Anahita Mukherji | TNN
Mumbai:Million-dollar baby could well be an apt description for the average middle-class Indian toddler. In the absence of government regulation for preschool education, the private sector is making a killing in the market. Listed companies and strategic investors are backing big brands that operate playschool chains in metros and small towns.
The profit after tax of KidZee, a play school that runs 463 centres and is planning another 632, was Rs 80 lakh last year. The company expects that figure to rise to Rs 2 crore this year. The KidZee chain is backed by the investing might of the Essel group, of which it is a part. Essel is an entertainment company listed on both the National Stock Exchange and the Bombay Stock Exchange.
Educomp, another company listed on the BSE, bought a 50% stake in EuroKids, a preschool chain worth around Rs 80 crore. Educomp runs 450 centres in 160 cities and towns, including 30 centres in the northeast.
Most preschool companies use the franchise model. The company invests in curriculum development, teaching methods and “brand-building’’, while the franchisee provides infrastructure, including the premises.
It’s not just big brands backed by huge investors that have franchises. First Steps, a playschool that opened shop in Mumbai two years ago, recently started its first branch in the city and is considering a few more in future. “Starting a franchise is beneficial, as we can concentrate on our curriculum and do not need to invest in property,’’ says Sweta Kapadia, principal of the playschool.
Preschools give rise to high schools on parents’ demand
Mumbai: The private sector is investing in playschools in a big way. Eighty to ninety percent of franchisees investing in EuroKids are women entrepreneurs, ranging from chartered accountants to housewives, says company MD Uday Mathur.
“The franchise model works where investments are not huge. For a preschool, the typical investment is Rs 10 lakh per centre, unlike a high school, which would require up to Rs 10 crore,’’ said Sumeet Mehta, CEO of Zee Interactive Learning Systems (ZILS), which runs KidZee.
But that has not deterred popular preschool chains from spawning high schools, as parents who are happy with their toddler’s playschool want their child to stick with the brand right up to Class X. For instance Lina Ashar’s popular chain—Kangaroo Kids Education Limited (KKEL), which runs 60 playschools nationwide, has started 13 schools called Billabong High, while EuroKids runs four EuroSchools, the oldest being in Hyderabad. ZILS has eight operational high schools called KidZee High, and 12 more are coming up.
While the demand for playschools is higher in metros, they are steadily making inroads in small towns like Jalna and Akot in Maharashtra. Investment and fees, of course, are higher in Tier One cities. For instance, while Eurokids invests around Rs 15 to 20 lakh in a “premium school’’, the investment is around Rs 5 lakh in smaller centres. The investment is directly proportional to the fee charged. So parents in metros cough up around Rs 40,000 annually to send their child to a EuroKids centre, while their counterparts in small towns fork out Rs 10,000 a year.
Similarly, parents in big cities pay Rs 18,000 to Rs 30,000 a year at KidZee, the fee in Kolhapur or Pathankot is Rs 9,000.
Interestingly, hefty fees don’t necessarily translate into large pay packets for preschool teachers, who earn Rs 4,000 to Rs 8,000 a month. Some preschools offer their own teacher-training certificate courses for new recruits.
Preschool chains are out to capture a variety of market segments. Kangaroo Kids, which caters to an elite clientele, is now targeting the middle-class niche in Mumbai, Thane, Pune and Nagpur with its new brand, Brainworks. “We had a strategic investor for Kangaroo Kids, but a private company has invested in Brainworks,’’ says Ashar. While Kangaroo Kids charges parents around Rs 3,500 a month, the fee at Brainworks is Rs 1,000 to Rs 2,500. The curriculum, too, is different for the two brands. Investment in infrastructure and imported equipment is also slightly lower for Brainworks.
So what drives parents to enrol kids who can barely talk in playschools? “I put both my children in a Bandra playschool when they were 18 months old, mainly so that they could interact with other children. One of my kids is rather shy, and opened up a bit, thanks to the playschool,’’ says Anisha Seth, a Mumbai mother who shelled out a handsome Rs 25,000 a year for the playschool.
But while playschool companies rake in the rupees, the absence of government regulation leaves preschoolers and their parents vulnerable. “India is not the only country where preschool education is heavily privatised. The problem, though, is that we have no system of checks and balances,’’ says Nalini Chugani, president of the Mumbai branch of the Indian Association for Preschool Education (IAPE). Often, playschools are not as childfriendly as they claim to be, and may be little more than tiny airconditioned rooms stuffed with attractive equipment, she says. She adds that preschools often use a regimented method of learning that may be damaging to a child.
Interestingly, one of the big names approached IAPE for content development. IAPE drew up a roadmap that required an investment of Rs 5 lakh. “The preschool chain was unwilling to invest the amount we suggested, and dumped us, along with our plan,’’ adds Chugani.
