Amazon (NASDAQ: AMZN) Exits the Booming Edtech Market in India

Plenty of top tech CEOs graduated from the country's universities, which are seen as a ticket to prosperity.

FREMONT, CA: Amazon (NASDAQ: AMZN) has withdrawn from the Indian market for online learning services. Amazon Academy, a programme offered by the e-commerce giant, was introduced last year and offers assistance for high school examinations and the exams required for entrance to India's top engineering and technology institutes.

One of the edtech players was Amazon Academy. The cutback was one of many made by the company, which also stated that it resulted in the closure of a food delivery service. India places a high importance on education as a means of advancing its economy and society. Thus, Amazon may have done well to drop its offering. Because of this, it can be difficult to get into a decent school.

More than 150,000 applicants attempt the entrance exam at India's prestigious Institutes of Technology (IITs), but only about 10,000 are given admission. It's difficult to even be eligible to take the entrance exams. Because they are globally competitive, admission to one of India's top academic institutions is unquestionably worth the prize.

Arvind Krishna, the CEO of IBM, Sundar Pichai, Raghu Raghuram, and George Kurian, the CEO of NetApp, are just a few of the notable business leaders and academics who have graduated from Indian universities.

Thus, an extensive edtech market has developed in India, with online service providers offering coaching, examinations, and other services to assist students in improving their grades and perhaps even doing well enough to get accepted into a prestigious college.

However, the industry is divisive. Byju's, a dominant player, has quickly established a global brand by supporting Indian sports teams and has grown to be the country's most well-known and valued startup. However, it has also been alleged that Byju and other edtech firms use high-pressure sales techniques that prey on Indian families' conviction that education is a ticket to a brighter future.

Byju also attracted controversy for scaring off both customers and investors by holding down the release of financial information for up to 18 months. The business eventually disclosed losses of more than USD 500 million. Competitors also disclosed less-than-stellar balance sheets, resulting in the embarrassment of their venture capital funders and a decline in confidence in India's startup industry. A source of pride for India, the entire edtech industry has emerged from the experience somewhat tainted and reduced.

A hint that Amazon struggled to compete and/or anticipate growth in a competitive industry may be their decision to exit the edtech sector to reduce expenses. Or it can simply be a sign that the market is saturated. The fact that students will have access to course materials well into 2024 shows that Amazon Academy has at least done the right thing for them.