Strong local demand for private international education
among key drivers in the K-12 segment
Riyadh (Saudi Arabia), gulftech: Overall enrolment in K-12 schools in the Kingdom of Saudi Arabia (KSA) has grown at a CAGR of ~1% over the past ~6 years and has demonstrated marked resilience to the impact of COVID-19, according to a new report from global consulting firm, L.E.K. Consulting.
The report notes that out of the ~5.9 million students enrolled in K-12 schools in Saudi Arabia, the proportion of the population enrolled in private K-12 schools accounts for ~15% of the overall K-12 market. While enrolment in private K-12 is low as compared to other key markets in the MENA region, including UAE, Qatar, Kuwait, and Bahrain, it is indicative of the significant headroom for growth in the Kingdom’s K-12 private segment.
According to L.E.K.’s analysis, the private K-12 international segment has seen a steady rise in enrolment, growing at a CAGR of ~8% from AY 2015-20. A growing preference for English-based international curriculum, increase in disposable household income, and a rise in aspirations for overseas higher education amongst the local population, are some of the key factors that are contributing to this upward trend. As a result, the private international K-12 segment has partly offset the impact of the decline in enrolments in private national curriculum schools.
Commenting on this shift, Danish Faruqui, Partner at L.E.K. Consulting, and a founding member of the firm’s Global Education Practice, says, “The private international segment in Saudi Arabia has demonstrated resilience amidst the pandemic, supported by a strong demand, especially among locals, for high quality education with a growing preference for international curricula. The government, as part of Vision 2030, aims to increase the share of private education to 25% by 2030, which represents a significant increase in private participation over the next 8 years. This provides compelling investment opportunities and will pave the way for global private K-12 providers.”
The report further highlights that local enrolment in private K-12 schools is largely concentrated in the Premium segment (annual tuition fee between 22K-45K SAR) and the Super Premium segment (annual tuition fee more than 45K SAR) across urban regions, thereby reflecting the steady growth in demand for top quality, international curricula. Meanwhile, the Budget segment (annual tuition fee less than 15K SAR) largely caters to the low-income expatriate population.
According to Chinmay Jhaveri, Partner at L.E.K. Consulting’s Global Education Practice, “The private K-12 education market in Saudi Arabia is highly fragmented, with top global K-12 school chains accounting for less than 20% of the overall private education sector enrolment. A number of prominent global K-12 school chains are yet to establish a presence in Saudi Arabia. The Kingdom’s largely local demand for K-12 education presents an opportunity for international operators as it ensures a steady student base. This also presents a unique opportunity for investors looking to gain long-term value in Saudi Arabia’s K-12 education sector.”
