Coaching Centers Approaching The Govt Against EdTech Firms!

EdTech companies can now explore several markets to grow and scale their businesses. As a result, they’ve been introducing new products, hiring more teachers, and increasing their customer base. Although they consider this anti-competitive, coaching centers may contact the PMO and ministries. But why? Let’s find out. 

This blog explores what has led coaching centers to reach out to authorities. 

What Did EdTech Companies Do?

The pandemic spurred the adoption of technology in the educational field. However, the EdTech sector started looking for ways to explore and grow once the pandemic slowed down and coaching centers opened and offered programs offline.

To expand their potential user base, EdTech companies entered related markets. Most companies wanted to transform themselves by switching to a hybrid model. Some began working together with local coaching centers.

“We are launching new products where we need to hire more people, both in sales and product. In certain places, we are also trying to bring in more companies via mergers and acquisitions,” Mayank Kumar, Co-Founder and Managing Director of upGrad said.

Many EdTech firms are now hiring well-known and experienced teachers, mainly from local coaching centers. There is a considerable demand for teachers who have 10 to 15 years of expertise assisting students in clearing competitive exams. These firms offered increased remuneration to the teachers from coaching centers. A select handful even offers to pay the salaries for three years upfront.

A few EdTech companies began focusing on coaching center students, particularly those from Tier-2 cities. Last month, Unacademy ran adverts in many Rajasthan-based newspapers promoting a 95 percent discount for students signing up for IIT JEE and NEET UG courses at its Kota campuses. 

Why Are Coaching Centers Fuming?

In many cities such as Kota, Delhi, and Hyderabad, there is a rush for experienced teachers as EdTech companies aim to take a piece of the offline coaching market. Coaching centers worry that losing their key teachers could result in a mass exodus of students since they are so well-liked. They stress that students will follow once EdTech companies hire their best teachers.

For instance, the EdTech company Unacademy is increasing the salaries of Kota-based teachers and even providing advance payments to hire them. 

In addition, in the abovementioned Unacademy advert, the catch was that only students enrolled with other coaching centers would receive the discount, per the advert’s terms and conditions. The top teachers at these coaching centers have left. So, if a student who has already paid an annual fee of INR 1 lakh or more to a rival coaching center wants to switch to Unacademy, the student will only have to pay INR 5,000 to study there. 

In June, a video clip by Brajesh Maheshwari, Director, and Co-Founder of Allen Career Institute, brought this issue to light. Maheshwari had warned his teachers that joining other organizations could result in them being blacklisted. "When teachers leave in the middle of the session, this leaves students in a state of confusion and turmoil. These young minds come to us from all corners of the country, leaving their families behind," said Naveen Maheshwari, Director of Allen Career Institute.

What Is Their Course of Action?

Several top coaching institutes and hybrid education centers in India are preparing to approach the Prime Minister's Office (PMO) in opposition to the EdTech startups. The conflict between coaching centers and EdTech companies may intensify.

Given recent forays by EdTech giants like BYJU'S and Unacademy into the offline education sector, the coaching centers are currently drafting a communication addressed to Prime Minister Narendra Modi and several other ministries advocating for significant reforms in the education policy. They argue that a rule or guideline should be in place that oversees the market for private tutoring rather than engaging in a lengthy lawsuit with EdTech businesses.

These coaching facilities claimed that EdTech businesses were abusing India's competition laws and engaging in unethical marketing and promotion activities. It involved luring away teachers and students with a steep wage increase and hugely discounted courses.

In another development, Allen petitioned the Jaipur Commercial Court under Section 9 of the Arbitration and Conciliation Act against 20 of its former teachers. These teachers had joined offline centers established by EdTech startups, primarily Unacademy. Recently, Unacademy hired many teachers who had in the past contributed significantly to Allen's growth.

Wrapping Up

EdTech companies are now seeking new markets to extend their services and scale up. They are hiring well-known and knowledgeable teachers with ample expertise from coaching institutes. 

Hence, coaching centers are losing not only their top teachers but are also afraid that their students will follow these teachers. It is affecting their reputation as well as growth. Thus, they may approach the PMO and ministries in retribution against EdTech companies. 

Without a doubt, the ongoing battle may heat up in the coming days. Unfortunately, this is not the only point of worry for leading EdTech companies. Some of them have also been accused of mis-selling courses. The question is: Will the EdTech sector rise again amidst all the accusations?