Tech

Amazon quits India’s frenzied edtech market

Amazon has quit India’s market for online educational services.

The e-commerce giant last year launched a service called Amazon Academy, offering tutoring for high school exams and the tests that allow admission to India’s elite engineering and technology universities.

Amazon Academy was just one of many edtech players. India’s Economic Times, which reported Amazon’s exit, said the cutback was one of many across the company that also saw it shutter a food delivery service.

Amazon may have done well to nix its service, because India values education enormously as means of economic and social advancement. Competition to secure places in good schools is therefore fierce: more than 150,000 candidates attempt the entry test for India’s elite Institutes of Technology (IITs), but only around 10,000 are offered places. Even qualifying to sit the entry exams is not easy.

The prize of a place at one of India’s top tertiary institutions is certainly worth it, because they are globally competitive. The likes of IBM CEO Arvind Krishna, Microsoft head Satay Nadella, Alphabet boss Sundar Pichai, VMWare CEO Raghu Raghuram and NetApp CEO George Kurian all graduated from IITs, and plenty of other tech execs also attended Indian unis.

India has therefore grown an enormous “edtech” market – online service providers that offer coaching, tests, and other services to help students improve their grades and maybe even do well enough to snag a place in an important institution.

But the sector is controversial. Leading player Byju’s has quickly built a global brand by sponsoring Indian sporting teams and has become the nation’s most prominent and valuable startup. But Byju’s and other edtech companies have also been accused of using high-pressure sales tactics that target Indian families’ belief that education is a ticket to a better future.

Byju’s also became controversial after delaying the release of financial information for up to 18 months – spooking investors and customers alike. The company eventually revealed losses topping half a billion dollars. Rival companies also revealed less-than-brilliant balance sheets, leaving their venture capital funders with egg on their faces and reducing confidence in India’s startup scene.

The entire edtech sector – a source of pride for India – has emerged from the experience rather tarnished and diminished.

Amazon walking away from edtech to cut costs could be a sign it struggled to compete and/or project growth in a crowded market. Or it could just indicate the market is saturated.

Amazon Academy has at least done the right thing by students, who will be able to access course materials well into 2024. ®


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