Indian preschool market is emerging as one of the most highly competitive markets in the education industry, thanks to the immense potential of the market. The market is poised to grow at a CAGR of around 23% during 2017-2022.
Enticed with such huge potential, entrepreneurs are willing to invest in the preschool market. There were 33,000 preschools in India as of 2015 and the number is growing exponentially. In such a high competition, it is imperative to make your brand stand out from the crowd. With personalised learning becoming a trend in the market, many preschool brands are stressing on providing personalised learning at preschool level.
Organised Market Catalysing the Growth
The biggest trend that has been observed in the preschool market is the paradigm shift of the market towards becoming an organised sector. A few decades ago, preschool market was dominated by the unorganised players and there were hardly any organised players in the market.
As per some industry insiders, the share of unorganised market is still more than 90 percent as of now, while the organised segment accounts for around 10 percent. But with time, the share of organised market has gradually increased. The organised market is rapidly growing at over 45 percent on a yearly basis.
As the market becomes organised, the way of doing business also gets streamlined. So, something like personalised learning also requires a streamlined and structured way. It requires a concrete structure to prepare a personalised program for each student or similar group of students. For instance, one has to get a detailed study of the category of students – let’s say a group of students that require auditory and visual training to understand the concept of mathematics – so as to design a full-fledged personalised program.
With the market becoming organised, many brands can think of investing this much time and effort to create a specialised program. The organised market, therefore, makes it easier for players to focus on personalised learning and create a niche in the market.
Franchising Prospects
As mentioned before, the paradigm of the market is largely shifting towards the organised sector, most of which primarily operate on franchise model. With franchising being a low-cost model, big fishes in the preschool market like Safari Kid and KidZee are opting for franchise model to penetrate deeper into the market, hence flourishing franchise opportunities in the segment.
On so many prospects, franchising can help entrepreneurs. From a franchisor’s point of view, it gives franchisors the opportunity to expand their brand easily, without worrying about financial risks. And from a franchisee’s perspective, it helps them to enter the world of entrepreneurship without taking the headache of building brand image and start-up costs.
Talking about the personalised learning at preschool level, a lot of franchise brands are also taking up the trend of personalised learning and are offering franchise opportunities for like-minded people to encourage the trend even more. As both of them, the franchisor and the franchisee, know the potential of personalised learning, their union to achieve the success binds them together and makes franchising a more sought-after model for both of them.
While talking about the franchise requirements, many brands have different criteria for selecting their prospective franchisee. In conversation with Franchise India, many brand owners shared their expansion plans and the crireria they have for selecting franchisee. Shilpa Marla, Chief Operating Officer, Safari Kid, elaborating on their franchise expansion plans and says, “We are looking for people who have the same thought process and a similar passion as we have towards children and are looking forward to pan India expansion.”
Many brands are looking to expand aggressively to keep themselves ahead of their competition. "We are looking to expand our presence in tier II and III cities and are aiming to cross 300+ schools in this fiscal year" says Namit Gupta, CEO, Junior DPS.
Typical Franchise Requirements
A preschool franchise is an easy and affordable option of breaking into the education industry. Preschool franchises don’t require much of an investment but requires a large area to accommodate kids. The location of the schools also plays a huge role while selecting on the prospective franchisee. For instance, an established brand will look out for those entrepreneurs who possess a location that is accessible for the target consumers and a location that does not hamper the brand image. Many franchisors extend support to the franchisees when it comes to choosing locations.
Talking about the typical investment range of a preschool franchise, it starts from Rs 5 lakhs and can range up to Rs 50 lakhs. The area requirement of a preschool franchise generally starts from 1500-2000 sq ft and the breakeven period in most of the franchises can be expected in 12-24 months.
Conclusion
With time, families are largely disintegrating due to reasons like employment, leading to a rising number of nuclear families. In nuclear families, in the absence of elderly people it becomes tougher for the parents to take care of their children, hence they prefer preschools. With the rising number of nuclear families, the preschool franchises have received higher admissions, giving the segment a great push.
With the time passing by, more formal versions of preschools evolved, creating a niche in the education industry. In fact, preschool franchises are one of the most lucrative business opportunities in India as the industry is currently pegged at a whopping Rs 25,000 crores. This makes the preschool franchises such gigantic industry. Preschool franchises instil education and are promising investment opportunities for aspiring franchisees.
