Campus BeatNews

Demand for Mid-Market Education Providers on the Rise

The Gulf Cooperation Council (GCC) education sector is witnessing positive transformation that is widely expected to bring it at par with global standards, which will see players in the region compete favourably. In its report, Allied Investment Partners (AIP) notes that the region is continuing to make meaningful strides in reforming its education sector.

This, the report says, is in an effort to offer world-class education to its ballooning expatriate population. By focusing on the growth potential of each GCC member nation, the report also highlights signs of promising growth prospects fueled by the need to build a skilled workforce and create employment opportunities that are in line with their economic diversification strategies.

According to the report, all GCC members have acknowledged the importance and need for establishing a strong education ecosystem. This coupled with a private sector-friendly framework has resulted in the opening up of the education sector, which has encouraged more private players to participate.

Industry Outlook
AIP in its report expects the total number of students in the GCC to grow. It is estimated that there will be 1.3 million students in the UAE alone by 2021, which is a significant increase from the current 585,000.

This has been credited to the rising population and high per capita GDP. The quality and standards of education are also set to improve thanks to government-led efforts and the private sector participation.

The GCC Private Education market is expected to hit US$21 billion in 2021. This is largely because of the continued rise in spending by parents, regional governments’ growing accommodative policies towards private education, and a steady rise in enrolments.

In 2018, Saudi Arabia allocated 21.6 percent of its national budget to education while the UAE set aside 20.2 percent. Oman, Bahrain, Kuwait, and Qatar spent 12.8%, 10.5%, 10.2%, and 9.4% respectively.

The region’s K-12 education market has also become a magnet for investors and school operators representing an attractive market opportunity. Most notably, the UAE’s education sector is witnessing a robust growth with an influx of investors as demand burgeons aided by a rise in employment opportunities.

Key Trends
There has been a shift in preference over the past few years, from super-premium to more affordable options. This has happened as schools at more realistic fee levels have brought international standards into the reach of a wider consumer base.

Consumers have also realized that they can capitalize on market competition to get more for less. In a situation of such high competition and demand, the future lies in mid-market education provider. Al Najah Education is a pioneer of the “premium quality, competitively priced” schools’ concept.

It has for many years delivered an exceptional quality of teaching and learning in line with international standards, at a realistic rate. According to the CEO Raza Khan, the group will continue to expand into new markets in the coming months. “With even more options and undoubtedly high standards prevailing, the future for mid-market education providers like Al Najah Education will prove to be a bright one,” said Raza.

In its report, AIP noticed that at a time when other market players have been forced into unsustainable discounting measures and are growing at a single digit, the region’s mid-market segment is experiencing a record enrolment across the region with players such as Al Najah recording double digits growth.

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