A SIP PRESENTATION ON

COMPREHENSIVE ANALYSIS OF PRESCHOOLS

BY- SHAILESH

VARANASI

Company Profile

Leader in education sector

Part of ESSEL Group
ZEE LEARN
Kidzee- Largest pre school chain in Asia

Objective of the Study

Primary objectives
To search and find the all the pre schools available in
Varanasi, U.P. and do their comprehensive analysis
To collect the views of the people about pre schools
and their needs and the awareness of these schools
in the city.

Secondary objectives
To study the concept of pre schools.
To verify the need for such schools.
To provide the strategies and ideas to grow such
schools in the city

Facts about varanasi

METROPOLITAN CITY population 3676841

Area
(1209 sq mi)
Rank 30th In population
Literacy 80.12%
Language - HINDI & Bhojpuri
Sex Ration 0.926 /
Website varanasi.nic.in
Religions Hindu 80% Muslim 18% others 2%
Children under age 6 497,151 (2011 census)

PRESCHOOL MARKET

Playschools, more popularly known as preschools, traditionally cater to the

1.5-6 years age group.
Increasing awareness among parents about the benefits of a quality preschool
education has been driving penetration levels and price discovery in the
segment.

Research Methodology

Research Design
Exploratory Research
Scope of the Study
The scope of the study was the parents of childrens
and people who have known about the pre schools.
And the information was obtained by visit to such
schools.
The research was conducted at Varanasi U.P.
Method of data collection:
Primary Data
Secondary Data

Preschools a snapshot

Segment

Preschool
Caters to 1.5-3 yrs
age
group

Revenues
($ m)
FY12E

Revenues
($ m)
FY14E

1000

1800

Growth
drivers

Key risks

Key players

Growth has been

largely
using the
franchisee route
- low upfront
investment
by franchisee
Highly
underpenetrated
market; 1 out of
every
100 preschoolaged
children enrolled

Target audience is
limited to a 2km
radius
Under high lease
rentals, economics
can be challenging
for
standalone
preschools

CAGR 36%
(Compound annual growth rate)

KidZee
Euro Kids
Apple Kids
Shemrock
Kangaroo
Kids
Tree House
Bachpan
Podar
Jumbo
Kids
Campus
Mothers
Pride
DRS Kids
Sunshine

view

Play time
A high growth
market, expect a shift
from unorganized to
organized (50%
CAGR over FY12
-14E)
With a host of
players crowding the
space we expect to
see scalability in a
dominant player like
Euro Kids and
players using
innovative models
like Kangaroo Kids

Major players in Varanasi KidZee the largest

Largest player at 34% oforganized market and 7% of total market

Market Share
3%
4%
5%

12%

Kidzee
Euro kids

34%

apple kids
shemrock
Caterpillars

12%

Little Millenium
3
30%

Others

Organized preschool market in India

Player

History

Status

Current network

Business model

Key strengths

Started in 2003

Part of Zee
group. Listed
under ETCN
previously. Currently
Listed company by
his own name ZEE
LEARN.

1350+ -pan India.

Franchisee model

Operational
ZeeSchool 40 +
Mou 20 signed
up.Widest foot
print of kidzee
preschool

1997 JV between
Indian Express &
Egmont; 2001 Egmont
International
Holdings,
Denmark bought
back
shares of Indian
Express in JV;
Egmont
exited Euro Kids,
now
an Indian private co.

