India has a vast market for online learning, but it is barely regulated.
Tutoring giant Byju’s, the world’s most valuable edtech start-up, has been trying to refund Digambar Singh for months now.
A math and science programme for his son cost him 50,000 rupees (£48; $66) up-front and an additional 35,000 rupees in loans facilitated by Byju’s. Mr Singh paid the first 5,000 rupees (£48; $66) up-front.
Mr Singh revealed that a sales representative visited his home and asked his son all sorts of difficult questions that he could not answer. After the visit, Mr Singh said, he and his son became unmotivated.
The Inventiva reported that he felt shamed into purchasing the course. After the initial months, however, Byju stopped answering his calls and never provided the services he was promised – including face-to-face coaching and a counsellor who would call him to keep him updated on his son’s progress.
At the follow-up, Mr Singh was contacted several times by Byju’s, which described his allegations as “baseless and motivated”. Students who opt for learning material with an accompanying tablet can return it “no questions asked” for a 15-day refund, and for services, they can return it “anytime.”
According to the company, Mr Singh requested a refund two months after the product was delivered. However, Mr Singh could get a refund after Inventiva brought his case to their attention.
Several parents told them they were promised one-on-one tutoring and a mentor assigned to assess their child’s progress, but those services never materialized. As a result of disputes about refunds and service deficiencies, Byju’s has been ordered to pay damages in at least three different cases by India’s consumer courts.
According to Byju’s, their grievance resolution rate was 98%, and they had settled the legal cases.
In contrast, interviews with former Byju employees and customers have uncovered more than a few allegations.
A disgruntled parent claims that sales agents misled them. After being sold contracts by agents who convinced them of an urgent need, they went incommunicado a few months later, making it difficult to get a refund. According to a former employee of Byju’s, agents are “least bothered” to follow up after a sale.
According to former employees, there were complaints of “pushy managers” and a high-pressure sales culture that emphasized aggressive targets. In addition, there are hundreds of protests against the company in online forums for consumers and employees.
Founded by Byju Raveendran, the company is engaged in edtech
In response, Byju’s denied using aggressive sales tactics, stating that student and parent purchases would only happen if they recognized the product’s benefit and developed trust for it. According to them, their “employee culture does not tolerate misbehaviour or bad behaviour towards parents” as well as “regimes designed to prevent misuse and abuse are in place.”
As the brainchild of Byju Raveendran, Byju’s was founded in 2011 and is funded by Mark Zuckerberg’s Chan Zuckerberg Initiative and Tiger Global and General Atlantic.
Millions of Indian students were forced to take classes online, as schools were closed for over a year and a half. Consequently, anxious parents like Mr Singh – who traditionally view education as a necessary tool for advancement – are an important market for Byju’s to tap into.
Since the pandemic began, the firm’s growth has been nothing short of meteoric. The company added more than six million paying users and had an 85% renewal rate.
Students and parents who spoke with us commended the quality of Byju’s learning content – in a country where rote learning is shared, Byju’s has been praised for utilizing technology to create immersive, engaging courses. A company’s net promoter score (NPS), which measures customer experience and predicts growth, is also said to be the highest in the industry.
With over $1 billion raised since March 2020, Byju’s has acquired a dozen competitors to assemble a holding company that offers services ranging from coding classes to competitive exam coaching. Shah Rukh Khan is the brand ambassador, making it the most visible brand on Indian television.
After a more than a year-long closure, schools have begun reopening
The company’s rapid growth has caused concern among some education experts. They believe brutal sales tactics have heightened parents’ insecurities, adding to the debt burden. Parent complaints claim their child will be left behind if they don’t buy a Byju’s product because of constant calls and sales pitches.
An employee said the company often pushed its product regardless of the child’s need or the family’s ability to afford it, given that even Byju’s introductory courses start at $50, unaffordable for many Indians.
Nitish Roy, a former business development associate at Byju’s, told us that it doesn’t matter if a parent is a farmer or a rickshaw puller because the same product is sold for different prices. If a parent cannot afford Byju’s, it is priced as low as possible within that range.
According to Byju, they offer “different products at different price points depending on a customer’s needs and affordability” and do not adjust prices “as suggested”. In addition, sales representatives do not have any say in pricing.
We also received reports of current and former employees being pushed to reach unrealistic targets. Two recorded telephone conversations were surfacing online late last year and in January of this year that appears to show furious managers humiliating salespeople for failing to meet their targets.
Byju’s told us the conversations took place 18 months ago, and it terminated the contracts of those managers to rectify the situation.
As explained by Byju’s in a statement to Inventiva, the company has no tolerance for abusive or offensive behaviour. As a result, he remains a part of the firm and enjoys the trust of management.
For poor children, online classes are still unaffordable
Several employees told us that the high pressure to make a sale was so great that it affected their mental health. During the year he worked at Byju’s, a sales executive developed anxiety, and his blood pressure and sugar level spiked.
Several employees reported that they worked 12-15 hours a day and that those who were unable to complete 120 minutes of “talk-time” with potential customers were marked absent, and their pay was docked.
A former employee said he experienced that at least twice a week. He would have to make 200 calls a day to hit the target.
The target was challenging because of the limited number of leads to chase and the short duration of average calls.
Nevertheless, Byju’s stated that it is incorrect to suggest that if people are unable to hit targets in the first place, salaries are docked, or they are marked absent.
It is said that all organizations have fair and rigorous sales targets. Byju’s is no different. Considering the health and comfort of employees, they offered a robust training programme.
As a group company with thousands of employees, we evaluate and act against mistreatment immediately in the event of a single incident.”
The teacher says he left Byju’s after a two-month stint because the company’s way deeply troubled him. He now teaches orphans in a school in Mumbai.
In addition, he noted that the idea began as a noble concept but now has become a revenue-generating machine.
Indians regard education as a ticket to upward mobility
In the opinion of Pradip Saha, co-founder of Morning Context, an online media and research company that covers Indian startups extensively, a lot of this boils down to the pursuit of rapid growth. The problem wasn’t unique to Byju’s but to the entire edtech sector as a whole.
Even though the criticism is mounting, he doesn’t see a dramatic change anytime soon.
There are a lot of complaints, and only a tiny amount of them are addressed. When these complaints are compared with the revenue these startups are generating, it becomes obvious.”
However, regulation is increasingly noisy.
Byju’s business model is being criticized by Dr Aniruddha Malpani, a doctor, angel investor, and vocal critic of the startup. He said it was time for India to follow Beijing’s lead in cracking down on edtech startups. Chinese authorities recently required online tutoring firms to become non-profit.
According to Dr Malpani, the solution is already available. To regulate the sector, the Government of India should emulate Netflix’s model, in which there is no minimum contract length for subscriptions.
This would immediately align interests, as you will continue to make money by pleasing your students constantly.”
Despite parental grievances rising, the Indian government has not yet taken action. The government needs to regulate the sector, according to Dr Malpani, who plans on taking court action.
Dr Malpani called these headline numbers meaningless vanity metrics, raising millions of the world’s top ed-tech startups.
“Education, like health care, is a public good that we can’t afford to forget at some point.”
edited and proofread by nikita sharma
