Coaching business limps back to normal

After an unprecedented slump due to the absence of students, Old Rajender Nagar and Mukherjee Nagar are hoping to see status quo ante by April. But the online option may cut into their profits

Ghosted roads, empty libraries, low footfall in restaurants and closed  coaching institutes are the scenes at old Rajendra Nagar and Mukherjee Nagar areas. Here, during normal times, students aspiring for government jobs come to realise their dreams of landing prestigious jobs in various departments of government.

The global pandemic has disrupted everything here, where the economy driven by dreams of students has been hit hard. Anil Chawla, a property broker who has a lavish office on the main road, near Aggarwal Sweets in Karol Bagh, told Patriot that their business has shrunk to half its former size. “Covid-19 was unprecedented. Our business was mainly driven by students and students started to go home a month after the lockdown was announced. Our business started to shrink upto 50% but we are hoping that it will get back to normal with time.” 

Most landlords say room rent in these areas came down 30-40%. A normal room with a bathroom attached earlier cost Rs 10,000-15,000. Now many of these rooms are available for rent under Rs 9,000. Offline coaching institutes are totally shut; whatever is functioning — is through online mode. For coaching institutes which have some online infrastructure in place like Vision IAS, it’s business as usual.

However, Vajiram and Ravi, a coaching institute that fully functions in offline mode and is considered as a giant among coaching institutes that help students prepare for IAS (Indian Administrative Service) exam couldn’t start its operation since March. Its officials told us that “they are waiting for government notification.” 

In fact, it was Vajiram and Ravi, a pioneer coaching institute, which transformed the area when it was set up in 1996 in Old Rajendra Nagar. Before Covid -19, the rush among students to take admission in this institute was so much that their seats usually got filled whenever a new batch was announced.


However, despite all this, offline coaching giants are hopeful for the future, as they believe that whatever the circumstances, students will eventually prefer offline mode when the vaccination process finishes and immunity to this virus kicks in. 

Srirangam Sriram, the founder of Sriram’s IAS says, “When lockdown was announced on 24 March, the idea of offline coaching was ruled out completely. So, we had to start our operations online with the month of July. As the vaccination drive is on, by April everything will be normal.”

He further adds, “Erosion is around 50-55% in the business. But in India, online is only when you have no other choice at all. Students want to sit inside the classroom, listen to teachers, have eye contact with them, ask questions during class and after the class. That has been the routine so far.”

Aside from online and offline coaching institutes, the Covid lockdown offered an opportunity to Edtech startups to start tapping this market. In December, after a funding round led by US based firms Tiger Global and Dragoneer Bengaluru-based edtech startup Unacademy saw its valuation touch $2 billion. Just two months before, its valuation was $1.45 billion.

 Similarly, Byju’s has doubled its valuation in 2020 from $6 billion  in 2019. Although data for the current financial year is yet to come, the company, as per various reports, claims that it has grown enormously.

Not just these two, other Edtechs like Testbook, that prepare students for government jobs like SSC and banking, claim that they also have grown enormously. Ashutosh Kumar, founder of claims lockdown proved to be a curse for coaching institutes functioning in offline mode, As he points out, “Coachings are still in bad shape. They are still not allowed to operate with full capacity.”

“During the lockdown, the entire student community shifted digitally which brought a big behavioural change from offline first to online first learning. Most of the coaching centres have realized this fact and are trying their best to shift to online learning. But coming from non- technology backgrounds, it would be a tough journey for them.”

As lockdown forced coaching centres to shift to a new business model that is blending offline and online, Kumar adds, “This shift will root out the poor and mediocre coaching centres.”

On their part, coaching institutes are not worried about the adverse impact of the rise of Edtech start-ups on the business of offline coaching. Sriram says, “Students don’t want to go online because coaching in general declined. Many postponed their plan to appear for the exam — those who were planning to appear for 2021 did not appear, instead planning to appear for 2022.”

He adds, “Unacademy is shooting in the dark, it is in the marketplace. Anyone can teach on its app. While IAS and UPSC exams are not like that. Students take 10-month systematic coaching because nobody wants to take a risk.” 

“And Byju’s is for kids. So, they are not in the competition.”

Since the lockdown, the areas where coaching institutes were located have become ghosted. Many students went back home. Those who stayed back say students are coming back slowly.

Vishal Raj, an IIT-ian and an IAS aspirant from Bihar who stayed here all through lockdown told Patriot, “Students are coming back slowly.” Their going home had impacted the local economy. “From the earning of the person who presses our clothes, to landlords, vegetable shops, restaurants, sweet shops, book shops–everything was affected.”

Ashok Kumar, who runs a photostat shop says, “In the initial days of lockdown, our business was affected almost 80-90%. We were facing trouble paying rent, Now we are slowly getting back on track. But business has not fully recovered.”

Raj adds, “I have seen many tiffin services, libraries getting shut during lockdown. The economy here is 70% dependent on students”

Arvind, a e-rickshaw driver says, “From march, the lively atmosphere that we used to see, is missing. We never had to wait at the Metro station for more than half an hour for riders but now the wait has increased. Our business has been badly affected.”

(Cover: A book store in Rajendra Nagar // Credit: Mayank Jain)


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