Market Analysis of Online Language Schools in India
The relevance of research
Online education is a rapidly growing global trend. In particular, it was a reset for the entire field of education. The use of the Internet has a great influence on the change in approaches to teaching foreign languages, which inevitably lead to a change in the methodology
Purpose of the study
Analysis of the state of the market of online language schools, assessment of the market size, analysis of competitors, as well as identification of factors influencing the market of online language schools
Content
Part 1. Overview of the Indian online language school market
1.1. Definition and Characteristics of the Indian Online Language School Market
1.2. Dynamics of the volume of the Indian online language school market, 2017-2021
1.3. Market structure by type of service provided in India
1.4. Market structure of online language schools by Union Territories
1.5. Assessment of current trends and development prospects of the studied market
1.6. Assessment of factors affecting the market
1.7. Analysis of sectoral indicators of financial and economic activity
Part 2. Competitive Analysis of the Online Language School Market in India
2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players
Part 3. Analysis of the consumption of online language schools
3.1. Estimated per capita consumption of online language schools
3.2. Market Saturation and Estimated Market Potential in India
3.3. Description of consumer preferences
3.4. Price analysis
Part 4. Assessment of factors of investment attractiveness of the market
Part 5. Market forecast for online language schools until 2026
Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators
Research excerpt
Part 1. Overview of the Indian online language school market
1.1. Definition and Characteristics of the Indian Online Language School Market
India is developing a huge number of programs aimed at efficient and high-quality digital delivery of educational services. The plans include the emergence of drivers of technological development throughout the country, which will give impetus to the development of Indian regions.
Changing the economic structure of the country, increasing productivity and competitiveness are impossible without the transition to progressive technologies. The introduction of new educational approaches and methods that meet the time and demands of modern society will be discussed.
The use of the Internet has a great influence on changing approaches to teaching foreign languages, which inevitably lead to a change in methodology. The number of foreign language classes conducted remotely is increasing.
To date, the entire mass of information technology can be divided into five categories:
- non-interactive (printed, audio, video materials, CD-courses);
- videoconferences (telecommunication means via audio, video channels and computer networks);
- video lectures (online and offline) - videos, YouTube, social networks, etc.; skype-training; blogs (network journal or diary), podcasts, webinars.
- massive open online courses (MOOCs) (Coursera, EdX, Udacity);
- mobile applications (Lingualeo, Busuu, etc.).
Computer technologies ensure the availability of educational materials anywhere and at any time of the day, which reduces the time for searching for information and makes it possible to study at an individual pace, and the use of video materials allows, if necessary, to re-view the video (the most interesting or difficult places), which facilitates understanding and understanding of the topic under study.
Anyone can enroll in a course, regardless of place of residence, age, networking skills, social status, there is freedom of choice, at any time you can complete the training. Most learners of online courses are weeded out in the learning process, since such courses require a high ability for self-organization.
Online learning includes all components of the standard educational process: goals, methods, learning tools, content, interaction with the teacher. The knowledge control system strengthens discipline, organizes and directs the activities of students, helps to identify gaps in knowledge, personality traits, forms a creative attitude to the subject and the desire to develop their abilities.
For language schools that operated offline before the lockdown, the need to switch to distance learning has proven to be a major challenge. Group classes, especially teaching children, are not so easy to organize efficiently in a remote format, and it is groups that have always brought schools the bulk of the revenue in the B2C segment.
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1.2. Dynamics of the volume of the Indian online language school market, 2017-2021
According to RBC, language courses are the most popular of all educational platforms: their share in the market turnover is ...%.
There is no exact data regarding the volumes of this market segment due to the specifics of education in this area - it is difficult for the tax service to identify the real turnover of any language school.
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The availability of the Internet, the introduction of distance education, continuous professional development - these factors provide a growing demand for online education, including online language schools.
The low entry barrier attracts a huge number of players to the market. According to the Barometer research project, most of the founders of online education projects had no previous experience in the educational field.
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Diagram 1. Dynamics of the market volume of online language schools, 2017–2021, billion Rs.
