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Edtech market entry hinges on local knowledge

Surviving in a market rife with ‘copycat’ operators, navigating local regulatory grey areas and building awareness of online learning products – these are some of the challenges faced by edtech providers entering new markets.

EdTechXEurope edtech emerging markets panelEdtech experts shared their insights on entering emerging markets at the EdTechXEurope event. Photo: The PIE News.

“A lot of the time there is regulation, but the government’s not enforcing it"

Experts from diverse edtech markets gave their insight into how best to tackle some of these challenges at the EdTechXEurope conference in London this week.

At the most basic level, successful market entry begins with building awareness of how edtech can be used, according to Jose Escamilla de los Santos, educational innovation director at Tecnológico De Monterrey in Mexico.

 “The building of trust is a very important element of your journey”

In order to engage students in distance learning, for example, “there has to be awareness– and awareness is built, like confidence, little by little,” he told attendees.

“We have found out that Colombia is the country with the biggest distance learning awareness, so every market is completely different, and we have to work on the market and construct that awareness and confidence,” he counselled.

In many markets, this awareness can only be built with the help of local partners, counselled Ramasamy Sinnakaruppan, CEO of Singapore Education Academy.

In many of the Asian markets that Western companies are keen to break into, local vendors and customers are becoming more sceptical of incoming providers, he noted.

They want to know that newcomers understand local needs and understand the cultural sensitivities around operating a business in the market, he said, adding: “The building of trust is a very important element of your journey.”

Local language skills are a must and companies must work to convince locals that they are not a “fly-by-night” company but are embedded in the market with an on-the-ground presence, he said.

Working with local distributors therefore gives outsiders a marked advantage in emerging markets, he said, while those that don’t will face pressure for their product to work “almost 100% of the time”.

In China, this localisation of products includes being “comfortable operating in a grey area”, counselled Sara Jane Ho, principal of Institute Sarita, a boutique finishing school in China modelled on those in Switzerland.

Having strong relations with government is integral to the success of new businesses, she said. The majority of firms have head offices in Beijing to enable them to facilitate this.

“A lot of the time there is regulation, but the government’s not enforcing it,” she explained. Companies that haven’t liaised sufficiently with government or haven’t paid enough attention to those regulations can find themselves in trouble when they grow large enough for government to notice them, she warned.

Another major hurdle to overcome in China is the prevalence of ‘copycat’ companies, said Ho.

“Within three months [of launching a product in China] it will be copied, and if it’s good, it will be copied even faster,” she warned, meaning that companies must be willing to diversify their offering and develop a pipeline.

But there are significant advantages to operating in China, she added.

Because the Chinese market is so brand-oriented, “once you do have consumers’ trust, you can sell them anything,” she said. This makes it easier for established brands to expand beyond their core product.

And this brand orientation means that companies can offer premium pricing: “From a positioning and a messaging standpoint, it’s a much stronger message and becomes a much more desirable good for conspicuous consumption.”

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