📚 The Offline Edtech Wars: Kota Edition
Edtechs have realised that going offline is the way to survive in India. And coincidentally they are all targeting one city to rule this offline space.
Edtechs.
This one word brings out a range of emotions.
While some still believe that edtechs are the future of education, for many (including investors) these hopes have dimmed after the economy has opened up and students have shown that they prefer offline teaching (Read more about edtechs’ offline play here).
So, are edtechs over in India?
No, rather they are just preparing for a major battle for the Indian student's attention in a new battleground: the offline tuition centre.
The first site of battle is India's biggest test-prep centre: Kota.
And it just got more interesting thanks to the entry of a new profitable player: Physics Wallah.
⚔️ The Kota Wars
Kota is no longer just a tiny city in Rajasthan. It is an ₹800 crore tuition centre, to which over 1.5 lakh students make a pilgrimage every year. These students come mainly to prepare for either IIT or NEET.
And one out of 50 are successful in their endeavours.
That may seem like a low success rate to you, but to put things into perspective one out of 5 IITians are from Kota.
Yes, the problem isn't that Kota is not successful, the problem is that there are very few seats in IIT and medical colleges in India.
This not only creates an insane level of pressure and anxiety on parents and students, but also puts Kota on a pedestal for them.
And after tanking horribly at online sales (Byju's and Vedantu are barely profitable, making Rs. 50.76 crores and Rs. 93.7 crores, while Unacademy is still making losses) with customers unhappy with them, these centres are now also going offline and targeting Kota, where lakhs are coming in every year anyway.
Byju's already had an in here, with its Aakash Institutes. And Unacademy, which had already declared war on Kota with its 'Kota Factory' series, has also entered Kota now.
What's more, it has declared full on war with one of the most premiere organisations in the city: Allen Institute.
Allen Institute commands about 70% of the market share of Kota. However, Unacademy is working hard to end this monopoly. How you ask?
By poaching teachers from Unacademy. Around 40 experienced Allen teachers were recently poached by Unacademy at sky-high salaries.
However, Allen is not sitting idle. While Unacademy is entering the physical realm, it has entered the digital realm, to expand its business beyond Kota as well.
And it needs to expand now to boost its business. Not just because of the Unacademy threat but because Physics Wallah has entered Kota.
Why is Physics Wallah's entry such a big deal?
Physics Wallah could definitely threaten not only Allen's monopoly but also give tough competition to Unacademy and Byju's in the test-prep city.
The company has managed to become one of the only bootstrapped edtechs to become profitable without spending lakhs of crores on marketing and customer acquisition. Its app also has 50 lakh+ downloads.
And a major reason behind this success is its teachers and mainly its founder: Alakh Pandey.
Pandey has managed to become that one teacher that everyone hero worships due to his relatable YouTube lessons.
What's more, the company has managed to understand that a major pain point of the Indian audience is that tuitions for test prep are unaffordable.
So, it offered classes for free on its YouTube platform and on its app for a minimal fee of Rs. 3,500 for the entire course.
This appealed to students in Tier 2 and Tier 3 cities, who couldn't afford the more expensive courses provided by Byju's (Rs. 90,000/year) and Unacademy (Rs. 2,300- Rs. 4,600/month).
And Physics Wallah is now also trying to disrupt the offline tuition industry.
Read more like this:
Physics Wallah’s Disruptive Tactics
Where Allen and other institutes charge lakhs for IIT-JEE tuitions, Physics Wallah aims to teach the offline course for Rs. 35,000-Rs. 40,000 (offline model incurs more costs than an online model).
In fact, Physics Wallah's entry has also made some other Kota institutes reduce their fees.
So, you see, now why Allen and others need to fear the newly-minted unicorn that was born in funding winter.
But will PW manage to gain the same level of success offline? Some are sceptical.
Like we said, for many PW is Alakh Pandey. And while people may treat him like a God, he cannot be present in every offline centre to teach every class.
If other institutes offer better teachers than him or worse acquire his teachers, PW's offline model could bomb.
Meanwhile, while most edtechs are focusing on Kota and a few other cities, Vedantu has set up its first offline base in Muzaffarpur, Bihar.
If it seems like an odd choice to you, consider this: Bihar's fertility rate is high and 34% of college graduates in the state are unemployed.
You know what this means?
It means that Muzaffarpur will have a lot of children willing to take test prep classes and because of the high unemployment, they'll be desperate enough to pay high prices for results.
So, while most edtechs are vying for Kota, it may be Vedantu with its smart strategy that may win the offline edtech race.
However, we will have to wait and watch who succeeds and who tanks especially with the long funding winter ahead.
Let us know which edtech you are backing.
⚡In a line: Edtechs across India are now entering an offline battle of supremacy, ruffling the feathers of premiere offline institutions.
💡Quick question: Will an offline pivot help edtechs stay relevant or will they ultimately fizzle out?
🍿 Food for Thought: India has a shortage of around 14 lakh teachers. So, will the offline model be sustainable in the country or will we have to switch to online mode to reach and teach every child?
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