How Duolingo Plans To Crack India's Tough Consumer Subscription Market

In India, the fifth largest market by daily active users in the world for Nasdaq-listed Duolingo, lies an anomaly.

The gamified language learning app, known by its green owl mascot perennially viral on social media, is seeing a flip in its revenue split in India.

Globally, 90% of Duolingo's revenue comes from subscriptions to its language learning app, where it has a freemium model, and the rest is from its other major offering—the Duolingo English Test—an alternative to global grading examinations such as the TOEFL and IELTS.

However, in India, the vast majority of revenue for Duolingo comes from the English test.

"This is due to a growing number of students wanting to study abroad. It has become particularly popular over the last couple of years. We see India growing rapidly to overtake China as the number one source market for students looking to study in countries such as U.S., U.K., Australia, etc.," Carrie Wang, head of Duolingo English Test and regional business lead for Asia, told BQ Prime. 

U.S. tech companies have faced a tough time trying to get Indians to purchase subscriptions. While India makes up a dominant, top 10 engagement market for companies such as Spotify and Amazon, it doesn't contribute meaningfully to revenue, as compared with the U.S. or Europe.

According to Wang, Indians will take time to warm up to the idea of a subscription-based service. "The way we see it, some markets are more ready for a consumer subscription model and some are less ready. We have the benefit of a global platform and multiple products that we can monetise. So, it's about taking a long view and monetising in an appropriate way," Wang said. 

Duolingo hasn't been aggressively pushing for users to take up a subscription, she said. "In India, our focus for the app is growing overall awareness of the brand and users. We see a ton of headroom for that."

The company will also look at optimising pricing for Indian users in a bid to grow, Wang said. "Consumer subscription is in its early stages in India and also in many markets in southeast Asia. We're happy that different markets are in different phases when it comes to freemium adoption. We will optimise our pricing for India. Many U.S. companies have done so ... We're not in a rush to get to that 90:10 ratio that's there globally."

In 2022, India was also the fastest growing among its top 10 markets ranked by daily active users. "We've been here for a long time, but seen really strong growth over the last couple of years," she said.

Wang revealed that after English, Hindi is the second-most popular language being learned in India, followed by French, Korean and Spanish. "There's so much language diversity within India that we're seeing a lot of people who speak vernacular languages learning Hindi on Duolingo."

In the next three to five years, Wang said Duolingo's aim is to cement the position as the top language learning platform in India. "We want to become a household brand, the way Netflix or Spotify are becoming. In terms of the English Test, we want to be the English test of choice for Indians that are heading abroad for studies."