Market structure by type of service provided in India
The largest number of online schools offer the study of English ...
1.4. Market structure of online language schools by Union Territories
Since online learning is possible from anywhere in the country, schools are not tied to specific regions or districts. Thus, we present the structure of the market of online language schools in the Union Territories among students.
It can be noted that the population living in the Central Federal District of the country is more interested in learning foreign languages ...
Diagram 3. Market structure of online language schools in India by Union Territories, %, 2021
1.5. Assessment of current trends and development prospects of the studied market
Trends:
- Development of computer technologies and increasing the diversity and accessibility of education;
- Microlearning is the study of material in fractional portions, the division of a large specialty or course into mini-programs. For example, preparation for school and international exams, business and thematic programs;
- The concept of continuous education. More and more people are not in a hurry to complete their studies after receiving a diploma and become ""forever students"";
- Knowledge of English is becoming a basic skill that must be mastered, including due to the fact that the market is becoming more globalized and more and more often you have to interact with customers and partners from other countries;
- Shift in demand from face-to-face classes towards online learning and the use of smartphone applications;
- The growth of vacancies in companies that need employees who speak several languages;
- The emergence of studies that prove that distance learning is as effective as in-person learning;
- Accelerating the digital transformation of higher education. Universities began to enter into partnerships with media companies and jointly launch full-fledged educational programs;
- Blended learning is becoming the standard. The boundaries between online and offline platforms are blurring: services offer to combine different types of educational practices;
- Active inclusion of gamification elements in the learning process to maintain interest in the subject;
- The emergence of ready-made IT solutions for opening your own online school, which helped active teachers and tutors to arrange their services in their ""online school"". The opening of such ""author's language schools"" forced foreign language centers to make room in the market and caused an outflow of teachers from them. But the consequence of the appearance on the market of ""schools of one teacher"" was a decrease in the quality of education and the lack of its control;
- Integration of EdTech projects with formal education. Schools began to widely use digital solutions in the educational process, universities began to offer remote bachelor's and master's programs.
Perspectives:
- Integration of Zoom-like services and massive open online courses into the classical education system;
- Educational products will be personalized to the needs of both the customer and the user;
- Strengthening the IT infrastructure in school, university programs, additional and corporate education, as well as retraining teachers in accordance with new trends;
- Increasing number of international partnerships;
- Most exotic languages are predicted to disappear in the coming decades. Only the largest remain. Among them, English confidently takes first place;
- Online learning will become better. Due to the sharply increased demand for distance learning products, as well as due to competition, the level of industry maturity will also increase;
- Companies will prioritize finding engagement tools and experimenting with technologies and formats.
1.6. Assessment of factors affecting the market
Let's consider the main factors influencing the market and, accordingly, demand.
Economic
India GDP
GDP is a macroeconomic indicator that reflects the market value of all final goods and services produced in a year in all sectors of the economy on the territory of the state for consumption, export and accumulation.
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Globalization
The interest of consumers in learning languages in India is primarily due to the processes of globalization, which makes knowledge of foreign languages, especially English, mandatory. There is an increase in the economic interdependence of national economies around the world due to an increase in the speed of movement and volumes of goods, services, technologies and capital across state borders.
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Социальные
Real disposable money income
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Population decline
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Quality
One of the main problems is the low quality of educational products. The threshold for entering the online education market is small, so many under-professional people enter this niche, whose only goal is to make money. And it often becomes very difficult for consumers to determine in which school they can get a decent education, and where they will simply waste their money. Negative influence of the factor.
technological
Artificial Intelligence
With the help of artificial intelligence (AI), it is possible to tailor training to individual requests, identify ""hard-to-reach"" fragments in the program, and predict which of the participants is most likely not to complete the training.
There are different use cases for AI in online learning, almost all of them fall under the use cases listed below:
- Language recognition and natural language analysis. Used in language learning, but also in major specialty applications. The disadvantage is that such an algorithm often fails with children or people who speak several languages.
- Personalization of online learning. Adjust course material based on student usage and preferences.
- Virtual (online) training. Help with grading to identify and correct student errors.
