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The churn is on at the Kota factory

In the last 10 months, the coaching industry has taken a huge hit. And the estimates are that this fiscal year is likely to result in a 30% contraction in the city’s economic fortunes.Premium
In the last 10 months, the coaching industry has taken a huge hit. And the estimates are that this fiscal year is likely to result in a 30% contraction in the city’s economic fortunes.

  • 2021 is looking like year zero for the coaching hub. Kota’s shifts signal what’s to come in India’s education space
  • The institutes that dot Kota are hoping that these unfolding changes will be for the better. They are desperate for a smooth landing after the upheavals caused by the pandemic.

KOTA/JAIPUR : Sitting inside a spacious office in one of Kota’s sprawling coaching complexes strewn with half-finished buildings, Manoj Sharma has been dreaming up startup ideas off late. “A startup to micro-analyse the academic and social performance of each student in Kota has been on my mind for some time," said Sharma, a top executive in the city’s multi-million-dollar entrance exam prep industry.

Kota’s educationists have always had an eye for business ventures. But 2020 has been a year unlike any other. When online education and edtech is the only game in town, what does a former industrial town that has laboriously built up a slew of massive coaching complexes do? Startup ideas are the flavour of the season.

For now, though, men like Sharma are sticking to what they know best. He recently took over as the chief executive officer (CEO) of Vibrant Academy, one of the bigger players in Kota’s coaching industry. Sharma was with another rival company, Resonance, for more than 20 years until he quit.

“Perhaps, the time is not right for such startups yet," he reasons. “With online being the catchword and uncertainty still prevailing, this year does seem bleak in terms of students arriving here for a two-to-three-year stint."

The opening up of the coaching institutes after a gap of nearly 10 months on 18 January hasn’t brought much relief to the city, whose local economy revolves entirely around the regular influx of students. The city’s deserted streets and near-empty brick-and-mortar campuses are a far cry from its heyday. The shine is off Kota’s classroom coaching, at least for now.

Over the past 25 years, as India’s economy boomed, Kota carved a niche for itself by reliably getting students to clear IIT, NEET and other entrance examinations. There have been enough debacles along the way—student suicides, cheating scandals, and, at times, nasty and bitter rivalry among the town’s 300-odd institutes—but a certain model of coaching class-led education that has spread across the country became associated with Kota.

Now, with the state of education in serious flux, it is Kota which is once again giving early cues as to which way things are headed. Coaching institutes like Vibrant Academy and Nucleus have swiftly entered into tie-ups with Unacademy, a Facebook-backed education startup valued at over $2 billion. Prominent education startup Byju’s is working with expert subject teachers from many institutes and providing a platform for them to deliver live classes, say teachers from Kota.

It’s a steep learning curve, but the churn is on at Kota. It is, after all, a matter of survival—for an industry, a city.

“The learning outcomes of online education on tech platforms is yet to be known. It is difficult to keep oneself motivated online. So, Kota cannot be written off completely," said Maheswer Peri of Career 360, a tech-driven educational product and services company. “But keeping the pandemic in mind and the online onslaught, Kota’s fame as a coaching hub is going to come down drastically over the next two years."

Terms of engagement

With online classes the order of the day, jobs have already dried up completely. Many of the top-notch executives in the coaching industry are either switching jobs, joining edtech companies, or are starting their own startups to ride out the crisis. So are the coaching institutes, who are either tying up or talking with tech companies over the last two months in order to stay in the race.

“The biggest learning in the crisis has been that the industry has not kept up with the changing trends. And it shows in the minimum investment in technology so far," Virbrant’s Sharma said. “Kota’s USP has been its traditional and time-tested classroom teaching. The industry was not at all ready for this sudden disruption. Till now, the investment has been mostly on huge campuses with big classrooms accommodating more than 200 students. Now, all of these would have to change. It has to be a blended approach—both physical classes and technology-driven upgradation."

For the moment, the edtech companies seem to have the upper hand in the frenzied race for tie-ups. Motion, one of the smaller coaching players, recently partnered with Byju’s to allow its teachers to take classes on the tech firm’s platform. The Motion brand, though, is not visible during the sessions.

“Nonetheless, it is a two-way process, and we are learning from them as they are from us," Motion’s director Nitin Vijay told Mint.

Kota insiders say that while some teachers have been contacted directly by the edtech companies and have been given monthly contracts for taking classes on online platforms, others have gone for tie-ups with coaching institutes on the basis of an annual contract.

The interesting point here is teachers are being paid according to the institute’s brand name and also based on the individual’s reputation. Apart from that, the pay structure is based on the internal feedback of the hiring team. But nothing is fixed, all deals depend on the brand value and the teacher’s performance.

Vibrant’s Sharma says that while teachers must give a minimum commitment of teaching hours per day/month/week as prescribed in the annual contract, they also have to mandatorily promote their own courses individually on social media using discount coupons.

“It is going to change the coaching landscape as all teachers would have to perform," Sharma said. “In the days to come, it would almost be like an IPL auction, where you (students) get to pick your players. Teachers have codes and you can pick the one who makes your lessons easier. Today’s generation demands more efficient teaching systems. Institutions which cannot deliver would lose out. But there is fear of commodifying teachers too."

