Say it once again: China’s education market is huge and is moving online. While local startups are building online education services by modeling western ones or improving the must-criticized existing education system in China (they have raised so much money in the past half a year alone), local Internet giants are building platforms to accommodate all of them.
Alibaba — Taobao Classmates
Tabao’s ultimate goal is to have every business to sell products, physical or virtual, on its online marketplace. Nobody would feel surprised at the launch of a marketplace for selling online courses or offline events recently but wonder what took it so long.
It is reported that the sales of education-related products on Taobao before the launch of Taobao Classmates was one billion yuan (about $160 mn) in the first half of 2013.
Different from other Taobao markets, Taobao Classmates enables video playback and live streaming. As setting up and operating a Classmates store is in the same way with that for all other Taobao stores, it’s safe to say Taobao wouldn’t directly charge store owners. Nevertheless, Taobao will be able to make revenues from paid searches, display advertising, virtual furniture or tools for stores, or transaction-based commissions charged by Alipay.
YY tries to expand its online rich-media interactive business from music show to other categories, talk show, game broadcasting, and education. It’s existing infrastructure is enough for teachers to give live classes, interact with students real-time through text and voice messages and take payments.
The music show business is a major revenue driver for YY that the company takes cuts of virtual item sales. Eric He, YY’s CFO, estimated YY Education could generate revenues in two years during Q2 2013 earnings conference call. His pointed out that YY Music started monetization in 2011 and accounted for 30% of the company’s total revenues in 2012.
William Ding, CEO of NetEase, has been bullish on online education. His company, with over 90% of the total revenues from online games though, tapped into online education as early as in 2010 with a launch of Open Courses program which provides educational videos for free. It licensed recorded video courses from US universities and hired translators to add Chinese subtitles. Coursera’s courses for users in China are hosted by Netease.
In late 2012 the company launched Cloud Class, a platform for users to take online classes and literally study there. Youdao Dictionary, an digital dictionary under Netease, also has a feature for Chinese users to learn foreign languages.
Baidu launched a separate search service for education in the past July. Not only does it return online course results but also the offline classes. Like always, search services must benefit from the educational revolution that is brewing in China in terms of advertising revenues.
91, one of the leading app distributors in China that is acquired by Baidu, has built a platform, 91UP, for educational apps and online courses.