Online education market in India: Growth drivers, challenges, and key trends

Online education market in India

The promise of quality education and the rise of internet penetration have catalyzed the expansion of the online education market in India. This market has expanded with a staggering CAGR of roughly 49.5% during the period spanning 2017-2023. According to Netscribes, the online education market in India will be worth INR 195.4 billion (USD 2.7 billion) by 2023. Here are some of the growth drivers, challenges, and key trends impacting the market growth.

Growth drivers

Low-cost initiative

Online skill enhancement courses are more affordable than offline alternatives for many families, especially since most of them are freely available. Many prestigious universities and institutes such as Harvard University, Berkeley University of California, and Boston University facilitate online courses on numerous subjects. These courses are usually available on Massive Online Open Courses (MOOCS) which can be bought for free or with a minor fee.

Offers quality education

The enrollments for open courses and distance learning in India are expected to increase to around 10 million by 2021 according to Netscribes. Areas that lack adequate options to pursue traditional education, witness higher adoption of online courses. States such as Bihar, Kerala, and Jammu and Kashmir account for 0.4mn distance learning enrolments.

Government initiatives

Government initiatives such as SWAYAM, E-Basta, Rashtriya Madhyamik Shiksha Abhiyan (RMSA), Skill India and Digital India will make way for the infrastructure needed by students to study online. The government is also working on a National Open University for the dissemination of education to the masses. Apart from this, it is actively promoting digitization of education and ease of internet access.

Increasing internet penetration

Currently, 409 million Indians have access to the internet but its steady growth, especially in semi-urban and rural areas, provides high potential for the proliferation of online education. Netscribes estimates nearly 735 million internet users in India by 2021. This internet penetration will enable reach and increase traffic for online education players.

Increase in disposable income and a large fraction of the young population

Growing disposable income is egging the young population to enhance their skills for higher career and salary growth. Employment opportunities globally are tightening their qualifications, resulting in intense competition. This makes the young population with high aspirations but lower income, a good target market for online education. Further, the acceptability of online channels is also higher in the younger demographic.


Abundance of free content and multiple influencers in decision making

YouTube tutorials and other easily accessible content make it harder for online paid courses to penetrate to market. Free or affordable educational content gets more traction from eager students. Furthermore, buying decisions are influenced by course descriptions, parents, and peers.

There are many institutes and channels that allow users to grasp the elemental understanding of the course. However, they are compelled to pay in order to continue into more advanced learning stages. Some users aren’t comfortable investing their money given the lack of trust in online channels, prompting them to sign up for offline courses instead.

Lack of awareness, slow Internet connectivity, and value of the offerings

Lack of awareness of online offers and monolingual tutorials or language barrier proves to inhibit the rapid growth of the industry. The value offered for many courses can seem quite expensive to many users due to low per capita income of the Indian masses. Also, many areas in the country, still fall under internet-deficient regions or areas equipped with only 3G connectivity. This hinders the growth of the online education market in India.

Familiarity with offline education

Largely, online education is considered as a supplement to education from offline channels. A primary predilection for offline education systems poses a major barrier to the growth and demand of this market.

The emergence of a hybrid model

Many industry players are attempting to create a hybrid of offline brick-and-mortar spaces with online courses in India. This is expected to gain a lot of traction in the future as many still see the classroom environment superseding online education.

Offline players can leverage these virtual classrooms to expand their network across geographies.

Adoption of gamification                

Many Indian corporations are using gamification tools with their employees as an engagement tool. MindTickle, a gaming start-up in India, helped the Indian online travel company, MakeMyTrip design an engaging training program where a new employee was given a pair of headsets and asked to play the game. This was aimed to get him or her well-acquainted with the company culture and values more effectively.

Popularity surrounding micro-learning

Due to time-constrains, many learners may opt to study a certain section within a full-fledged course. Micro-learning is designed and delivered in rich media formats and provides just-in-time training, accessible through multiple devices. This allows the learner to control what they want to learn. For instance, Bloomingdales trained its employees through the Axonify Micro-learning Platform which contributed USD 3 million to the company’s annual savings.

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