- adaptive learning. Proactively identifying and addressing gaps in student knowledge.
Many of these can be combined and used together to form a richer AI learning environment.
Free education opportunity
During the pandemic, many online resources opened up free access to their courses. There are also plenty of free tutorial videos on YouTube.
Convenience of the online format
Online provides the opportunity to learn throughout life, combining learning with work and family. Most of the program can be mastered at a convenient pace according to your own schedule, no need to waste time on the road. Classic full-time programs cannot offer this kind of flexibility.
Political
Licensing
An online school does not need to have an educational license, but it can be obtained. The main goal is marketing, as customers tend to trust schools that have a license more.
We list the ""pluses"" of having a license:
- A licensed online school cannot be held liable for violating Indian law;
- A license in the eyes of students is a sign of verification of an online school that provides quality services. Basically, the document is posted on the site;
- Students, as individuals, can receive a personal income tax deduction;
- A school that has concluded an agreement for the training of its specialists has the right to take into account all expenses when calculating income tax;
- The school issues a state document.
However, there are also ""cons"":
- A complex procedure for obtaining a license (payment of state duty, collection of necessary documentation, sending documents to Rosobrnadzor, making corrections to documents in case of comments);
- Availability of an educational program;
- Multi-stage document flow;
- Unscheduled and scheduled inspections of Rosobrnadzor.
Thus, the factor is multi-vector. On the one hand, a license is not mandatory, on the other hand, obtaining it gives the school a competitive advantage, but the school will face quite significant disadvantages.
The possibility of using maternity capital
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Concluding the assessment of the factors influencing the market of online language schools, we will summarize the key ones in the framework of the STEP analysis.
Table 1. STEP analysis of factors influencing the online language school market
According to the results of the performed STEP-analysis, macro-environment factors have a more positive impact on the development of the online language school market.
Among the most positive factors in the market are: globalization, the restoration of the population's solvency, the convenience of the online format, the ability to work without a license, the introduction of artificial intelligence, the possibility of using maternity capital, the stabilization of exchange rates, and the improvement in GDP values.
1.7. Analysis of sectoral indicators of financial and economic activity
The financial and economic indicators of online language schools are presented according to Rosstat, taking into account OKVED: (85.41.9) ""Other additional education for children and adults, not included in other groups.""
Data for 2021 are GidMarket forecasts based on retrospective data.
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Current liquidity characterizes the extent to which all short-term liabilities of the enterprise are secured by current assets. Shows how many rupees of current assets account for a unit of short-term liabilities. The optimal values are 1,5–2,5 times.
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Table 3. Absolute liquidity in the field of online language schools in comparison with all sectors of the Indian economy, 2017-2021, times
Chart 10. Business activity (average receivables turnover) in online language schools, 2017–2021, days days
The equity ratio characterizes the availability of own working capital of the enterprise, necessary for its financial stability, it is calculated to assess the solvency of the enterprise.
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In general, the analysis of industry financial ratios in the field of online language schools shows low gross margin and profitability before tax, while indicators of industry values of absolute and current liquidity, financial stability indicate the ability of most enterprises to repay current debt at the expense of existing current (current) assets .
Part 2. Competitive Analysis of the Online Language School Market in India
2.1. Major players in the market
The main companies participating in the market of online language schools have been identified by GidMarket analysts based on Smart Ranking data.
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2.2. Market shares of the largest competitors
The assessment of the shares of the largest operators in the market of online language schools was carried out by GidMarket analysts of forecast data on company revenue in 2021.
Diagram 12. Shares of the largest competitors in the market of online language schools in 2021, %
The online language school market in India is characterized by a high level of concentration (Herfindahl-Hirschman HHI > 1800 - highly concentrated market).
2.3. Profiles of major players
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The study of the dynamics of total revenue is indicative from the point of view of the analysis of growth trends.
Part 3. Analysis of the consumption of online language schools
3.1. Estimated per capita consumption of online language schools
Estimated consumption per capita was made by GidMarket based on the ratio of the market size of online language schools to the population of India.
