The Test Prep industry in India is largely dominated by offline coaching institutes and behemoths of the industry with high vintages and experience. While it’s clear that technology would be the future for spreading Test Prep to the remote Tier-3 and Tier-4 locations in India, it was a huge step for Aakash, the biggest name for classroom-based test prep, when it decided to introduce its own technology-powered digital test prep solution in the market.
In an interview with Mr Aakash Chaudhry, Co-Promoter and CEO at Aakash Educational Services, we understand the journey behind creating and scaling an independent solution in the form of Aakash Digital and how the Test Prep industry is shaped to grow in the future, with structural changes like the New Education Policy 2020 coming in.
Q. According to you, how has the growth been in the Indian Test Prep landscape over the past 3-4 years? How has the online and conventional brick-and-mortar test prep companies contributed to the same?
As far as Test Prep is concerned, last 3-4 years it’s been a great journey. As per a CRISIL Research, it’s a USD 5 billion market as of 2016 projected to grow to USD 9-10 million in 2021. That’s a robust 20-25% growth expected. The trend within the segments has been that Students in the Undergrad level are mostly catered by Offline Test Prep. In totality, the UG market in Test Prep is highly addressed by Offline players and progressively we’re seeing the entry of online players into the segment. On the PG side, students are pretty much accustomed to Online education due to time and scheduling constraints.
In the UG market, students are the consumers and Parents are the customers, whereas in the PG market both entities are the students. Parents believe that a Higher Level of Structure and Discipline is way more entrenched in a Classroom environment rather than a Self-paced Online program and hence that plays a critical role in UG being dominated in an Offline environment.
COVID has been a game-changer in making students more familiar with Online Test Prep. Going forward, the overall market for Online test prep would definitely increase whereas ardent service takers for Offline would definitely come back once the situation improves, simply due to the high stakes nature of exams such as JEE, NEET. It will definitely open up the market for kids who weren’t even considering Online Test Prep in the first place. This new demand would lead growth going forward.
While currently roughly 12-15% people are relying on Online Test prep as far as UG test prep is concerned, in next 2-3 years this could go up-to 30-35%. It’s a significant jump given the mindset change required, tech infrastructure, learning devices, and additional investments. For PG, majority of the students will go online in next 2-3 years.
Q. What would you believe would be the biggest hindrance for companies looking to tap the market for Online Test Prep?
When we started Digital in 2012-13, the mindset was to incubate a new age product for a predominantly traditional company. The whole technology piece that delivers the expected outcomes and pedagogies is quite difficult to create. To get these kinds of products out, you need a substantial talent pool team. Tier-2 and Tier-3 test-prep hubs have large offline players that have great teaching talent, but these companies don’t have the requisite engineering and product talent to create suitable tech products. Apart from that, the overall way of approaching a student and creating an end-to-end pedagogy of performance to improve the student, are quite difficult to implement from a distance. It’s a completely 180 degree shift for any offline company. In fact that’s why we moved out our entire digital business to create a separate company called AakashEdutech, so that they’re not confined by the thought process that the Offline business has. During the COVID lockdown, in flat 5 days, we were able to move 2,200 teachers completely online. The greater challenge lies within creating a great product and engineering team along with talent for digital marketing team that markets the product differently.
Q. How did Aakash come up with the plan of expanding to the Digital segment?
It was a very logical move for Aakash to move digital. We saw that Online testing is happening and we also realized that there were lot of components in offline that we weren’t able to service and we needed online touch-points. Leveraging tech to improve what we have in offline was also one of our key drivers to spend on Online Test prep and invest in tech as a way forward for us. For FY’20, digital business contributed 6% for the parent company, but after COVID-19, we are now looking at digital contributing a substantial share of the overall business. Running the largest national test prep network in India, we realized that post opening 200 centres across thecountry; we aren’t reaching close to even a north-sided single digit market share. There are so many students that are not exposed to the Aakash network, so we asked that can’t we reach out to them with the help of technology. When we started seeing traction in Digital and the kind of growth it was seeing each year, we needed a separate business environment for the digital business. Ultimately the growth level discussions were entirely different for both the offline and online businesses and eventually we had to single the online business out as a separate entity. The talent too on both sides was starkly different. In the future, we are looking at Digital to be the key driving force for the company, reaching out to a million paid students in next 3-4 years, which now seems to be an achievable task and contributing close to 30-40% business for the parent company.
Q. How is Aakash Digital’s product offerings different from each other and how do they propose a different solution to test takers?
In 2012, we launched our Online Testing business, which went on to become an online entity. Within Online, we had Live Tutoring for kids wanting a more engaging and structured learning. Then we had Recorded Lectures called ‘AakashiTutor’, which is for Test Prep students looking to learn at their own pace. On the K 12 side, we have the Meritnation site, which is basically for school students that want good marks in schools and tuitions. The need to create all of this was essentially that offline can’t be present everywhere, as the capital cost in setting up different aspects of an offline business is very high. At an average, the experience and quality level across the faculty with the company is on a similar level. To bring that expertise to the remotest corners of the country through offline was not possible and unviable. That is why we moved to online and decided to take the self-paced online version of offline first. We then started Live Tutoring to have a more involved and 1-on-1 teaching experience. We have now developed the biggest omni-channel education provider in India, where we have a huge network of offline centres, live tutoring on our own platform and the self-paced online tutoring. We have recently launched Hybrid, where a student can be studying in Bangalore in Whitefield, but they can come to Indiranagar on a Sunday for doubts. You can do Live Tutoring 6 days from Indiranagar and then attend Live Doubts as well on the weekend, staying at home. Basis of the demand of the customer essentially, we now have complete offline solutions, complete online solutions and a mix of both.
Q. How do different business segments contribute to Aakash’s standing and legacy in the Test Prep industry?
We have always been focused upon Medical Exams and Engineering. Within the test prep ecosystem, these exams constitute close to 50% of the overall test prep market. This year alone, 16 lakh kids are writing NEET and about half of that number is studying in class 11th. So you can very well imagine the market size for Medical and Engineering put together is ~35 lakh alone.
Q. How do you feel the New Education Policy will impact Test Prep?
Looking at the NEP and having a public level exam at 3rd, 5th and 8th would further add to the tuition market. While the policy is intended to lower the intensity level and redefine the structure of classroom teaching, a big question is that can teachers conceptualize, design and implement a new learning methodology and forward it to the kids. If they can’t, the students will go out for help, in the form of tuitions and coaching, as these exams would be important for them. On the test prep side, as long as there is a disconnect between the number of seats and the candidates appearing for an exam as well as the high student-teacher ratio, there will always be a need for supplementary help. While the coaching market is not going to go anywhere, the people in the industry will need to adapt to the test-taking requirement that the government may project.
For More Information, Refer to this link
https://www.kenresearch.com/education-and-recruitment/education/india-test-preparation-outlook-to-2025/444311-99.html
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