China’s education market is large and rapidly growing. It’s total education and e-learning markets are expected to reach almost US$ 750 billion according to Deloitte and US$ 104 billion according to UBS by 2025 respectively. Well-off Chinese parents in tier-1 cities are currently forking out between US$ 400,000 to US$ 600,000 for the entire education journey of one child, and this amounts to more than double the spending of similar households in other emerging countries.

What drives this trend is a generation of parents with a strong appetite for after-school tuition in a hyper-competitive school system. Other supporting factors include government policies, technological progress and a deep cultural emphasis on education.


Source: GIFER

Besides strong demand, China also has huge potential to scale. So far, the adoption of online learning has taken place in big cities, leaving the vast hinterland relatively untouched. China also has an unsaturated tuition market with low penetration- only 37% of Chinese parents paid for tuition compared with 70% in Japan and South Korea.

Companies and savvy entrepreneurs have taken notice. Recent years have seen an explosion of online platforms and services centering on private digital education for school-age children (K12 education). Here are some notable examples.

Big offline players going online

China’s top two private education players, TAL Education Group and New Oriental Education & Technology Group are traditional brick and mortar tuition giants listed on Nasdaq. Collectively, they have invested in more than 100 EdTech companies focusing on online tutoring platforms and social apps.  


While their platforms currently only use live video streaming to support an online-offline dual-teacher model (one teacher lectures via live broadcasting and another supervises students in physical classrooms), analysts predict that AI will be used in future. Customers have responded positively. Already, the online subsidiary of TAL, Xueersi Online School, showed revenue growth of 158% in 2018.

As established market leaders, these behemoths have the brand name, marketing muscle, and existing sales channels to upgrade their traditional offering.


Connecting supply and demand for English tuition

English is the most popular foreign language in China, with an estimated 400 million learners and growing. However, foreign languages are best learnt from native speakers one-on-one, but such teachers are only available in major cities at a premium price point. Enter the innovators, who meet the demand through live streaming platforms that connect children in China to native teachers elsewhere.

The current darling of the EdTech scene, VIPKid, raised US$ 500 million in a Series D round in 2018, the world’s largest-ever fundraising in the online education sector. With a valuation of over RMB 20 billion, the company is the largest online education company globally. Currently, its network has more than 60,000 foreign teachers, and over 500,000 paid users. VIPKid is not alone. Other major players in the English tuition space include DadaABC, 51Talk and iTutorGroup.


China’s digital education market is huge, but still relatively untapped and fragmented, with a low penetration rate compared to other sectors. One reason may be that parents still expect children to focus better in a traditional classroom environment. However, attitudes are fast changing, as technology advances and online education becomes cheaper, better and more convenient.

Furthermore, this demand will only grow; China expects a demographic increase in kids due to the 2-child policy implemented in 2016. And as any tiger mum will say, to be well-educated and gain skills for the future, you have to start them young.



Source: GIFER

Listen to the tiger mums and get down to work now with ZomWork as we expand to China! If you are a business representative interested in one-on-one EdTech industry insights and updates related to Asia, kindly fill up our form and a ZomWork cross-border consultant will be in touch very soon.

This article was contributed by a ZomWork copywriter and edited by ZomWork. Visit our marketplace to browse portfolios of more Talents.

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Topics: Business in China, Cross-border, Regional Expansion, EdTech

Grace Goh

Written by Grace Goh

A ZomWork copywriter, visit our marketplace to browse portfolios of more Talents now!