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Oct, 03 2011


India is witnessing a sea change in education sector. It's time to build business around out-of-the-box education concepts, as this industry is booming. Dive into new-age education concepts to drive profits.

India is witnessing a sea change in education sector. It's time to build business around out-of-the-box education concepts, as this industry is booming. Dive into new-age education concepts to drive profits.

WITH education no longer remaining a book-bound concept in India, the steady influx of new-age concepts have swept the education and training industry. Success of new-breed of 'edupreneurs' has proved that there is a huge potential in new-age education concepts. Opportunities galore from abacus training to language schools, e-schools, fashion schools, aviation schools etc.

Besides playschools and K-12 education, child development programmes, supplementary and vocational education is riding high on the opportunity radar. New-age education segment offers lucrative growth and success. Also, after tasting stupendous growth in the past few years, franchising in the new-age education concepts is bustling with opportunities. According to a recent research, supplementary education industry in India accounts for more than Rs 10,000 crore and shares maximum in the education franchising pie. There are approximately 50,000 franchise education outlets in the country as compared to about 2,200 company-owned outlets.

Based on research and consumer demand, we have taken up three new-age education segments child development, supplementary education and vocational courses for you to invest in. This trio of novel segments has moved investors to invest in these highly profitable business opportunities via franchise model for fast returns. Let's weigh the potential of each segment in detail.

Child development

Honing the skills of children, be it in sports, academics, music or other extra curricular activities etc is gaining importance in India. Through these programmes, children are exposed to a variety of activities. Therefore, there is tremendous potential in this industry in the years to come.

The new-age education programmes like abacus training, special hobby classes, language skills training etc have become an absolute necessity these days, as parents, too, are keen on over all development of children. Parents are keeping their fingers crossed and betting big on informal education systems, imparting required life skills to children. Such systems run in parallel to the formal education system. Despite government's efforts for development of children, informal education segment still remains untapped. Therefore, organised players are leaving no stone unturned to make the most of this opportunity. Besides, franchisors, in this segment, are witnessing stupendous growth, as they have no competition.

Demand for supplementary courses is on the rise in metros, but the trend is picking its pace in small towns too. Interestingly, by default every child, undergoing formal education, can be a potential consumer for these players. For instance, Brainobrain is an institute that teaches mathematics through the Chinese abacus system. The courses are designed to enhance the memory, speed, accuracy, visualisation skills, concentration and self-confidence among children. They target children between five and 14 years.

According to S Anand, Director, Brainobrain: “There is a huge potential in the child development industry. We have 600+ franchises, out of which 500 are in India and rest abroad. We are expanding at 30 per cent rate annually and are planning for global expansion too. The franchise fee for opening a Brainobrain outlet is Rs. 68,000.”

Supplement to success

With each passing day, India's supplementary education industry is touching new heights by clocking a double digit growth as compared to any other industry. This sector is further categorised into various segments like personality development, coaching, finishing schools, test preparation and tutoring services. The test preparation industry is majorly ruled by industry bigwigs like Career Launcher, ETEN ACE- Academy of competitive exams, IMS, Career Point, Laetus Education, Triumphant Institute of Management Education Pvt Ltd (TIME).

“According to experts, the entire education market is pegged at Rs 1, 50,000 crore. About 540 million people are below 26 years and at least 10 lakh individuals are seeking management education. It's a whole world of opportunity that needs to be tapped. Test preparation industry is about Rs 7,500 crore,” says Devesh Mathur, Head Partner Operations, IMS Learning Resources Pvt. Ltd, leader in management entrance training.

A decade ago, tutoring market was teacher-led and they used to deliver through a highly fragmented model. As far as preparation for entrance or competitive exams like IIT-JEE, CAT, AIEEE, PMT or MBA is concerned, students prefer to get training from institutes that assure quality coaching sessions with the use innovative teaching methodologies and the only way an organised institute can cast its spell across length and breadth of the nation is via franchise business model.

Vocational education

As India is passing through a new-age transition phase in the education sector, the vocational segment in particular seems to have undergone a sea change. This is evident with the emergence of a handful of new-age education concepts with diversification into animation training, IT and BPO training, spoken English, staff recruitment solutions, CA training, aviation and hospitality, management training etc.

According to a report, the current size of vocational education is estimated at USD 1.4 billion and is expected to grow to USD 5.8 billion, a compound annual growth rate (CAGR) of 15.3 per cent. It is estimated that 90 million jobs will be created over the next five years, of which almost half (45 million) are expected in the services sector. Of these, an estimated 7-10 million are expected to be created in hospitality, healthcare, and modern retail alone. Of these new jobs, more than half will require some form of vocational training.

Commenting on the burgeoning demand of new-age education concepts in the vocational segment, Santosh Kumar Choubey, Chairman & Managing Director, AISECT Ltd, says: “We must realise that we need to update ourselves be it in technology, new theories or even market trends. Even the government has woken up to the fact that India is vastly under-skilled and has set aside Rs 28,000 crore to ensure that 500 million people are skilled by 2020.” These new-age concepts have also unleashed a plethora of options for brands in the franchise segment. As per industry experts, these concepts are churning out rich dividends for franchisors and their brands.

There is no doubt that future lies in new-age education and training concepts. Invest in education to reap rich dividends. This issue of The Franchising World sees education and training industry in its ‘new avatar’. Pick and choose the apt opportunity, as we have handpicked numerous businesses for you to invest in the pages ahead.

Inputs by Amanpreet Kaur and Tushi Deb.

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