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Business trends

Edtech taking off in Southeast Asia

Digital services can fill gaps left by lack of teachers, schools, materials

Kindergartners in Thailand use Taamkru materials. (Photo by Sadachika Watanabe)

TOKYO -- Southeast Asia is proving to be fertile ground for internet-enabled education startups. Many countries in the region have creaking school systems that are now being asked to find room for swelling numbers of youths.

"Edtech" is stepping up. In Indonesia, startup Ruangguru is collaborating with municipalities. The provincial government of South Sumatra is using Ruangguru's online learning materials, which are designed to prepare students for high school entrance exams.

Line Academy's home page

The edtech venture has partnered with 100 or so municipalities. It specializes in video streams of classroom lectures. Ruangguru also provides a service that prepares quizzes, grades results and tracks student progress.

In January, the service provider joined hands with Line, a Tokyo-based chat-app provider, to launch Line Academy. Line has been downloaded 90 million times in Indonesia, giving Ruangguru a large potential user base.

Asia appears ripe for online education services. Not only does it have a love affair with the smartphone, but high-speed service is inexpensive.

IBIS Capital, a London-based consultancy, estimates that the global edtech market will grow to $252 billion in 2020, roughly triple its 2013 size.

Over the same period, the Asia-Pacific region is expected to go from 46% of the global market to 54%.

Local startups have an advantage -- they fully understand the needs of students and education realities in their countries. By collaborating with one another, they could expand across borders.

Wherever you are

Vietnamese startup, for example, has teamed with Taamkru of Thailand to suss out demand for education in Vietnam. Both companies are backed by Japanese venture capital.

Edtech services have been slow to get into primary and secondary education markets around the world, mainly because societies do not see education in commercial terms.

According to the IBIS study, primary and secondary education accounted for 12% of total global edtech services in 2013. This is seen increasing to 24% by 2020. Over the same period, opportunities for higher education will likely increase to 46% from 41%. Some businesses already smell opportunities here.

Edukasyon, a Philippine information provider mainly for students expecting to take college entrance exams, plans to expand its tie-ups to 500 schools by the end of this year. It currently has 150 partner schools. The startup also wants to create a website of colleges that shows how much tuition is and what subjects they excel in. The site is to be modeled on hotel-booking websites, an Edukasyon executive said.

The Philippines is overhauling its primary and secondary education system. The old 10-year curriculum has been replaced by a 12-year curriculum.

Edukasyon's service is expected to benefit individual colleges who seek to attract more students in the future.

Back in Indonesia, HarukaEdu this year plans to add management, communications and other subjects to its college lecture video streaming service. Pearson, a leading U.K. education publisher, has partnered with the Indonesian startup.

In the first 10 years of their careers, college graduates in the country often earn three times more than what high school certificate holders make. And the unemployment rate for those with four-year degrees is less than half that for high school grads.

HarukaEdu believes there will be demand in the country for edtech services that allow students in remote areas to receive college educations.

Much of Southeast Asia lacks teachers and learning materials. In addition, schools are often incapable of swiftly catching up to curriculum and other changes demanded by governments. Edtech services could make up for some of these shortcomings.

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