What’s the future of private coaching institutes in India?
We tried to find the answer to this question from one of the edtech founders, Toprankers’ CEO Gaurav Goel, a leader from Stanford GSB. He mentions that the “Offline coaching institutes are here to stay but they need support in online adoption, meeting millennial needs, student enrolment & more” & we agree.
Seeing the growth and trends in education over the years now, we also believe that it is the future of the $40B private tutoring and coaching market in India, a sector growing at a 35% CAGR. The following are the reasons for this growth.
- Inadequate teaching in schools and colleges and mounting ambitions have led to a mushrooming of private tutoring centres.
- With the increasing peer pressure, competition & future demand, a majority of parents are forced to rely on private tuitions in addition to attending classes in school.
- Majority of the parents think that they lack knowledge about the current and future work demand hence are ill-equipped and also lack time to teach their children on their own.
Test preparation and private tutoring comprise a big chunk of Indian education. With major players in the offline space, the last 5 years have seen a paradigm shift from “only offline” to “offline + online” teaching in order to cater over 400 million K-12 students and their custom student needs.
Riding this wave and betting on the future of “anywhere/anytime learning”, came some players who opted the “only online” path, who didn’t see any future in offline play.
Whereas entrepreneurs like Gaurav Goel saw an opportunity to bring offline to online and supplement existing businesses. “We saw that a lot of exciting quality work has already been done by existing coaching institutes which do not need reinvention but mainly need support to move their existing work online resulting into better quality and trust other than the new companies who have jumped into digital teaching” added Gaurav.
Toprankers, founded in 2014 is India’s fastest growing online coaching marketplace. It is solving education problems for the students (majorly in Tier-2 and Tier-3 cities) who don’t have access to top teachers and cannot migrate to Tier-1 Cities or Coaching Hub Cities. It helps them prepare for the exams considering the associated costs by providing quality and affordable access online.
Students not only benefit from the offline ecosystem which has been existing since years, but has the flexibility and features to be able to learn online along with vernacular options in some cases.
It is a beneficial platform for coaching centres which are willing to get more students to grow their revenues, but face issues like high capital expense to open new coaching centres in Tier-2 and Tier-3 cities, limited availability of star teachers, capacity per batch limited by brick and mortar setup; and offline assessment of students which is time-intensive and costly.
It’s a win-win for both students and coaching centers with this model. Other benefits include:
High Quality but Low Cost
The marketplace is currently providing online coaching modules on Banking and Insurance, SSC, Railways, Design, Law (CLAT), Teaching exams in India with access to doubt clearing sessions & study material for reference.
It provides vast nationwide visibility to coaching institutes by listing them in its highly rated marketplace platform. The team claims to bring offline coaching courses online at only 40% of the cost, making the course fee for a student accessible at ~INR 6,000 instead of INR 15,000 on an average.
Alternate to New Centers + Solid Results
The platform enables coaching institutes to create additional income by empowering them to teach more students using the existing physical classrooms.
With 10-15 coaching institutes being added every month, more than 300+ coaching institutes have chosen Toprankers’ Test Preparation Technology (TPT) SaaS platform as a way to serve their existing students more effectively and to grow their business by offering online classes to remote locations.
This shows that bringing more students with the least marketing efforts is always going to be a lucrative opportunity for existing offline coaching institutes.
Toprankers TPT platform allows coaching centres to broadcast live videos, and prepare students for exams by offering online doubt clearing sessions, quizzes, full-length online examinations, mock tests and personalised reports using inbuilt analytics. The courses offered by these coaching centres are also promoted on their marketplace - www.toprankers.com - which attracts 750,000 new visitors every month and has more than 3 million registered students, who have made 1,00,000+ Transactions over the past two years.
Some of their clients like LegalEdge, who were teaching 400 students in their offline batch before partnering with TopRankers, are now able to add another 400 students via the online marketplace.
Also in terms of results, out of the top 100 in the CLAT exam, 28 students cleared the exam using TopRankers platform.
Founders can themselves achieve scale instead of hiring new teachers
One of the reasons of success for coaching institutes in the online market is the quality content delivery by a star teacher. This makes it tough for institutes to hire new teachers and achieve the same quality of delivery justifying the brand. But this is easily doable now with platforms like TopRankers.
TopRankers partners with several cardinal pioneers of this industry, like Platform Coaching for railway exams, Paramount and Mother's Hub for SSC, LegalEdge Coaching for CLAT and many other leading players.
With TopRankers, Platform Coaching recently had 1800+ students attending one single batch which was impossible to cater offline.
When asked on competition, Gaurav says, “Toprankers does not see much competition on the multi-sided platform side. There is no company which is providing the SaaS platform to coaching centres and also helping them to sell products on their own marketplace. TopRankers has a strong anchor for both students and coaching centers, - student gets high quality branded content and the coaching center gains extra revenue from the marketplace beyond solving needs for their existing offline students with mock tests and online coaching. This is like the Swiggy or Redbus Model.”
“Indirect Competitors though would be few test prep companies which are selling their own learning and mock test products. All of them are struggling to generate revenues and spending about Rs. 4 to earn Rs.1. This is the FreshMenu Model. In a nutshell, we are Swiggy and others are FreshMenu,” he adds.
Conclusion and Growth
There are 10,000 offline Coaching Institutes in India generating $7 billion in revenues annually. These institutes offer coaching classes for national/regional entrance exams (IT-JEE, NEET, CLAT), foreign college exams (SAT, GMAT, LSAT) and government services exams (SSC, banking, railways). These exams are now migrating from offline to online mode and coaching centres in the test preparation industry need software to deliver online coaching & periodic mock tests for their students. The TopRankers TPT platform fills this gap adequately at scale.
Approximately, there are over 50M students who are preparing for these entrance and government exams annually. As also mentioned in the KPMG report, the online education market for the test prep segment is growing at 64% CAGR and we are witnessing all competitive exams moving online.
For more latest updates, You can join us on Google+, Twitter, Linkedin