Private
(50% stake
acquired by
Educomp)

484-pan India.
Plans to have
1000+ schools in
next 3 yrs

50% publishing,
50%
preschools
(Franchisee model)

Plans to have
K12 schools

Private

200 primarily in
South
India

Franchisee model

-Largest in south
india

Private

525+ - primarily in
North India

Franchisee model

3,00,000+
Alumni ,Strong

Started in 1989

Organized preschool market

Started in 1993

Private

100 + expanding
pan India

JV model. Niche
player expanding
to a basic model
through
'Brainworks' and
mall schools
through
'Kangaplay'

Strong brand in
western urban
areas. Opting for a
mix of pure
franchisee and JV
model for better
economics, quality
control &
attrition. Ready to
access Billabong
High schools; 6
operational

Started in 2003

Private

55 - primarily in
Maharastra..340 +
in india currently

Primarily owned
model

High operating
margins due to
accounting for
nominal lease
(promoter owns
property) & ability
to compete on a
price war

Started in 2003

Listed under
Educomp

Plans to target 500

centers by end-

Franchisee model

8am to 8pm includes day care

Franchisee Model

Preschools have a limited target area maximum of 2km radius

Any preschool, however strong the brand, ideally has a customer pull within a 2km radius
(parents prefer to send toddlers within a limited radius for safety/ comfort reasons).
The segment caters only to customers who can afford annual fees of Rs20,000-45,000,
which further limits the scope of the market.

Tail wags the dog rental costs!

Preschools are currently being run primarily on the franchisee model, which has so far
evolved largely on the back of two factors1.low cost of setting up a franchisee,
2.housewife occupation that typically does not consider the opportunity cost of lease
rentals (schools are being set up on existing premises which otherwise also do not generate
returns).

Economics of a preschool
franchisee has to pay a brand/franchisee fee (Rs60,000-5,00,000pa)

some part of the revenues to the franchisor (~20% of total) in lieu of using the latters brand
name and for the handholding required to run a preschool.

Except for a few preschool chains (Kangaroo Kids going in for JVs with developers and
Tree House with largely owned schools),
Assumptions:
have assumed a model premise of 1200 sq. ft with rent at Rs70 per sq.ft.
Only 60% of the total area can be used for classrooms and a minimum of 10-15 sq.ft per student
is considered optimal.

The one-time capex broadly comprises furniture and fittings cost and excludes brand fee
(we have assumed an average franchisee fee of Rs2,00,000, which is renewable every three
years and amortized over a period of three years).

We have assumed three classes and two batches a day, which translates into a maximum
capacity of 20 students per class (thereby a maximum of 120 students per preschool) and an
annual fee of Rs25,000.

Findings

FINDINGS

The admissions in pre schools are increasing every year

with over 30% each year for last 2-3 Years.
The structure of fees in these schools are almost identical
to each other they have maintained a same kind of fee
structure among them, this is to create a perfect market
competition.
It was found that , if one leave its preschool in the middle
can continue from same in other city of same pre school
they have nationwide same structure of curriculum..
The pre schools have various methods of teaching the
kidzee follows a interactive iLLume a one of its kind for
teaching the childrens in such schools.

Conclusion

With the growing competition in the world

to train the kids for future , pre schools
are necessary as they target the overall
development of child at such age. The
pre school in India will become a
necessity in coming years so it is
important for all the players
participating in it to keep track of this on
regular basis

Limitations

The scope for the study was limited.

Through questionnaire forms, all the
information was collected that may not
be correct or their right answers.
The people were not aware with the pre
schools.

SWOT ANALYSIS
STENGTH

WEAKNESS

OPPORTUNITIES

THREATS

It is the largest
pre school chain
in Asia , having
more experience
in this field and
most number of
schools
comparing with
its competitors.

Kidzee has not

been able to
promote itself
among the
parents in this
region as during
the survey it is
found that lot of
people are not
aware of pre
schools , even
though having
good
infrastructure
services wont
help if people
dont know
about it.

There is still lot of

market is
available which is
yet to be tapped,
expending it to
rural areas at
least 1 school
their might help.

There are lot of

competitors
who are trying
to offer the
same services
on less cost ,
price is
something that
indian parent
keeps in mind
so kidzee
needs to sort
and work on
new plans

REFERENCE

JOURNALS
WIKI
COMPANY WEBSITE
BLOGS
AMONG OTHERS

THANK YOU