A Glimpse on China’s Online Education

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Chinese tech people are not missing out on the online education revolution. Over 100 online education startups have emerged. It’s a business easier to justify than those such as group-buying: in such a big country where quality education resources are concentrated in bigger cities, well-recognized teachers or for-profit schools can reach more students and make more profits through the Internet.

Some existing educational organizations or online services have tasted the sweetness. New Oriental Education’s online business, Koolearn which was founded ten years ago, has its revenues increased 50% for the six consecutive years, and the margin, at the same time, are higher than that of offline classes, according to its CEO (article in Chinese). Hujiang, a language-learning site founded in 2001, claims it has made 100mn yuan ($16mn) in revenue this year from 15mn registered users (source in Chinese).

Different from other copy-to-China businesses, most online education services, though there still are MOOC-like or Shareskill-style ones, are in very Chinese ways, 1) most online classes are for pre-exam training, 2) teacher is the key resource to attract users, 3) most founders are from tech background, not education background, 4) most courses are not for free.

Examination-oriented & Teacher-centric

Almost all well-known private schools in China, such as New Oriental Education, have been focusing on pre-exam training and language learning. That doesn’t change for online education and is expected to be so for a long time. And in the whole education system teachers are absolutely respected by the mainstream society. They want teachers to help their kids get high scores in exams.

Laoshiteacher in Chinese, is a platform for students and teachers to reach deals. The website holds the tuition paid by students till the end of all classes, and will refund the remain fees if a student isn’t satisfied with classes that have taken. Students will get cash rewards by rating or reviewing teachers after all classes.

Fenbi, chalk in Chinese, is “an interaction platform between professional training teachers and learners” as it describes itself. It takes the micro-blogging format that students can follow teachers/schools, reading notes/materials they post as timeline feeds, access learning materials uploaded by teachers/schools, or taking part in Q&As. The platform covers all kinds of exams a Chinese’d probably come across in a lifetime. Founded by Li Yong, former editor-in-chief of Netease news service, and his colleagues. It raised A round of funding, 10mn Yuan, from IDG, saying they won’t be worried about monetization in two years.

Few founders with education background

Most founders are from tech scene, engineers or tech media people. The rest with education background are from primary/middle schools where teachers are motivated as they have been paid for out-of-school classes when preparing examinations.

It’s hard to imagine that professionals from higher education system in China would build an online service like Coursera or anyone could come up with online classes so attractive as Khan Academy’s. So far I haven’t heard about any professor or university teachers opening online classes.

Different from building up a social network or group-buying site that what you need to do is attracting as many users/merchants to join in, the key for an online education service is content, well-organized classes. There has been technically well-supported sites that can enable all kinds of online educational activities but few offers professionally organized classes.

Taobao

Yes, Taobao is everything. Some people managed to making a good living by selling self-made teaching videos there. They don’t necessarily be teachers, or it can be on a part-time basis.

Educational organizations also set up stores on Taobao’s Tmall. New Oriental School and Hujiang Online School, among other services, even took part in the November 11th marketing event this year — the first time for educational organizations, offering online classes at half the prices. The total transactions on education reached 200mn yuan ($32mn) on that day, according to data released by Taobao (source in Chinese).

YY Education

With its virtual currency, users can access online classes on YY Education through YY software. YY wants to make the education business, launched in June 2011, as successful as YY Music in terms of popularity and revenue. But so far it hasn’t shown how different it is from other online education startups.

The education market in China has been changing since brick-and-mortar private schools emerged. The newcomer parents, who grew up after the Cultural Revolution and during the economic reform, hate the existing education system and are willing to pay a big percentage of family savings for kids to get a good education. But it pretty much depends on how they and their children define high-quality education. To them, better education may mean studying in a Western advanced country or obtaining professional certifications, thus the education market will still be exam-driven and about language-learning. For startups who previously have little access to educational resources, to survive, they have to figure out where to get the right content that will be accepted by audiences. If you wonder whether the online education trend would change China’s education system? Well, there must be a long long way to go.