Pre-school chains find hinterland a big playground

MUMBAI: Nestled amidst a row of residential buildings, a public sector bank and provision stores, off the Chintamanrao Deshmukh main road is a 2,500 sq ft expanse of colours, games, and toys.

Yellow, blue, orange, red stand out against a plethora of stacking blocks, pop-up toys, soft toys, shape sorters, lightweight balls, crayons, pencils and toy cars.

Situated on the ground floor of a four-storey building, the four rooms, which constitute this retreat, have walls painted with the English alphabets, numerals and pictures of animals. The mini chairs and tables lie all around the rooms. A visitor will hear the patter of kids, and the tunes of nursery rhymes.

Well, it’s a pre-school for children in the age group of one-and-a-half to 5 years.
However, it is not located in Mumbai, New Delhi or even Tier II places such as Indore or Ranchi. It is in the heart of Jalna, a few kilometers away from Aurangabad in Maharashtra.

It’s a part of a new phenomenon  in the education sector, that’s  driving its way across India. The organised pre-school segment is fast spreading into semi-urban India. Places such as Tenkasi, Tiruchengode, Panruti (all Tamil Nadu), Nadiad (Gujarat) and Chittor (Andhra Pradesh) are dotted with pre-schools that are serviced by organised players via the franchise route.

Uday Mathur, managing director of EuroKids International Pvt Ltd, says, “It’s a growing trend that will revolutionise the way pre-school education functions. It no longer works through the neighbourhood aunty system, where housewives run classes to engage children. It’s a complete organised set-up.”

The pre-school segment in India is currently valued at $985 million and is likely to touch $3,426 million by 2012, a growth of 28.3% per annum, according to brokerage firm CLSA Asia Pacific Markets.

“This means a tremendous potential for growth, as organised players presently service less than 5% of our total preschool market,” says Mathur.

“Currently, India has about 20 players in the organised pre-school set up and functions through the franchise model,” says AL Deivanathan, CMD of Apple Kids Education Pvt Ltd, a Chennai-based pre-school chain.

The franchise, who could be anyone from former teachers to housewives, often comes with a possible location in mind, says Mathur. “Often, our business development team helps the franchisee in getting a convenient location spread over an area of 1,500-3,000 sq ft, to service about 200 kids per centre.”

“The classroom ambience, curriculums, pedagogy, study, play materials and manpower is provided by the franchiser,” says Amol Arora, MD of Shemrock group of schools, a Delhi-based chain of pre-schools.

“We provide training to the franchisee, for a week or two. For smaller towns, the syllabus is also set in the local language,” adds Arora.
But, what’s exactly catalysing this trend in semi-urban places?

Mathur says increasing awareness about engaging young children in activities that enhance their emotional and intellectual growth is a key constituent. “We started with the metros in June 2001. Later, potential franchisees from semi-urban places approached us.”

“Whenever we venture into places such as Jalna or Tumkur (in Karnataka), the initial response is low. But, slowly, as the word spreads more and more kids get enrolled.”
The increasing disposable income levels are also helping the trend.

The cost of setting up a centre in a place like Yamunanagar is about Rs 3 lakh, as against the Rs 10 lakh in Delhi or Mumbai. “Thus, the fees charged in Yamunanagar would be cheaper, say Rs 500 per month, against Rs 2,000 in Delhi,” says Arora.
EuroKids currently has 450 centres across 163 metros and towns. Mathur said the company is targeting to reach 1,000 centres by 2010.

“At present, about 20% of our revenues come from smaller places such as Tura (Meghalaya), Tumkur and Nadiad. In the next two years, we expect nearly 35% of our total revenues from these places,” says Mathur.

Apple Kids, which currently has 163 pre-school centres, including 154 in South India, will ramp it to 500 in two years.

Deivanathan says that about 30% of the present revenues of Rs 1.5-2 crore come from the smaller towns. “We are hopeful that in the next 3 years, about 50% of our revenues would come from the smaller places.”

Shemrock, which started in 1992, will add another 200 centres to its existing 85 by 2010, including a few in small towns like Pinjore, Ambala (in Haryana).
Kangaroo Kids and Kidzee have 31 and 415 centres respectively and would size up that number significantly by 2010.

It’s a huge and potential market for children and adults alike.

g_priyanka@dnaindia.net