China’s Potential $100bn Online Education Market Gives Food for Thought

China Online Education Market Opportunity

A research report by UBS Securities this month showed how the online education industry in China could reach over $100 billion (over 700 billion yuan) by 2025.

According to the report, this boom will happen thanks to advances in technology, such as artificial intelligence and virtual reality, as well as wider adoption of the online approach by parents.

What I found particularly interesting about the report is how relatively small the current online education market is in China.

The national market for tutoring is currently worth about 580 billion yuan (about $85 billion), which is a huge industry and much larger than I would have imagined.

However, the online market only counted for 29 billion yuan (over $4 billion). Across all internet sectors, education was the industry with the lowest penetration rate.

One of the factors that has discouraged parents from opting for online tutoring/education is the belief that it won’t get the same performance out of their children. In a classroom environment, they expect the child’s focus to be higher.

This means, they prefer to take the traditional route of paying for one-to-one tutoring in person, despite online education offering lower prices and more convenience.

UBS expects an annual growth rate of 18%, as parents start to see more benefits with online education as advances in technology take place.

This report highlighted a few important points for me. Obviously the first thing is how huge the online education market is and could be, but how relatively untapped it has been so far. Although China seems to be lagging behind in that respect, other developed countries still haven’t achieved high adoption rates either.

Secondly, it made me consider something I hadn’t really focused on so far, which is how important it is to consider the cultural differences in the approach to education.

China is obviously a nation that embraces the idea of extra-curricular tutoring and further education outside the classroom. Much more than in the UK or the US, where we currently have a strong focus.

But at the same time as these cultural differences being a potential opportunity, it can also mean changes are required in the education model. A different approach may be required for someone from China than for someone in England, other than simply translating the course material.

Additionally, perhaps there is something to learn from the Chinese model of tutoring that can be adopted to improve the standards of tutoring and online education for other markets as well. This would be a very exciting potential development.

This is all food for thought for the team and me. It’s the ideal time for us to consider these sort of challenges, as we continue to build our library of online content and learn from the process, to improve future course releases.

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