New Delhi: The online education sector in India, which now covers a plethora of start-ups offering audio-visual courses to test preparation material, is estimated to grow at a compound annual growth rate of 52% to $1.96 billion by 2021, according a joint study by Google and KPMG released on Tuesday. The current size of the industry is $247 million.
According to the report, the growth will be backed by a healthy rise in paid users—currently 1.6 million and estimated to grow to 9.5 million in 2021.
“There are several evolving trends in the Indian online education segment that are contributing to the growth opportunities ahead," said Sreedhar Prasad, a partner at KPMG India. “These include emergence of hybrid learning channels, continuous need for working professionals to learn new skills as well as emergence of technologies such as big data and artificial intelligence that is enabling online education vendors to design customized content."
ALSO READ: How Byju’s built its brand
Bengaluru-based Byju’s, a learning application and the country’s top-funded education-tech start-up, has grown to 400,000 paid subscribers since its launch in 2013. Other start-ups in the space include CultureAlley, CueMath, Unacademy and TopRanker.
Currently, these firms are categorized under supplemental education, test preparation, online certification, higher education and casual learning.
Re-skilling and online certification courses are currently the dominant category with a 38% share. With the rise in tuition fees (which grew 175% between 2008 and 2014), more students, especially from tier-II cities, are expected to take up online graduation courses, the report said.
Besides this, the sector is expected to gain from innovation in content, an increased number of job seekers (employment rate in India was at a five-year high in 2016) looking to add new skills, and the government’s education-focused initiatives like Skill India, SWAYAM, E-Basta and Rashtriya Madhyamik Shiksha Abhiyan.
Online test preparation, represented by OnlineTyari and Toppr, among others, is expected to grow the fastest--at about 65% CAGR—over the next five years, the report said.
“It is also interesting to note, that high growth in education search queries is now coming in from tier-2 and 3 cities such as Patna, Guwahati, Aligarh and Kota— which points to the opportunities that growing penetration of smartphones and improving quality of Internet have opened up," said Nitin Bawankule, industry director at Google India.
The report revealed that over one year 44% of education searches came from cities beyond the top six metros, while consumption of education content on YouTube went up by 400%.