By 2020, China’s total education market, both offline and online, is expected to reach US$ 500 billion. With a CAGR of 10.8%, it will grow to almost US$ 750 billion by 2025, according to Deloitte. In particular, the future of online education is looking bright, with a UBS report predicting that the e-learning market will grow from US$ 29 billion in 2017 to over US$ 104 billion by 2025.
This strong demand and large growth potential, coupled with the increasing usage and accessibility of new technologies, have led to companies enhancing and powering their existing offerings to further improve and expand their educational capabilities for consumers.
Early online pioneer stays ahead with tech innovation
Started as a not-for-profit educational bulletin board service in 2001, Hujiang has since grown into a leading provider of online courses for languages, test-prep and tuition. In 2018, the company filed an IPO for US$ 500 million on the Hong Kong stock exchange. The company held the top rank for monthly active users (MAUs) in EdTech in China in 2017.
Despite Hujiang’s humble beginnings, the company knows the importance of continual innovation. Its CCTalk online teaching platform, launched in 2016, was a pioneer in two-way video chat and virtual whiteboards. In 2017, the company launched HiTalk, an English conversation platform that uses artificial intelligence for simulated role plays. This allows for adaptive learning, a cutting-edge approach that tailors real-time teaching methods to individual student capabilities.
Other innovations include less visible underlying technologies, such as cloud computing and big data analysis to generate user insights and improve service offerings. With a tech team of over 600, Hujiang clearly places heavy emphasis on technology to stay ahead in the Chinese market.
Gamifying EdTech through acquisitions
Netdragon Websoft, a leading gaming company, is staking its future on online education.
Known for its online games and entertainment platforms, Netdragon has been building capacity through acquisitions of EdTech companies such as education hardware firm Promethean for US$130 million and education social networking company Edmodo for US$137.5 million, expanding its online communities through educational games provider Jumpstart, as well as making investments in augmented reality and virtual reality technologies.
Netdragon pivoted to online education in 2010, with the establishment of a subsidiary Huayu Education, whose main product is a teaching platform with animations and other interactive resources. Ongoing plans include the Binhai Education Village, a 400-hectare research campus slated to become a potential hub and incubator for Netdragon’s portfolio of EdTech companies.
The transition has not been easy - profits from core gaming products have been funding losses in education products for the past 3 years. However, Netdragon is taking a long-term view and seems bullish on the online education sector.
Looking further into the future, if EdTech companies can integrate online teaching services with offline supervision and tutoring, or successfully use big data or AI to oversee the entire learning process, then there will be even greater potential for future market development.
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