Advancing Penetration of Online Test-Prep Solutions to Tier-2 & Tier-3 cities in the country, helping expand the reach of Test Preparation industry in India: Ken Research

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In a landmark deal in the Indian Ed-Tech landscape, online education incumbent BYJU’s bought out offline test preparation behemoth Aakash Educational Services in a Cash + Stock Deal.

The Education Ministry in India recently gave ascent to the New Education policy set to be introduced to revamp the country’s education system. The policy will act as a strong fillip to the test preparation industry, introducing additional categories of exams at different stages of a student’s educational and professional journey.

The pandemic impacted activity across the ed-tech sector in the country, acting as a big boon to user adoption and growth within the industry. Ed-Tech companies across education segments witnessed strong growth in user activity levels, user conversions and revenues.

Investor Interest in the Test Preparation Space: The test preparation industry in India, saw some of the highest level of funding received in the Ed-Tech industry over the period of 2014-2020 with investors pouring in excess of USD 2.0 billion into early-stage and mid-funding stage startups in the space. Online test preparation companies attracted the majority of funds.

Adoption from Tier-2 and Tier-3 Cities: Online test preparation companies have played a key role in bridging the gap between students in metro cities, who have access to top teachers and offline training institutes and students in Tier-2 and Tier-3 regions in the country, having no access to top coaching brands. The same has been possible due to increased marketing towards such audience, the vastly expanding reach of internet and affordable plans launched by online test preparation companies.

Dominance of Live Training/Coaching: Students have been understood to prefer coaching delivered live to them be it in classrooms or virtually, accessible through mobile/laptop/PC. In fact, students have been willing to pay extra than what they pay for recorded video-based courses, in order to access live lecture-based coaching. The same can be attributed to better doubt solving in the live version and better student engagement in live learning.

Analysts at Ken Research in their latest publication “India Test Preparation Outlook to 2025 By Type of Course (Under-Graduate, Post-Graduate and Job-Based), By Type of Undergraduate Test Prep (Medical, Engineering, Architecture, Cost Accounting and CA Foundation, SAT, Law and Other UG Entrances), By Type of Postgraduate Test Prep (Commerce, Engineering, Management and Others) and By Job-Based Test Prep (Banking & Insurance, Civil Services, SSC, Railways and Others)” observed that the test preparation industry is an extremely lucrative education segment in terms of investor interest and long term demand. The online segment of the test preparation industry in the country is the key driver behind growth in the test preparation industry in the country and technology growth makes online test prep as the fastest growing ed-tech segment in the country. Test prep market revenues registered a growth of 9.1% in terms of CAGR over the period 2015-2020, while online segment of the industry registered a growth of 57.4% during the same period.

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