When discussing the education startup industry (edtech) in Indonesia, we cannot leave the origins of why edtech in Southeast Asia is growing rapidly. At the same time, resource inequality, geographical layout, and inadequate curriculum contribute to the quality of education and certainly, there are a lot of things that need to be done to improve the quality.
According to the Program for International Student Assessment (PISA), Indonesia ranks 62th out of 72 countries completed in the fields of mathematics, science, and reading. This study proves the assumption that the country must indeed improve its education system.
A brief description of Indonesian education system
In Indonesia, schools are divided into 3 levels: primary (year 1 to 6), junior high or secondary (year 7 to 9), and senior high (year 10 to 12). Only if you complete the 12 year journey of school and pass the national exams for each level (even though the system can be different each Indonesia has a new minister), you will be qualified to take an exam for higher education (poly or university). Indonesian school system is mainly focused on getting good grades -you need to be the ace of all trades, at least that what I’ve experienced so far-, and most students need to go to a cram school.
Cram schools in Indonesia are called bimbingan belajar (learning assistance), often shortened into bimbel, and accepts students mostly preparing for National Examinations before passing elementary school, junior high school, high school and college entrance exams.
These cram schools teach students with exam simulations and problem-solving tutorials. Bimbels in Indonesia offer lessons after school hours, weekends or public holidays. I myself took a class in a cram school from year 2 in primary school until year 12, maybe around 3 hours per day. To look back at it now, I feel like I spent my childhood studying for exams.
There are several popular cram school institutions such as Primagama, SSC, and Ganesha Operations which have huge networks across the country. These three are everywhere, even in a small city where I used to live, they exist and have many students enrolled in their program, be it tailored for acing the daily tests or for national college entrance exams.
However, the trends shifted a few years ago when online cram schools appeared to the Indonesian education landscape. It’s all thanks to the more established – even though many parts of the country haven’t tasted it yet- internet coverage. We can name at least two popular main players in online cram schools: Zenius and Ruangguru. Let’s take a look at both of them.
Zenius Education, (Zenius for short) established in 2007 as a web based learning center. Previously, Zenius sold learning materials through DVD via offline outlets in several cities in Indonesia. And it established an online learning portal around 2010. The model was based on subscription and the students can watch, download materials and exercise from the website.
Only until last year, they launched their mobile application enabling their students to access their learning content anywhere and anytime. They claimed that the app, Zenius App, is also equipped with Smart Delivery Network, so it can be accessed through 4G, 3G, even EDGE network without buffering.
Other than that, Zenius also has an offline tutoring class, enabling students to get learning assistance from a tutor directly, which also requires students to pay more if they want to enroll and use the class.
The interesting part is how they engage their potential students. They use social media influencers – mainly who focus on generating educational contents such as Jerome Polin. I can tell that Jerome Polin’s followers and subscribers match Zenius’ user profile.
They also use their previous students’ success story to bring more users to the platform. And after gathering around 11 million users on their platform, Zenius finally decided to open the access to video materials and exams exercises in their website and mobile apps for free -users still can pay for premium materials though. Indeed, it’s such a milestone, which most likely sparks “fire” in their competitor – Ruangguru.
Ruangguru was founded in April 2014 by Adamas Belva Syah Devara and Muhammad Iman Usman to aid students to find various tutors online. Belva and Iman were both top graduates from top universities in the US: Belva has a double degree from Harvard and Stanford, Iman got a degree from Columbia. As of August of the same year it’s founded, there were more than one thousand teachers registered, and now it has more than 15 million students users on board.
Ruangguru has a subscription model ranging from monthly to annual subscription. For the basic subscription, users can access video materials, exercise, as well as test tryouts. And if you want more features, It also provides homework solving services – a tutor will help you in a 30 minute session. Of course, you need to buy a token for that additional feature. Other than that, an access to live streaming class is also available for purchase.
Ruangguru enggages their student users with various kinds of influencers from a young adult actor who is loved by many Indonesian youngsters as well as their mom(s), Iqbaal Ramadhan, to a gaming youtuber, Jess No Limit. It looks like their marketing strategy to go with familiar faces in the country paid off as it was reported the number of users beat TikTok when the online school started in Indonesia due to Covid-19.
However, some controversies circulated around Ruangguru when it was reported to seal a project with the government for pre-employment cards. That time, Belva was also occupying a seat on Jokowi’s special staff. Public highly criticized his company after speculation of his company bags around 48 Million USD from the government circulated around media, when he had a “privileged” position.
This resulted in negative sentiment towards Ruangguru in social media and Belva decided to resign as Jokowi’s Special Staff as he did not want to cause further controversy due to a variety of public assumptions and perceptions about his status.
Not stopping here, the 12 long hours broadcasting in 9 national TV channels for its anniversary also stirred up online controversy. The public, in this case is Indonesian netizens, were “angry” as they thought that the event was insensitive towards those students, teachers, and schools that didn’t have internet access to do the online learning due to the pandemic. Why don’t they use the money for helping the unfortunate students instead of spending it for paying the influencers and the singers? – that’s what the public thought.
However, the edtech challenge is not only in a marketing battle for user acquisitions. Despite showing a surge of new users during the pandemic, the edtech sector in Indonesia faces major challenges that prevent this sector to achieve a similar level of success in other tech sectors or other countries. The challenges can be named below.
- Difficult access to funding. Most investors are angel investors as VCs may think that investing in Indonesian edtech is a “charity”. The sector is perceived as low-yielding social enterprise.
- A low willingness to pay on the side of customers, schools and parents in particular
- A lack of digital literacy particularly on the side of education providers
- A poor digital infrastructure particularly outside the island of Java, which limits connectivity in remote regions and download speeds across the country.
Other than that, the public education system’s limited capacity and limited incentives to value the potential of EdTech products, further complicate these constraints. In addition, Indonesia’s underdeveloped consumer protection regulations, particularly on data security and privacy, put student and school data at risk.
The EdTech sector in Indonesia has great market potential, proven by the growing numbers of both Zenius and Ruangguru’s users—assuming that the current challenges can be addressed—as it still lags far behind other emerging countries, such as China and India.
With Nadiem’s appointment as Minister of Education, edtech players in Indonesia might have a hope in friendly policies that enforce innovation and technology usage in school, which are urgent for future human resources.