Is 2022 a Good Time to Promote an Online Training Business in China?
Posted: Sun Dec 22, 2024 7:32 am
It’s almost 2022 and China’s education industry has gone through a lot of late. First, it was hit with COVID-19, and then the government introduced regulations that hampered the operations of China’s own training companies.
So, is it a good time to promote a foreign online-training business in China? We still think it is.
Just How Big is China’s Online Learning Opportunity?
According to the US-China Institute, private classes and tutoring are a 120 billion USD industry in China, and the online education market was worth about 40 billion USD/year in 2020.
Another report expects the global e-learning industry to saudi arabia phone number reach 458 billion USD by 2026, with China making up 23% of that market (106 billion USD).
So, if you were to treat the Chinese and Rest-of-World (RoW) markets equally, you might spend about $1 on China for every $3 you spend elsewhere. Although, your success in one market doesn’t necessarily translate into success in the other. It can be a challenge for RoW companies to break into China, just as it can be a challenge for Chinese companies to expand abroad.
Recent Changes to the Education Industry in China
There have been four major trends lately that have shaped the current educational landscape.
First, Internet usage has increased dramatically over the past decade.
While China used to be behind in this regard, it’s now the forerunner in many respects. Essentially all young Chinese people are online now, with the only laggards being older people, and sometimes people living in rural areas (the Internet penetration rate in these areas is now about 60%).
However, this isn’t to say that everything was being done online. Much of the out-of-school tutoring was being done physically, in person.
Then came trend #2: COVID-19.
When COVID-19 hit, it caused people in China and elsewhere to go into various levels of isolation. Where I am in Alberta, Canada, there was social distancing, face mask requirements, and limited shut downs of restaurants and other social gatherings.
However, in China there were shorter, but much more stringent lockdowns. People would stay inside their homes for long periods of time. Eventually, the major restrictions were lifted, but then subsequent measures were put back in place selectively based on the location of new outbreaks.
During lockdowns, workers still needed to work, and students still needed to study. So COVID-19 reinvigorated the online sphere, encouraging people that weren’t quite yet ready to study online to jump on in.
The third major trend (or trends) is on the regulatory side.
The Chinese government wants its citizens to have a good life and…more babies. That is, the one-child policy was relaxed to two and then a three-child policy in an attempt to get people to have more children. But women haven’t been persuaded. In fact, China’s birth rates only went up a tiny bit.
Now, I can’t say what everybody in China was thinking, but my Chinese Popo (my wife’s mother’s mother) had three children when she was young. She told my wife, “Two is enough. Don’t have more than that or it will be bitter for you.”
Many middle-aged and young married couples in China feel that they have enough pressure already, so they don’t want to have more kids.
So, is it a good time to promote a foreign online-training business in China? We still think it is.
Just How Big is China’s Online Learning Opportunity?
According to the US-China Institute, private classes and tutoring are a 120 billion USD industry in China, and the online education market was worth about 40 billion USD/year in 2020.
Another report expects the global e-learning industry to saudi arabia phone number reach 458 billion USD by 2026, with China making up 23% of that market (106 billion USD).
So, if you were to treat the Chinese and Rest-of-World (RoW) markets equally, you might spend about $1 on China for every $3 you spend elsewhere. Although, your success in one market doesn’t necessarily translate into success in the other. It can be a challenge for RoW companies to break into China, just as it can be a challenge for Chinese companies to expand abroad.
Recent Changes to the Education Industry in China
There have been four major trends lately that have shaped the current educational landscape.
First, Internet usage has increased dramatically over the past decade.
While China used to be behind in this regard, it’s now the forerunner in many respects. Essentially all young Chinese people are online now, with the only laggards being older people, and sometimes people living in rural areas (the Internet penetration rate in these areas is now about 60%).
However, this isn’t to say that everything was being done online. Much of the out-of-school tutoring was being done physically, in person.
Then came trend #2: COVID-19.
When COVID-19 hit, it caused people in China and elsewhere to go into various levels of isolation. Where I am in Alberta, Canada, there was social distancing, face mask requirements, and limited shut downs of restaurants and other social gatherings.
However, in China there were shorter, but much more stringent lockdowns. People would stay inside their homes for long periods of time. Eventually, the major restrictions were lifted, but then subsequent measures were put back in place selectively based on the location of new outbreaks.
During lockdowns, workers still needed to work, and students still needed to study. So COVID-19 reinvigorated the online sphere, encouraging people that weren’t quite yet ready to study online to jump on in.
The third major trend (or trends) is on the regulatory side.
The Chinese government wants its citizens to have a good life and…more babies. That is, the one-child policy was relaxed to two and then a three-child policy in an attempt to get people to have more children. But women haven’t been persuaded. In fact, China’s birth rates only went up a tiny bit.
Now, I can’t say what everybody in China was thinking, but my Chinese Popo (my wife’s mother’s mother) had three children when she was young. She told my wife, “Two is enough. Don’t have more than that or it will be bitter for you.”
Many middle-aged and young married couples in China feel that they have enough pressure already, so they don’t want to have more kids.