The profit after tax of KidZee, a play school that runs 463 centres and is planning another 632, was Rs 80 lakh last year. The company expects that figure to rise to Rs 2 crore this year. The KidZee chain is backed by the investing might of the Essel group, of which it is a part. Essel is an entertainment company listed on both the National Stock Exchange and the Bombay Stock Exchange.
Educomp, another company listed on the BSE, bought a 50% stake in EuroKids, a preschool chain worth around Rs 80 crore. Educomp runs 450 centres in 160 cities and towns, including 30 centres in the northeast.
Most preschool companies use the franchise model. The company invests in curriculum development, teaching methods and “brand-building’’, while the franchisee provides infrastructure, including the premises.
It’s not just big brands backed by huge investors that have franchises. First Steps, a playschool that opened shop in Mumbai two years ago, recently started its first branch in the city and is considering a few more in future. “Starting a franchise is beneficial, as we can concentrate on our curriculum and do not need to invest in property,’’ says Sweta Kapadia, principal of the playschool.
Preschools give rise to high schools on parents’ demand
Mumbai: The private sector is investing in playschools in a big way. Eighty to ninety percent of franchisees investing in EuroKids are women entrepreneurs, ranging from chartered accountants to housewives, says company MD Uday Mathur.
“The franchise model works where investments are not huge. For a preschool, the typical investment is Rs 10 lakh per centre, unlike a high school, which would require up to Rs 10 crore,’’ said Sumeet Mehta, CEO of Zee Interactive Learning Systems (ZILS), which runs KidZee.
But that has not deterred popular preschool chains from spawning high schools, as parents who are happy with their toddler’s playschool want their child to stick with the brand right up to Class X. For instance Lina Ashar’s popular chain—Kangaroo Kids Education Limited (KKEL), which runs 60 playschools nationwide, has started 13 schools called Billabong High, while EuroKids runs four EuroSchools, the oldest being in Hyderabad. ZILS has eight operational high schools called KidZee High, and 12 more are coming up.
While the demand for playschools is higher in metros, they are steadily making inroads in small towns like Jalna and Akot in Maharashtra. Investment and fees, of course, are higher in Tier One cities. For instance, while Eurokids invests around Rs 15 to 20 lakh in a “premium school’’, the investment is around Rs 5 lakh in smaller centres. The investment is directly proportional to the fee charged. So parents in metros cough up around Rs 40,000 annually to send their child to a EuroKids centre, while their counterparts in small towns fork out Rs 10,000 a year.
Similarly, parents in big cities pay Rs 18,000 to Rs 30,000 a year at KidZee, the fee in Kolhapur or Pathankot is Rs 9,000.
Interestingly, hefty fees don’t necessarily translate into large pay packets for preschool teachers, who earn Rs 4,000 to Rs 8,000 a month. Some preschools offer their own teacher-training certificate courses for new recruits.
Preschool chains are out to capture a variety of market segments. Kangaroo Kids, which caters to an elite clientele, is now targeting the middle-class niche in Mumbai, Thane, Pune and Nagpur with its new brand, Brainworks. “We had a strategic investor for Kangaroo Kids, but a private company has invested in Brainworks,’’ says Ashar. While Kangaroo Kids charges parents around Rs 3,500 a month, the fee at Brainworks is Rs 1,000 to Rs 2,500. The curriculum, too, is different for the two brands. Investment in infrastructure and imported equipment is also slightly lower for Brainworks.
So what drives parents to enrol kids who can barely talk in playschools? “I put both my children in a Bandra playschool when they were 18 months old, mainly so that they could interact with other children. One of my kids is rather shy, and opened up a bit, thanks to the playschool,’’ says Anisha Seth, a Mumbai mother who shelled out a handsome Rs 25,000 a year for the playschool.
But while playschool companies rake in the rupees, the absence of government regulation leaves preschoolers and their parents vulnerable. “India is not the only country where preschool education is heavily privatised. The problem, though, is that we have no system of checks and balances,’’ says Nalini Chugani, president of the Mumbai branch of the Indian Association for Preschool Education (IAPE). Often, playschools are not as childfriendly as they claim to be, and may be little more than tiny airconditioned rooms stuffed with attractive equipment, she says. She adds that preschools often use a regimented method of learning that may be damaging to a child.
Interestingly, one of the big names approached IAPE for content development. IAPE drew up a roadmap that required an investment of Rs 5 lakh. “The preschool chain was unwilling to invest the amount we suggested, and dumped us, along with our plan,’’ adds Chugani.
NO KIDDING: Most playschool firms in India use the franchise model
NO CHILD’S PLAY
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