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The online segment is finally recognized by all market participants. Investors, educational organizations and, most importantly, users are looking at online learning as a natural alternative to offline.
3.2. Market Saturation and Estimated Market Potential in India
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In general, the market, although it has great potential, has not yet formed into an independent industry and is at an early stage of development.
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3.3. Description of consumer preferences
Despite the fact that there are several main criteria for choosing an online language school ...
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Diagram 15. Criteria for choosing an online foreign language school, scores
3.4. Price analysis
GidMarket analysts believe that consumer price indices in the online language school market are similar to price indices for foreign language courses monitored by Rosstat.
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The cost of classes in online schools does not depend on the region where the school is located or on the location of the student.
The cost depends on the payment for the number of lessons: the more lessons the client pays for at a time, the cheaper the cost of each lesson is. Also, the cost is affected by the level of language proficiency: the higher the level, the more expensive the lesson.
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Part 4. Assessment of factors of investment attractiveness of the market
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The positive factors of the investment climate in the market of online language schools dominate over the negative ones.
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Part 5 Market Forecast for Online Language Schools until 2026
The following factors make it possible to predict the dynamics of the market volume of online language schools:
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Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators
According to GidMarket, the market size of online language schools in 2020 is ...
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Macro-environment factors have a more positive impact on the development of the online language school market. Among the most positive factors in the market are: globalization, the restoration of the population's solvency, the ability to work without a license, the convenience of the online format, the introduction of artificial intelligence, the possibility of using maternity capital, the stabilization of exchange rates, and the improvement in GDP values.
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For both new and existing operators of the online language school market, the following recommendations can be made:
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Diagrams
Diagram 1. Dynamics of the market volume of online language schools, 2017–2021, billion Rs.
Chart 2. Market structure of online language schools by type, 2021, %
Diagram 3. Market structure of online language schools in India by Union Territories, %, 2021
Diagram 4. Dynamics of India's GDP, 2012-Nov. 2021, % to the previous year
Diagram 5. Monthly dynamics of the US dollar against the rupee, Rs. per US$1, 2016–2021
Diagram 6. Dynamics of real incomes of the population of India, % to the previous year, 2012–Sep. 2021
Diagram 7. Dynamics of the population of India, million people, as of 01 Jan. 2012-2021
Chart 8. Profitability before tax (profit of the reporting period) in the field of online language schools in comparison with all sectors of the Indian economy, 2017-2021, %
Diagram 9. Current liquidity (total coverage) in the field of online language schools for 2017–2021, times
Chart 10. Business activity (average receivables turnover) in online language schools, 2017–2021, days days
Chart 11. Financial sustainability (security of own working capital) in the field of online language schools, in comparison with all sectors of the Indian economy, 2017–2021, %
Diagram 12. Shares of the largest competitors in the market of online language schools in 2021, %
Diagram 13. Dynamics of the total revenue of the largest online language school market operators (TOP-5) in India, 2017–2021, %
Chart 14. Consumption of online language schools per capita, 2017–2021, Rs./person
Diagram 15. Criteria for choosing an online foreign language school, scores
Diagram 16. Forecast of the market size of online language schools in 2021–2026, billion Rs.
Tables
Table 1. STEP analysis of factors influencing the online language school market
Table 2. Gross margin of the online language school industry compared to all sectors of the Indian economy, 2017-2021, %
Table 3. Absolute liquidity in the field of online language schools in comparison with all sectors of the Indian economy, 2017-2021, times
Table 4. Main companies participating in the online language school market in 2021
Table 5. Basic information about the No. 1 participant in the online language school market
Table 6. Basic information about the No. 2 participant in the online language school market
Table 7. Basic information about the No. 3 participant in the online language school market
Table 8. Basic information about the No. 4 participant in the online language school market
Table 9. Basic information about the No. 5 participant in the online language school market
Table 11. Consumer price indices in the market of online language schools in India in 2017-Nov. 2021, %
Table 12. Average prices in the online language school market, Rs./class 45 min., 2021
Table 13. Assessment of factors of investment attractiveness of the online language school market
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