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Wake up Call for Ed-Tech Firms

Wake up Call for Ed-Tech Firms

Intro: Putting in place stronger systems and processes, including in the way they hire and train sales and support staff, is the need of the hour at ed-tech organisations as the failure to do so could potentially result in more key stakeholders getting jittery about the business practices being followed in this sector and calling for greater regulatory oversight of the segment.

Sumali Moitra

The unprecedented advisory issued by the Union Education Ministry on December 23[1] urging citizens to be cautious while dealing with ed-tech firms should serve as a wake-up call for companies in the education technology arena to gear up their act as having to contend with a possible trust deficit could come in the way of their own future growth.

In early 2021, transaction advisory RBSA Advisors had forecast that the size of India’s ed-tech segment may rise to $30 billion over the next 10 years [2].

Putting in place stronger systems and processes, including in the way they hire and train sales and support staff, is the need of the hour at ed-tech organisations as the failure to do so could potentially result in more key stakeholders getting jittery about the business practices being followed in this sector and calling for greater regulatory oversight of the segment.

Congress MP Mr Karti Chidambaram – who had raised the issue about ed-tech companies in the just concluded session of Parliament – has already written to the Union Education Minister demanding that ed-tech firms be regulated [3].

While much has often been talked of the size of the Indian market, sight must not be lost of the fact that the ease of entry, particularly in not having to contend with too many regulatory approvals, has always played a key role in the growth of ed-tech companies in India. This sectoral advantage coming under strain due to the likely omissions and commissions of some ed-tech firms would, thus, not be in the best interests of either the ed-tech players themselves or the huge funds that have invested in these entities.

Ed-tech companies, moreover, may do well to remember that no amount of glitzy ads and use of celebrity brand ambassadors can undo the likely damage to a brand's reputation if the questions continue to mount about the way a firm is going about its operations. Ed-tech organisations need to be mindful of the reality that, however effective they may be in raising funds from sundry investors, their long-term sustainability would depend on achieving customer satisfaction by emerging as standard-bearers of quality service delivery. Customers, be they students or their parents, gaining the misplaced notion that they are being given the short shrift by certain ed-tech companies may spell bad news not just for these organizations but the entire sector.

Given the vital role that quality education can play in realising the Aatmanirbhar Bharat (self-reliant India) mission, it would hence be good if the new year could see key stakeholders such as the Advertising Standards Council of India (ASCI) pitch in strongly to ensure that the actions of some ed-tech firms are not compromising the interests of countless million students who 

have reposed their faith in the sector. The ASCI playing a proactive role in ensuring that ed-tech companies are not making misleading claims through their ads can go a long way in this regard.  The ASCI should speed up its processes, if need be, so that any of its proposed actions against likely errant ed-tech companies can be taken when these can make a concrete, material difference to the firms concerned.

 

The departments of consumer affairs at both the Centre and state levels acting expeditiously on all consumer-related complaints against ed-tech companies could, in addition, also send out a strong signal to the education technology ecosystem that there could be a price to pay for potential transgressions. Consumer affairs authorities may consider the possibility of frequent awareness campaigns to make citizens more cognizant of how they can obtain redressal of their grievances against ed-tech companies.

 

In the final analysis, easy availability of funding courtesy the increased risk-taking appetite of investors combined with the rising willingness of more Indian families across the economic ladder to do all they can for providing their children the best possible education have created the perfect platform for a plethora of ed-tech start-ups to build global companies out of India. It would truly be unfortunate if in their haste to obtain higher valuations, some of the country’s ed-tech start-ups started taking customers for granted.

Reference(s)

  1. https://pib.gov.in/PressReleasePage.aspx?PRID=1784582
  2. https://economictimes.indiatimes.com/tech/technology/indian-edtech-industrys-market-size-to-reach-30-billion-in-10-years-report/articleshow/82295097.cms
  3. https://twitter.com/KartiPC/status/1470682656681521154?t=sGs00Tp1tpb-qSQBfkdkJQ&s=19

About the Author

Sumali Moitra is a current affairs commentator. Twitter: @sumalimoitra