The sector is expected to present phenomenal opportunities for investors amid favourable government policies and rapidly rising demand.
The online education market in India is expected to grow by a staggering 50% during 2021-2025 to reach $5 billion by the financial year 2025.
That’s the forecast of Bengaluru-based market research firm RedSeer, which in a new report has found that India’s burgeoning EdTech industry will be driven by new reforms, including the increase in public spending (targeted at 6 per cent of the nation's GDP), relaxation in regulations governing degrees, supply side capacity gaps, need realisation among students and professionals and transition to a credit system of learning.
The phenomenal opportunities for the sector in India becomes even more apparent when compared against the global benchmark. The global e-learning market size is projected to grow $370 billion by 2026, from $226 billion in 2020, at a CAGR of 8.56% during 2021-2026.
Online education in India has witnessed an enhanced acceptance over a few years – but it’s the coronavirus pandemic which has heralded a boom for the industry. Online learning has become an integral part of schools, colleges and even in offices across India – with the advantage that such mode of education is easily scalable. The Indian government is also allowing the universities to offer fully online degrees - a change that could reshape the education industry in the country.
With the online higher education market in India slated to grow 10 times over the next five years, EdTech has certainly emerged as one of the mainstays of the post-pandemic economy for investors and practitioners alike.
"A key indicator of any industry remains the growth user base. In this case, the user base consists of the students and other categories including professionals with varying experiences, entrepreneurs among others," the report said. In India, it is expected to grow from 90 million individuals in FY20 to 133 million individuals by FY25.
The number of paid users are expected to increase from 1.2 per cent to 8.1 per cent in the next five years.
"The industry though has been seeing a gradual growth over the years, it received a major boost post pandemic. India has been showing strong growth in the EdTech sector, a similar trend like China," the report said.
China has shown significant market potential in the EdTech sector over the last years. The market stood at $250 million in FY20 and is expected to grow upto $295 million by FY25.