Nov, 2012     

Commercial Due Diligence in Offline Supplemental Education Market in T1 and T2 cities


With the growing demand and competition in the education industry, there are multiple offline courses or tuition classes that have emerged to coach school going kids after school hours. To keep kids on par with the growing competition, parents have started sending their kids to tuition classes to groom their knowledge. Parents feel that a one-on-one informal transfer of education helps retain the knowledge and understand it better. This document is a case study that highlights how we assessed the performance and growth of the supplemental education market for a PE firm looking to invest in a supplemental education player.

The objective of the study was to determine the current size of class 1 to 8 tuition going student market in T1 & T2 cities. Also, the quality, the availability, and the involvement of the local tutors was needed to be determined. The knowledge gaining ability of a kid through a private tutor was needed to be determined and the operational and financial metrics of the tuitions needed to be noted and collated with the e-courses. And most importantly, the needs and decision-making criteria of the parents had to be perceived and understood.

To understand the above factors, a dedicated group of analysts were assigned for performing the study. 50+ tutor interviews and 100+ parent interviews were conducted across two cities: Bangalore and Kanpur. Also, 50+ student interviews were conducted across these cities to understand the student sentiment. Our team conducted primary interviews with Industry experts and did secondary research using online Free/Paid services, Redseer Database, etc. Analysis of the responses was done at various levels and forms considering all the possibilities and opinions.

The study output helped the client to understand the market potential of offline supplemental education for class 1 to 8 in T1 & T2 cities. It also gave the client an idea to take up an investment decision in offline supplemental education for 1 to 8 class in T1 & T2 cities.