Though the education sector in India is a fragmented market, its primary customers are not only young but they’re also informed about what they want. In addition to this, reliance on ed-tech and online education alone is not feasible due tech-infrastructure constraints and the asymmetric permeability of this digital pedagogy among the regional-ways of learning. Given these idiosyncrasies the education sector is navigating through in India we believe three categories of players will survive:
Traditional Players: Large chains of educational institutions that have created a hybrid learning model where learning oscillates between offline and online;
Insurgent Players: Diversified players like Jio, Paytm, Amazon and Flipkart will enhance customer experience by providing e-learning facilities in addition to the host of other services that they provide in their annual subscription plans; and
Independent Schools: These consist of those schools that are dominant in a particular city and have effectively enabled their tech-infrastructure to boost learning and refine pedagogies.
Given these shifts are underway, we believe that companies focusing only on edu-content will have to add periphery service offerings to monetize their product offerings in the short-term. Those that don’t diversify will see their customer base plunge. Since the convergence of learning pedagogies at K-12 level is push driven, its impact is difficult to measure. Furthermore, rather than pivoting towards ed-tech in times of health emergencies (like the one we’re in now) we believe it’s crucial to integrate technology with traditional Indian teaching practices as it will create a multiplier effect – only if it becomes a norm, i.e., students are introduced to these complementary learning approaches early on.
Furthermore, this integration of technology and traditional schools will result in a positive externality wherein the schools’ physical infrastructure will be complemented by multiple shifts of virtual learning sessions. This will give rise to “Phygital Learning” in India. With this shift on the cards, K-12 players will need to re-prioritise capital expenditure towards hard assets and design strategies to build a host of virtual infrastructure that will drive the next phase of learning. Ergo, an asset-light model might be brewing in this segment, only to provide enhanced revenue streams for the same physical asset base.
However, as we move up the chain we observe that skill-driven online courses are pull driven. Though these courses experience moderate levels of price elasticity, they complement the standardized learnings received during Higher Education to provide students with technical skills that enhance their chances of employability. These skill-driven online courses will now provide universities with an opportunity to provide an array of hybrid courses (with different permutations and combinations) that will allow more individuals to enter into formal higher education.
As India learns to skill themselves again – amidst this turmoil – ed-tech and AI will be instrumental in nurturing a creative learning environment. And, behavioural changes that train Indians on emotional intelligence will be crucial to ensure that the next generation of Indians are fortified against the ramifications of an impending recession.
(Shahan Sud is an investment banking analyst at Anand Rathi Advisors. Atul Thakkar heads the education practise at Anand Rathi Group.)
