Aakash Chaudhry is in a dilemma. His 30-year-old coaching institute needs a revamp. But there’s no roadmap for what he needs to do.
We’re sitting across a giant U-shaped table from Chaudhry, at the headquarters of Aakash Education Services Limited (AESL) in Delhi. As Chaudhry, the company’s chief executive officer, walks us through a presentation on the company’s growth plans, his stoic expression cracks as he says, “It’s such a complex time. I’m taking new decisions everyday without really knowing how they’ll pan out.”
It’s an odd predicament for AESL—one of India’s leading exam coaching chains. But as a digital wave sweeps through the coaching space, many legacy players have been caught unawares. Where decades-old chains like FIITJEE, Allen, and Aakash once stood topmost in the minds of the India’s students, younger, online-only players like Vedantu and Unacademy are now the talk of the town.
Unsurprisingly, one decision features prominently in Chaudhry’s presentation—the intention to take the brick-and-mortar business digital. It’s a bold move, especially when rival coaching firms—Allen, Resonance Eduventures and FIITJEE—are yet to establish a significant digital footprint, despite running “digital learning programmes” for the last few years.
Clearly, Aakash—the man and the institute—are in uncharted waters.
AESL’s shift to digital isn’t just an inevitability. In the larger context of the offline test-prep market, it’s a calculated survival strategy: stay relevant.
And it’s aware that a storm is brewing. Traditional coaching businesses are staring directly in the face of a slowdown. Owners of coaching businesses that The Ken spoke with confirm that enrollments for engineering prep courses are dipping year-on-year, with growth in metros slowing. According to the All India Survey on Higher Education, the number of students enrolled in undergraduate engineering courses has declined by 11% since 2014-15, while those pursuing Master’s have more than halved. The online test prep market, meanwhile, is expected to reach $515 million by 2021, growing at a CAGR of 64%, according to a KPMG and Google report.
With this sort of imperative weighing heavy, Chaudhry is setting lofty goals. “We want digital to be 25% of our total revenue in the next four years,” he says, a marked increase from the 3% it currently stands at. AESL’s revenues for the financial year ending 31st March 2018 stood at Rs 980 crore ($138 million), with a profit of Rs 162 crore ($22 million).Its revenues went up by 34% from a year before, while its profit shot up sharply by 165%.