How Test Prepartion is Growing in India
Given the high population of India, and the severe mismatch in terms of jobs, colleges, institutions vs students/aspirants, the test preparation industry in the country is a very vibrant one. Millions of aspirants every year appear for ~ competitive exam that have a pass rate of less than ~%.
Test preparation industry is driven by the high number of competitive exams across the country and the presence of competitive exams from school life, to college and professional life for any individual in the country.
The demand for test preparation has been stimulated by the increasing internet penetration in Tier-2 and Tier-3 cities in the country. People living in these cities, form a major part of the audience for test preparation courses. They relocate to other cities and stay in rented accommodations, only to prepare for competitive exams through coaching centers, which are based in metros. The lack of quality test preparation coaching in remote areas of the country is the primary reason behind the burgeoning landscape of the online test preparation industry.
Combining educational expertise with technology, online test preparation companies aim to deliver quality education to people across the country, which don’t have access to quality offline coaching. Their task has been made easier by the ever increasing internet penetration in the country, the pandemic which forced the entire education system in the country to shift online and the change of patterns in major competitive exams from pen and paper to online.
There is no wonder why learners in Tier-2 and Tier-3 cities form the bulk of the user-base for online test preparation platforms. Moreover, the large addressable market scope in rural India and the ability of online platforms to service that market at scale has made the online test preparation segment very lucrative for investors. Online Test Preparation has been the Ed-Tech segment receiving the most funding and growing at the fastest pace in the country.
Segmentation by Type of Course
By Type of Course (Under-Graduate, Post-Graduate and Job-Based Exams)
Under-Graduate segment was identified to be leading segment for test preparation with a high ticket size and a high volume target audience being the primary factors responsible.
Segmentation by Type of Under-Graduate Exam
By Type of Under-Graduate Test Prep (Medical, Engineering, Architecture, Cost Accounting and CA Foundation, SAT, Law and Other UG Entrances)
Medical and Engineering entrance exams were identified to be the leading categories for test preparation in the country owing to the prestige associated with the 2 fields of study and the vast audience appearing for such exams. The high competition for seats is also a key factor behind high revenues for the 2 segments.
Segmentation by Type of Post-Graduate Exam
By Type of Post-Graduate Test Prep (Commerce, Engineering, Management and Others)
Commerce Exams (CA, CFA, CS dominated the space due to highly professional nature of the exams the professions associated with the same. GATE exam is associated with jobs at PSUs and hence enjoys high adoption along with MBA entrance exams (Management).
Segmentation by Type of Post-Graduate Exam
By Type of Job-Based Test Prep (Banking & Insurance, Civil Services, SSC, Railways and Others)
In the Job-based Test Prep segment, Government jobs were identified to be the most traction-gaining segment in terms of revenues. Same can be divided amongst Banking exams, Civil Services exams, SSC exams, Railways exams and other exams including State Government and Defence exams. A large proportion of the audience for such courses is from Tier-2 and Tier-3 regions in the country.
Ecosystem of Test Preparation Service Providers in India
There are close to ~ entities in the Test Preparation industry in India providing test preparation services including live courses, lectures, books, tests, practice questions and mentorship/guidance. The companies providing test preparation services can broadly be divided into Offline and Online entities. While the number of offline entities overpowers the number of online ones, it is the online ones that have been making the most progress in the past 3-4 years. Entities can further be divided basis the test prep courses that they offer with primarily 3 categories emerging: Under-Graduate, Post-Graduate and Job-Based. Offline Centre-based companies generally speicalize in a particular test preparation category, while online players dip their feet in multiple exam categories.
Competition Landscape
The competition structure in the Indian Test Prep market is fragmented amongst the Online & Offline players. Players differentiate themselves category-wise, basis different Test-Prep segments. Major Online players in the UG space include BYJUs, Unacademy, Vedantu, Toppr while major Online players in the Professional + PG segment include Unacademy, Adda247, Gradeup & Testbook. Players generally operate amongst multiple categories in the space with Unacademy, BYJUs, Gradeupetc being key examples of the same. The online test preparation landscape is growing rapidly and holds about ~% share in terms of the overall market revenues.
Future Outlook of Test Preparation in India
The test preparation industry in the country is bound to grow on the back of strong growth in the online test preparation segment, advent of new testing categories due to government interventions and the advancement in technologies allowing scalability of education solutions in the country. The online test preparation industry is expected to grow at pace and start to catch up with the revenues in the offline segment and is expected to hold ~% in the overall revenues of the test preparation industry, by FY 2025. There is also expected to be the development of a scalable hybrid delivery model for test prep solutions, combining the best of online and offline learning delivery.
Key Segments Covered:-
Type of Course (Under-Graduate, Post-Graduate and Job-Based)
Type of Undergraduate Test Prep (Medical, Engineering, Architecture, Cost Accounting and CA Foundation, SAT, Law and Other UG Entrances)
Type of Postgraduate Test Prep (Commerce, Engineering, Management and Others)
Type of Job-Based Test Prep (Banking & Insurance, Civil Services, SSC, Railways and Others)
Test Preparation Companies Covered
BYJU’s
Unacademy
Testbook
Vedantu
Toppr
Gradeup
Oliveboard
Adda 247
Doubtnut
Aakash Educational Services
Key Target Audience:-
Offline Test Preparation Companies
Online Test Preparation Companies
Educational Industry Associations
Ed-Tech Companies
Ministry of Education, India
Venture Capital and Private Equity firms
Time Period Captured in the Report:-
Historical Period: 2015-2020
Forecast Period: 2020-2025
Key Topics Covered in the Report:-
Target Addressable Audience for Test Preparation in India
Division in the Test Preparation Market in India
Decision Making Model for Learners: Test Prep Courses
Learner Preference Trends
Segmental Leaders of Test Prep in India
Test Preparation Investment Landscape
Online Test Prep M&A Landscape
Operating Model Implementation across Indian Online Test Prep Ecosystem
Course Monetization in Indian Online Test Prep Ecosystem
Revenue Streams of Test Prep Players
Product Combination for Online Test Prep Companies
Tech Innovations by Online Test Prep Companies
Marketing Model for Test Prep Players
Business Landscape of Major Test Prep Players
Operating and Financial Landscape of Major Test Prep Players
Category Presence of Major Players
Challenges Faced by Online Test Prep Players including Solutions
COVID Impact on Demand of Test Prep Courses
Emerging Test Prep Trends in the Future
Recommended Market Penetration Strategies
Industry Speak (Interviews with Strategic Leaders across the Industry)
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Ken Research
Ankur Gupta, Head Marketing & Communications
Ankur@kenresearch.com
+91-9015378249
