Middle Class Education in Emerging Markets and its Impact on International Schools
The middle class is growing rapidly in emerging markets, and this trend is having a significant impact on the international school sector. We have seen first hand how this rising middle class is creating new opportunities and challenges for international schools.
In this article, I will discuss the rise of middle-class education in emerging markets and its impact on international schools, with examples from India, China, and Vietnam.
The Rise of the Middle Class in Emerging Markets
The trend is strong of a growing number of people moving into the middle class in countries that are experiencing economic growth and development. This trend is largely driven by increasing incomes and job opportunities, which are creating new opportunities for upward mobility.
The Brookings Institution has projected that the number of people in the global middle class is expected to increase from 3.2 billion in 2020 to 5.2 billion in 2030. This represents a significant increase in the middle-class population worldwide, and much of this growth is expected to take place in emerging markets, particularly in Asia.
The growing middle class in emerging markets is expected to have a significant impact on the global economy. As more people move into the middle class, they are likely to have more disposable income, which could drive increased consumer spending and demand for goods and services. This, in turn, could lead to new business opportunities and job creation, helping to fuel further economic growth.
It represents a significant shift in global economic power, with these countries potentially becoming major drivers of growth and development in the coming years.
The Impact on International Schools of a Rising Middle Class
The rise of the middle class is having a significant impact on the international school sector in emerging markets. As the middle class grows, so does the demand for high-quality education. Middle-class families in emerging markets are willing to pay a premium for education that provides their children with a pathway to success.
India, China, and Vietnam are three examples of countries where the rising middle class is driving growth in the international school sector. In India, the middle class is expected to reach 475 million people by 2030, and the country is projected to have the world’s largest tertiary-age population by 2035. This growth is driving demand for high-quality education, and the number of international schools in the country was expected to grow from 624 in 2018 to over 1,200 by 2022.
In China, the middle class was expected to reach 600 million people by 2022, and the country is projected to have the world’s largest middle-class population by 2028. This growth is driving demand for international education, and the number of international schools in the country grew from just 36 in 1990 to over 800 in 2018. Beijing’s clampdown on education providers since 2021, when it introduced new regulatory conditions on international schools has changed the focus there. While there will continue to be slow growth in some parts of China we see a significant u-turn in overseas involvement in the sector.
In Vietnam, the middle class is expected to reach 26 million people by 2026, and the country’s economic growth is outpacing most of its neighbours in the region. This growth is driving demand for high-quality education, and the number of international schools in the country has grown from just a handful in the early 1990s to over 200 by 2021 and a growing move towards 250 at the time of writing.
Even prior to the pandemic we were advising a number of large private equity and investment groups about the direction of the market and our preference for the “Tier 2” school sector. Even premium sector school brands were advised by us to consider broadening their focus and either creating a second brand or meeting the needs of families at price points 20-30% lower than premium expat schools. The market is larger and is also less sensitive to crises such as the pandemic which effected expatriates and the higher end of the market more than other sectors.
Our Advice for Overseas School Expansion and Emerging Markets
We have recommended to a number of elite school brands and education groups, who are clients of ours, to consider a tiered branding strategy in their expansion plan, similar to that adopted by Hilton hotels. Hilton uses a family branding strategy, with its chain of canopy boutique hotels, which includes Doubletree by Hilton, Embassy Suites by Hilton, Hilton Garden Inn, and Hampton Inn by Hilton. This approach is beneficial in that a positive customer experience with one of these hotels can help promote Hilton’s other hotels as well but this dynamic branding strategy allows Hilton to differentiate its products based on target markets. In fact Hilton has 19 unique brands across its 7000 worldwide locations.
The Importance of Engaging with Experts in the Field
As the demand for international education continues to grow in emerging markets, it is crucial to engage with experts in the field such as Global Services in Education (GSE). The team at GSE has extensive experience in emerging markets and middle-class education, and can provide valuable insights into the latest trends and opportunities. By working with experts in the field, investors and education groups can develop a comprehensive business strategy that addresses all aspects of the education sector and positions them for success in the rapidly growing international school market.
Contact GSE Soon
About GSE
Global Services in Education plans and opens international schools for investors, developers and governments, and manages them once they are running. 39 school projects delivered across 16 countries. Management agreements run a minimum of ten years.
The company was founded in 2011 by Greg Parry and Shanna Parry.