PRE-SCHOOL INDUSTRY IN INDIA

Market Overview: The pre-school / child care market in India is one of the fastest growing segment in India currently valued at more than 15,000 Crores with an estimated CAGR of around 22% during 2017 – 2022.

Currently the preschool industry runs on two models. The unorganized sector which is made up of local home grown preschools constitutes around 67% of the total market share. Organized preschools, that operates on a franchisee model is relatively smaller in number.

On the basis of facility, India preschool/child care market is broadly segmented into full day care and after school care. The full day care segment dominated India preschool/child care market in 2016, and the segment is projected to garner more than three-fourths of the market share in 2022.

One of the primary growth factors is low regulatory requirements to start a preschool in India and there is no federal authority in the country that oversees preschools or child care centers. Some of the other features are:

1. Rising parent concerns and awareness about early childhood education and care.
2. Increasing personal disposable income and propensity of Indian parents to spend towards education.
3. Increasing number of working women population.
4. Improvement in quality of preschool education as the market gets more organized.
5. The huge parental demand for preschools even in tier II and tier III cities in India.

Challenges: Though the preschool education sector is booming in India, it has its own challenges because Indian pre-school market is dominated by unorganized sector that lacks quality infrastructure.

1. A big challenge for home grown schools is the lack of development of an effective curriculum. A curriculum that is not research based and well designed.
2. Another major limiting factor is the high cost of sales and marketing. With schools cutting corners on this cost on account of limited resources, they are unable to attract enough leads to the school and hence viability becomes a huge issue.
3. With real estate prices burgeoning, rentals are becoming the single biggest recurring expenditure and can in fact become the make or break factor for many unorganized preschools.
4. Huge setup cost in relation to proper infrastructure and qualified teachers.

Government Initiatives:

1. Government-run Integrated Childhood Development Services (ICDS) and the private sector (standalone playschools as well as kindergarten sections of private schools) for early Childhood Education.
2. The Central govt. issued a National ECCE Policy to regulate Preschools and Day Care centres.
3. Delhi Govt. has announced to open 3000 ECCE centres.
4. Govt. approved Rs. 406Cr under ICDS during FY2017-18.

Opportunity Profile:

India currently has 35k+ Pre Schools in India. Total no. of children below age 6 is approx. 16Cr with 12Cr in Rural and 4Cr in Urban. With an average of 75 students, India needs 20 lakh preschool and day care centres.