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China wants its online tutoring companies to go non-profit. This drastic move
could not only destroy its $100-billion edtech market but also benefit countries
like India as foreign capital earmarked for China could flow into domestic
edtech startups.
China believes that high private tutoring fees are a huge burden on
young families, thus discouraging them from having children and
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impeding population growth. It recently revised its two-children policy
to three children per family.
"The implicit rules of China are that the government sets goals for the
country and inverts back to key objectives that the country should be
attaining," Lillian Li, a Chinese investor, strategy consultant and
development economist, wrote in her now-viral Twitter thread.
She further elaborated,
"China's biggest woes in the future are its ageing demographic and lack
of children. Advertisements selling status anxieties to get kids into
after schools are rife. Whenever I chat to parents they all tell me they
can't afford kids given the cost of schooling and tutoring. This is also
just in the Tier-I cities. These kinds of resources aren't even available
in Tier-III and lower cities. If continued, this will increase inequality
in educational attainment and therefore, income in China going
forward."
This could, however, benefit Indian edtech startups. Founders and investors
reckon that India is going to be among the beneficiaries of events
unfolding in China, at least in the short run.
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How this impacts Indian edtech
An early-stage investor who oversees edtech investments at a VC fund
tells YourStory,
"In the short term, it will be good for India. Some of that [VC] money
has to go somewhere. India will look a little more attractive now. For
the first time, large edtech companies are beginning to hire public
policy executives. So, they are paying attention to what is happening
in China. In the long run, no one really knows."
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Outlining the differences between China's and India's education landscape,
Gaurav adds, "In order to encourage people to have more kids, China is
trying to come up with policies that show that raising kids is not
costly. India, on the other hand, has a different issue. We have far too many
people graduating but unfortunately, they are unemployable. Edtech
companies are actually helping in making people employable so that
India can fulfil its promise to be the service centre for the world."
Source: https://yourstory.com/2021/07/d2c-brands-eye-offline-path-after-
online-channels-sugar-cosmetics-dot-and-
key/amp?utm_pageloadtype=scroll