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March 2021

Alpen Capital (ME) Limited announced the publication of its report on the GCC Education Industry for the year 2021. The report provides a comprehensive overview of the GCC education sector and outlines the outlook, recent trends, growth drivers and challenges in the sector. It also profiles some of the prominent education companies in the region.

Industry Outlook

In the GCC, transition to online learning has been relatively smooth for most private institutions and governments are also ensuring that the public establishments adapt equally. The pandemic has compelled educational providers to realign their business models while ramping up investments in digitally aided education platforms to drive future growth and improve operational efficiencies. GCC countries have also stressed the need to upgrade existing infrastructure to better prepare for any potential outbreaks in the future. Utilizing technology, optimizing operations and cost-savings will be crucial in aiding sustainability and growth in the medium to long-term.

Alpen Capital anticipates five investment focus areas for the sector going forward –

EdTech and digital learning: COVID-19 has highlighted the lack of technology integration into the education system. Building a strong technology infrastructure will not only create a robust education system but also open it up for investment opportunities.

Blended learning and personalized models: The education sector is witnessing a momentous shift in structure leading to ‘blended learning’ as a preferred education model. New learning methods based on infusion of experiential and collaborative learning with a mix of online and in-person elements are likely to attract higher investments.

Privatization amid spending constraints: The industry is expected to witness reduced spending from the government amid the pandemic induced economic slowdown. To relieve the budgetary strain and concentrate on regulatory reforms, governments are expected to further open up the sector for foreign ownership and adopt to PPP models. It will also foster overall quality, infrastructure and economic stability in the region.

Emerging hub for tertiary education: GCC governments as well as private players are heavily investing to provide quality tertiary education, to retain talent within the region and make the sector self-sufficient. Moreover, the establishment of branches of renowned universities in the region along with the appeal and safety to enroll closer to home is expected to drive enrolments.

Acquisitions and consolidations to create better synergies: The GCC education sector remains a fragmented market with several size and type of operators catering to a wide population with varied preferences. Demand-supply imbalance, enforced implementation of technology and fee reductions have impacted profitability and revenues of operators. Hence, M&A in the sector will help create better synergies, improve cost margins and increase management efficiency.

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