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U-Dictionary maker means business as U Class eases into India

U Class works on a freemium model and the prices of paid courses range from Re 1 to Rs 599. The education arm of NetEase benefited most from a recent corporate restructuring.

Mar 12, 2019 by Avanish Tiwary
U-Dictionary maker means business as U Class eases into India

Image: Sujith Sukumar

Guangzhou-headquartered Internet and gaming company NetEase has launched online education app, U Class, for students preparing for bank exams, civil services, engineering and medical entrances etc in India. NetEase also runs multilingual translation app U-Dictionary.

U Class works on a freemium model and the prices of paid courses range from Re 1 to Rs 599. The app offers courses such as “How to Prepare Current Affairs For UPSC CSE”, “Become a Spoken English Expert with A BBC Host”, among many others.

The education arm of NetEase benefited most from a recent corporate restructuring. U Class’ parent company, Youdao, reportedly got merged with NetEase Education Products, which earlier belonged to NetEase Hangzhou Research Institute.

The Nasdaq listed company is currently valued at USD 32 billion and is one of the biggest online gaming company in China after Tencent. It has strong revenue models for its gaming products. After gaming NetEase's mail box is one of the popular poducts in China.

Ed-tech in India

Online education in India scaled new heights after mobile data became dirt cheap in the wake of Jio revolution. NetEase is targeting tier 3 and tier 4 cities in India where people regard English language as a stepping stone for high-paying careers.

According to the market research firm KPMG, India’s e-learning market was worth USD 247 million with 1.6 million users (expected to grow six times to 9.6 million by 2021) in 2016. NetEase clearly has its sights set on the size and potential of India’s education space.

The rise of U-Dictionary (Youdao in China) from a dictionary app to a multi-language translation app (from text, audio and image) was phenomenal. Its primary revenue stream comes from the banner advertisements on the app. U-Dictionary is also one of the first products from the house of NetEase to go global. Other products from its kitty are NetEase Music, NetEase News, NetEase Online Open Course, etc.

NetEase Online Open Course is available online and as an app. It provides video tutorials (mostly free) from international as well as Chinese universities on subjects such as physics, mathematics, religion, etc. The platform hit it big in China after it started broadcasting Ted Talks that wasn’t otherwise easily available in the country.

In an earlier interaction with The Passage, U-Dictionary’s Asia Pacific marketing manager Tushar Singla said, “Netease wants to focus on the education sector in India. We already have a good product in Youdao - a translation app for Chinese users. We thought it would be a good idea to launch something similar in other markets as well. India, being the second biggest market after China with considerable internet users, we knew it would be a good opportunity for us.”

The company turned down The Passage’s request for comment for this story.

“At the moment we don’t have much English learning content inside the app. But at the higher management level, discussions are underway that we might start something like this since we already have a good number of users. Currently, we are monetising through advertisements. There is a possibility to monetise the content,” Singla said.

Monetisation is one of the biggest challenges online education companies face in India. Most of the Indian ed-tech companies are on the customer acquisition mode and offer courses for free. Tencent-backed Byju’s recently raised USD 400 million and is valued at around USD 4 billion, the only edtech company in the unicorn club.

Avanish Tiwary

Avanish Tiwary is a Bangalore-based tech journalist. He focuses on emerging Indian startups and unicorns. He can be reached at avanish.tiwary@thepassage.cc.

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