Kindergarten business is no longer child's play

NEW DELHI: The aunty-next-door, who painted her courtyard walls red-and-blue and hung a kindergarten sign outside the gate, is in for a grim lesson in business
management.
Home-grown business houses as well as international education chains are here to stake a claim in a business that is mostly low on investment, high on returns, promises strong double-digit growth and needs no commitment to results.The kindergarten business is no longer child’s play.
Last week, the UK-based Modern Montessori International (MMI) announced a 51:49 joint venture with the Ravi Jaipuria group. The initial investment planned: no less than Rs 200-crore in the first five years. The growth plan: 14 branches in two years, a franchisee in place by 2005 and then add 20 schools every year.
The growth potential in India? Says T Chandroo, managing director, MMI Singapore: “We are very excited about the India market. There are about 15-20 million babies born every year. Even if we give up 99 per cent of that and go for only 1 per cent of the market, that is good enough for us.�
The play-school business had anyway been burgeoning literally in every nook and crany. Egmont Imagination, a 100 per cent subsidiary of Egmont Denmark, a media and entertainment company, which launched its Euro Kids chain of play schools two years ago, did some revealing market survey around that time.
Says Prajot Rajan, India coordinator: ‘‘A small portion of Andheri West, a Mumbai suburb, alone had 80 play schools.’’
Egmont, which entered India to promote its publishing business five years ago and does not run kindergartens anywhere else in the world, soon plunged into the play-school business. In two years, Euro Kids has become the largest play-school chain with 142 branches in territories that include Jharkhand, and Uttar Pradesh. Its plans: To have 300 branches by 2005.
With new-age entrepreneurs are coming new techniques. There are talks of training the teachers (MMI talks of 240 hours of training followed by two weeks of overseas training), having standardised ambience (each Euro Kids school with 1500-2000 sq ft area is supposed to look the same), R&D team to make new teaching aids and having experts including psychologists on the panel. To spread the word around, advertising is a big spend area for these schools.
And then there are the home-grown chains like Mother’s Pride and Shamrock. They are growing at a steady clip too. Shamrock has built up 45 branches since it started over a decade back.
Mother’s Pride has three owned schools with 1,700 children. Sudha Gupta, who started Mother’s Pride seven years ago after reading books on child education says: ‘‘It is a high margin business, especially good for educated ladies with a desire to have a good standing in society.’’
Any threats from new entrants? Gupta says there are enough children to go around.
True, the business is big and growing. Driving the growth are several social factors: the increasing number of double-income-single-child nuclear families that want the child to interact with his age group, working parents who do not have ample time for the child, the fear of losing out on the rat race, the desire to have a‘‘smart’’ kid and most importantly perhaps, to prepare the child for admission to the main school. Interestingly, this is precisely what no play-school promises. But then, that’s another story.