1. Indonesia’s education sector has multiple challenges that EdTech players aim to address

Low govt. spending on education has led to decline in quality of institutions – both govt. and private. This is further aggravated by declining quality of teaching staff and supplies due to lower salaries and budgets for schools.

Govt. spend on education as % of GDP

There is little incentive for bright minds to enter the education sector as employees – which is creating both a quantity and quality problem among the educators. Existing educators often flock to alternative means of income which further deteriorates quality of teaching.

Political and government control over the education system has led to several challenges in institutions taking the lead to keep up with advances being made across the world – leading to difficulties in maintaining an effective education system.

Several players have come up addressing various different challenges posed by the education system. Most of the players are offering a full stack service encompassing courses, tuitions and private tutoring as well, however lack specialization in any specific segment.

Player Overview – K-12 EdTech, Major Players

Player Overview – Post K-12, Major Players

2. The EdTech market got a boost thanks to COVID to reach >USD 200 Mn in size in 2020

COVID has rapidly boosted the growth of ed-tech; as consumers flock to alternate ways of education during a pandemic-stricken environment. While the adoption rate has significantly gone up, there is still significant upside as majority of consumers continue to be free users.

EdTech Market in Indonesia, $Mn, CY20

3. However the K-12 market is skewed towards higher education (9th to 12th grade) and pre-recorded sessions with massive untapped opportunity in the lower grades + live classes/more differentiated offerings

The need for supplementary education and exam preparation is important; creates high propensity to pay for online courses in the Higher education segment.

Most of the traction within primary and secondary education is driven by the need to prepare for national exams and other extracurricular activities.

4. EdTech market has abundant opportunities for the players

To crack the opportunity within the Edtech space, new-age edtech players need to sharpen their value proposition and base it around the key need gaps in the system.Pushing sales of pre-recorded sessions in smaller cities that lack access to quality content or designing products that enable 2-way interaction can help in deeper penetration within the K-12 segment. On the other hand, internationally accredited courses that focus on employability can help in tapping the post-K-12 opportunity effectively.