China’s EdTech industry is in an exciting expansion phase. 2018 saw intensive investment activity, where Chinese EdTech companies snapped up 44.1% of the global total of US$ 16.34 billion in EdTech investments. Out of the 12 companies that raised over US$ 200 million, 11 are based in China.Educational robot company UBTECH Robotics raised US$ 820 million, online tutoring company VIPKID raised US$ 500 million, and ‘homework helper’ tuition platform Zuoyebang raised US$ 850 million over two rounds in 2018.
The Chinese education market is clearly going strong. What are some opportunities and challenges? Here are our predictions for the upcoming years:
1. The online learning market will grow
We will see a rise of integrated platforms, as parents want holistic services that include supervised progress, feedback and interaction for their children, and not only lecturing.
Technology will also progress. First-generation online platforms were mostly live-streaming; to remain competitive, EdTech companies will likely incorporate AI to adapt material to individual students, and use AR as a visual teaching tool. While first-tier coastal cities are early adopters of online education tools, second and third-tier cities will catch up. Technology will help level the playing field between urban areas.
Ultimately, the largest driver of online learning will be parents who demand extra after-school tutoring for their children to remain competitive.
2. English language learning goes online
China has the world’s largest population of English learners (almost 400 million learners). Since the eighties, there has been a boom in English language schools.
However, compared to academic subjects like mathematics, languages have seen slower development in EdTech course offerings. The main reason is a need for real-time teacher-student interaction and conversation, making English teaching more difficult to scale.
Innovative companies are now bridging the gap by bringing English learning online, using video live streaming to match Chinese students one-on-one to qualified native speaking teachers located in the US and elsewhere.
Cheaper, and with more convenient access to better teachers, online English learning will become the default style of language learning. The most innovative companies may also apply big data and AI to their service offerings.
3. Early-childhood education consumption gets an upgrade
With the implementation of the 2-child policy and rising living standards, the demand for early-childhood education is estimated to be US$ 119 billion by 2020.
Alongside a growing trend of educating children young, modern urban parents have more sophisticated requirements. Consequently, they spend more money and get more involved than previous generations. Thus, content providers that focus on parents, such as storytelling services company Kaishustory and mom user-generated content platform 7mtt, have obtained investment because of intense parental interest in learning tools for their children.
Kindergartens are also upgrading, with collaboration apps that enable instant communication between teachers and parents, and give parents access to classroom activities, parenting plans and other useful content.
While not yet profitable, these tools encourage daily user activity, and may expand into paid content, related product lines, e-commerce and social platforms.
4. Government support for education technology ramps up
To develop innovation and entrepreneurship in schools, the Chinese Ministry of Education has strongly supported STEAM (Science, Technology, Engineering, the Arts and Mathematics) education, through various policies and funding that include robotics education, labs and maker spaces, multi-media facilities and other infrastructure.
The government has also supported “smart campus”, or a smart learning environment where basic operational education technologies like IoT, cloud computing and big data are used to improve school management, educational research and teaching quality, as well as other services like information security, course scheduling, electronic class cards and attendance systems.
What this means is that EdTech companies in these areas are primed to collaborate with public schools, who will need educational content as well as hardware and operations technologies to meet government requirements.
China may very well be the next frontier for education technology. A large population and lack of restriction on data collection make it an ideal place to pilot new education solutions. Technologies likely to take off are high-growth, immersive technologies that support a multidisciplinary, interactive approach and makes learning fun and engaging.
Top of the list are Augmented Reality (AR) and Virtual Reality (VR), which improve learning through dynamic 3D modeling and visualisation. AR merges the physical and digital realms, and does so without any additional hardware. As the number of AR-compatible smartphones increases, more AR education apps will be developed, with adoption likely both inside and outside the classroom. While VR requires special headsets, these devices are likely to become increasingly accessible and affordable with private sector investment and significant government funding to develop VR in schools.
Artificial Intelligence (AI) has many applications, but will likely be used in adaptive learning, where a remote instructor may use facial recognition software to interpret a student’s expressions and customise curriculum accordingly.
Taken together, these trends show a robust EdTech market with no signs of slowing down. For parents, schools, companies and investors, it is a revolutionary time. Will China surpass the US in EdTech investment? Will Chinese companies conquer their fragmented domestic market? Will parents adopt paradigm-shifting new technologies that change education forever?
Let’s see what happens!
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