Amazon has left the Indian market for online education services.
The e-commerce giant last year launched a service called Amazon Academy, which offers tutoring for high school tests and exams that grant admission to India’s elite engineering and technology universities.
Amazon Academy was one of many edtech players. of India Economic Timeswhich announced Amazon’s exit, said the cutback was one of many across the company as it shut down a food delivery service.
Amazon may do well to drop its service, as India highly values education as a means of economic and social progress. So the competition to secure places at good schools is fierce: more than 150,000 candidates attempt the entrance exams for India’s elite Institutes of Technology (IITs), but only around 10,000 are offered places. Even qualifying the entrance exam is not easy.
The prize of a place in one of India’s top tertiary institutions is definitely worth it, as they are globally competitive. The likes of IBM CEO Arvind Krishna, Alphabet boss Sundar Pichai, VMware CEO Raghu Raghuram and NetApp CEO George Kurian have all graduated from IITs, and many other prominent executives and academics have also attended Indian universities.
India has therefore developed a huge “edtech” market – online service providers that offer coaching, testing and other services to help students improve their grades and possibly do well enough to get a place at a top institution.
But the sector is controversial. Leading player Byju’s quickly built a global brand by sponsoring Indian sports teams and became one of the most prominent and valuable startups in the country. But Baiju and other edtech companies have also been accused of using high-pressure sales tactics that target Indian families’ belief that education is the ticket to a better future.
Byjus also became controversial after delaying the release of financial data for up to 18 months – scaring away investors and customers alike. The company eventually posted a loss of half a billion dollars. Rival companies have also released less-than-glowing balance sheets, putting egg on their venture capital funders’ faces and denting confidence in India’s startup scene.
The entire edtech sector – a source of pride for India – is rather tarnished and diminished from the experience.
Amazon moving away from edtech to cut costs could be a sign that it has struggled to compete in a crowded market and/or scale projects. Or it could indicate the market is saturated.
Amazon Academy has at least done right by students, who will be able to access course materials well into 2024.