The institutes that dot Kota are hoping that these unfolding changes will be for the better. They are desperate for a smooth landing after the upheavals caused by the pandemic.

“Why would these billion-dollar tech companies shop in Kota if not for its unique teaching methodology?" asked chemistry professor Shishir Mittal of Vyas Edification, who has a teaching experience of 25 years and now takes classes on Byju’s platform. “With our help, the edtech companies would understand that Kota’s methodology is neither a myth nor a hoax," he said.

There are many who feel Kota should never give up its USP—its meticulous methodology. Take Vedotroyee De from Silchar, who spent a year in Kota for NEET coaching before the virus struck; she couldn’t clear NEET but got through engineering entrance this year. “She would have gone back to Kota for its distinctive coaching if she hadn’t cleared engineering," her mother Babi De told Mint.

That said, for years, coaching institutes have also been dogged by complaints of segregating students into elite and non-elite groups on the basis of internal marks and creating a type of cut-throat divide. Many complain about the quality of teachers, as the level of attention from star teachers depends on the batch that a student gets put in. Online classes may put an end to all of this.

Pandemic pause

In the last 10 months, the coaching industry has taken a huge hit. And the estimates are that this fiscal year is likely to result in a 30% contraction in the city’s economic fortunes.

Kota insiders say the delay in board examinations has already wiped out the first phase of admissions, which normally happens in March-April and fears of covid also continue to persist. There is likely to be a steep reduction in fees by June—that is, if new admissions commence at all.

As it is, the online coaching fee is way below the classroom rates at Kota. That’s why the allied industries of hostels, PGs, one-room studio apartments are staring at an occupancy of 25% or less for a long time to come.

In pre-covid days, every year, the city witnessed an annual influx of about 150,000 students, whose average spending was around 200,000-250,000 per year. This included around 100,000 for coaching fees and a similar amount on accommodation and food. So, the industry’s annual revenue totalled around 3,000 crore a year.

Industry insiders say that during this session (2020-21), an estimated 100,000 students have enrolled for Kota’s online coaching and its average fees amounts to 50,000 per student. So, the coaching revenue stands at about 500 crore.

Manish Jain, founding president of Kota hostel association and the owner of a studio apartment complex, says his condition is precarious. “In pre-covid times, I rented the apartments at 25,000 and they were fully booked all through the year. Now, nobody is willing to take them for as low as 7,000. The last 10 months, I have managed somehow, but now I stare at a bleak future."

In many ways, 2021 is likely to be a zero year for the city. Although coaching institutes insist the number of students returning is high, industry insiders say not more than 10,000-15,000 students have actually returned. These are typically old admissions who want a last-minute brush-up before entrance season begins.

New admissions are not likely before June 2021, confirms Nitesh Sharma, head of corporate communications, Allen, the biggest player in the coaching field. The company, which has captured more than 65% of the market, says their online courses have been a hit with over 1.43 lakh admissions till now.

“Kota should ideally forget about 2021," says Ashok Sharma, a former chemistry teacher at Allen who now runs his own institute.

The way out

Experts say that in order to counter total annihilation, Kota’s coaching industry leaders need to pull up their socks fast.

First and foremost, the leadership has to be proactive towards emerging trends in the industry, especially in the use of technology and user behaviour.

Continuous innovation in products and services, teaching methodology, study material, and academic analytics will be required to make coaching more affordable and accessible. That might be the only way to make a hybrid or classroom model cost competitive as test prep moves swiftly online.

Teachers will also need to be digitally empowered. Coaching institutes, meanwhile, will have to consolidate all their services digitally—test packages, live classes, and pre-recorded courses—on one platform. But all these would incur high cost, said Vibrant’s Sharma. “That would be hard to set aside in pandemic times."

Meanwhile, online firms and edtech disruptors are not waiting for things to change organically. Fuelled by the pandemic-induced online pivot and record fund inflows, they are pushing ahead.

“The in-person model is inherently exclusive in nature—even if it is affordable," said Sahil Sheth, CEO, Lido Learning, a new education startup that caters to school students. “Classroom settings also inherently don’t allow for a high level of personalisation due to overheads. There’s always the tug-of-war between keeping class size small and prices low. Edtech allows all stakeholders to get more out of their time and lives. As more people realise this, we are going to see a great disruption in the classroom coaching model."

Will the online push expand over time or will the army of dream-eyed teenagers continue to flock towns like Kota to sacrifice two years of their lives on the coaching lane?

It’s hard to predict amid so much flux, but Kota’s coaching factories aren’t giving up without a fight. Despite the limited resources, several institutes are already thinking beyond tie-ups to figure out in-house, out-of-the-box solutions.

Motion, for instance, is starting to integrate technology to its specialised content in order to provide customised solutions to each student.

“Each child is different and has different weaknesses, so using technological and human interventions, we will start to assess each one’s needs separately," said Motion’s Nitin Vijay. “In Kota, till now, the same content was being given to every child irrespective of his grasping power. This is going to change now as covid gave us the time to rethink. Kota has withstood earlier reverses and retained its leadership. But covid-19 has been nothing like before. This time, the churning is unprecedented."

Rakhee Roytalukdar is a freelance reporter based in Jaipur.

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