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Note on Case study: ‘BYJU’s the Learning App’

Short Abstract
With about 300,000 annual paid subscribers, BYJU’s App emerged as the most popular smartphone app
in the country. It became the largest K-12 education app in India, with high engagement and user retention
rates owing to its high quality content and interactive tools for a personalized learning experience. With
growth opportunities still available in India, BYJU is planning to enter into US and other English speaking
international markets. A strong digital payment infrastructure, large demand for “better learning”, a
willingness to subscribe being attributes of the market that are attractive to BYJU for entering US. On the
other hand, the public school system and the intense competition from ed –tech companies pose a serious
challenge for them in the US market.

Major players
Byju Raveendran
Raveendran was born and brought up in a small village in southern India. He completed his mechanical
engineering at a government college and in 2001, joined a shipping firm as a service engineer. From very
early on he had an aptitude for problem solving and had developed a perspective of concepts different
from regular classroom learning owning to the freedom his parent, both teachers at a rural government
school, had given. He started Raveendran classes to help students and working professionals prepare for
CAT (common Admission Test) and as his classes grew in popularity he ventured into developing courses
for other competitive exams. In 2013, he decided to venture into the K-12 segment of the Indian education
system through high quality video content and interactive personalized leaning by launching the BYJU
app.

Company history
2003 – 2010: Raveendran during one of his extended vacations, helped four of his friends to clear CAT.
He also gave the exam and scored a perfect 100 percentile in the exam. After a year, he started offering
CAT preparation classes through a freemiun model where the first class was given free and the
subsequent classes were paid . As CAT preparation generally involves group studies, his popularity grew
through word of mouth. Due to huge demand, by 2006, he started renting auditoriums to accommodate
a class size of 1000 students in a 10-15 four hour workshop format conducted initially in Bangalore and
then spreading to Chennai, Mumbai and Pune. With a view to expand, he targeted five new cities. As he
conducted classes for large groups where direct interaction was difficult, he had to design course
delivery in such a way that he could answer all possible questions associated with it. In 2009,
Raveendran started using videos to cater to the large demand. In places where internet connectivity was
poor, Raveendran partnered with a provider for VSAT connections. By 2010, Raveendran classes had
scaled to 45 locations and started offering new courses for other competitive examinations.
2011- 2015: BYJU’s was formed and their focus shifted towards developing content for the attractive K-
12 segment. BYJU’s started tutoring classes for grades 8 to 12. This was used as training grounds for
teachers and also helped them to develop and modify their contents. By 2015 BYJU had developed
content for six grades and launched its digital product “BYJU’s the learning app”.
Market attractiveness
Tutoring and supplementary education market was pegged at USD 11 billion in 2014, just before the
BYJU’s app was launched in India. The online supplemental education market with a projected market
size of USD 2.5 billion in 2016 and an annual CAGR of 15 percent for the subsequent three years further
increased the attractiveness of the market for BYJU. With smartphone penetration in the country
expected to grow to 584 million users in 2020 from the existing 123 million coupled with the fact that
over 70 percent of the K-12 students owning a smartphone, the growth prospects for BYJU was
immense.

Competitive advantages of BYJU’s


High Quality and Interactive Personalized Content.
BYJU placed a lot of importance on creating good quality content. They used a combination of teachers
videos and embedded virtual objects to create an environment of virtual reality. They strategically
identified high quality video and content development as their core competence and build a specialized
team in-house. Script development ncluded a deep subject research on the theory, illustrated with
suitable examples and it holistically covered other aspects like FAQ’s, misconceptions and shades of
humor. The media team developed the videos right from shooting it to adding special effects into it. The
video was then edited layer by layer and music was added to get the final output. Another strategic
decision taken by BYJU was not to create hour long videos, but to develop micro-module topic videos of
3 to 4 minutes each that could have been used as part of multiple courses.

A Robust Distribution Network


Right from the inception, Raveendran was focused on two aspects quality of content and effective
delivery. The use of VSAT (Very Small Aperture Terminals) from the very inception, further cemented the
idea that irrespective of level of internet penetration, the content delivery should not be compromised.
Various innovation in content delivery was made, like Samsung tablets were given to students with
preloaded content so that they did not have to depend on internet connectivity for accessing the
content. Online mode was also available and also through an app based interface to be used through a
smartphone.

Sales and marketing strategy


BYJU followed a much focused sales and marketing strategy. During the initial years they mostly relied
on word of mouth marketing and expanded their customer base. Through the freemium model of
subscription, they attracted and engaged customers through their high quality content. TV commercials
to target rural students and social media marketing to attract urban students was used. Various data like
effective time to show ads, customer download patterns were analyzed and potential leads were
identified, those who downloaded the app and watched at least five videos. The tried to convince such
students’ parents to buy an annual subscription. They tracked app renewals and by convincing
customers of the benefits of their app, achieved a 89 % retention rate much higher than the industry
average of 35%.

Global Ambition
The app had a user base that consisted of 85 percent Indian Users and 15 percent users from middle-
east countries. They identified US as a potential market for their product because of various advantage
like students being more open to independent learning ; internet penetration is higher and a more
matured ed-tech market with greater consumer awareness exist; large percentage of children are
already accustomed with learning through videos and animation, and parents being more willing to
experiment with new things; there is a strong digital payment infrastructure as compared to the Indian
digital payment infrastructure and there is greater tendency in America to subscribe to an app. They also
realized that to enter and succeed in US market they had to adopt both their business model and their
content to suit the need of American users. The public system of schools and huge competition are
major impediments for BYJU’s in entering US. We though feel that by relying on the strength of their
core competencies of creating high quality interactive and personalized content, BYJU can adopt their
product to suit the needs of the American users. Additional suggestions for BYJU’s to enter into US
market are as follows:

Suggestions
 They must make the parents realize that their app can be a successful supplement to public
school education. Their children can get access to private school quality education at a much
lower cost. This can motivate the parents to use BYJU
 They can leverage the public school system in US and adopt a new business model where they
inject their product through public administration as a supplement to school curriculum.
 They can launch lower cost versions of their product for Hispanic and Blacks. These version can
contain material with sessions on the very basic concepts and are affordable for the users from
these communities.