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Home›EdTech & Innovation›A Look At China’s Thriving Edtech Market

A Look At China’s Thriving Edtech Market

By Matthew Lynch
July 11, 2019
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Edtech companies in China are in a league of their own. Normally it’s hard enough for a company to reach unicorn status, to be valued at over $ 1 billion. Not in China. China has several.

iTutorGroup, which operates out of Shanghai as VIPABC notes its value as $1 billion on its website. Beijing-based VIPKid which recently raised $200 million in fresh funding is valued at $ 3 billion.

But that’s nothing. The net worth of TAL Education Group, a holding company for a group of tutoring-related companies was $19.32 billion as of April 19, 2019.   Altogether the online English tutoring business is expected to grow to a whopping $8 billion business this year according to iResearch.

What makes these behemoths so successful?

Education technology is big in China because education is big in China. Chinese parents put a high value on the education of their children. Families spend a large proportion, more than a third, of the family income on education. Chinese parents spend approximately $15 billion a year on children’s English-language learning. According to a report by the Chinese Academy of Sciences, 73 % of parents in big cities like Beijing and Shanghai spend at least $1,580 on online English classes each year.

The Chinese market also prizes English language proficiency. Proficiency in English is seen as the gateway to better career prospects. China’s middle class is also growing and becoming increasingly affluent, so more people can afford to pay for their children or themselves to learn English.

The demand for English teachers keep growing, and brick and mortar language schools can’t keep up with the demand. According to the market research company, Daxue Consulting, there is a shortage of 100,000 teachers in China.

The shortage of English teachers physically working in China has created a great opportunity for companies to provide online teaching. It also means stiff competition to obtain the services of qualified English teachers.

Online English teaching companies are in a race with each other to hire foreign English-speaking teachers who’d like to work from home and teach Chinese kids.

Currently, there are in excess of 16,000 job openings at VIPKid. The company recruits teachers from North America at a salary of $21 per hour and boasts 650,000 students and 70,000 teachers. VIPKID has an enviable student retention rate of 95%, and its 25-minute-long classes brought in an impressive $760 million in revenue in 2018.

VIPKid was ranked 29th on the 2018 World’s Most Innovative Companies list. As an entirely Chinese company, it is ranked second only to Tencent.

51Talk is also publicly traded and is valued at $215 million. The company sells itself as the largest online teaching platform and invites foreigners to become a “funtastic” home-based teacher. The online platform boasts 10,000 teachers and 1 million students. 51Talk has expanded to the Philippines where it plans to hire 2,000 teachers where many people are proficient in English.

Meanwhile, iTutorGroup says on its website that it provides tens of millions of classes annually and boasts more than 20,000 teaching consultants in 135 countries.

The race is on for these online teaching companies to get the most students and attract as many qualified teachers as possible for their students.


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1 comment

  1. As Coronavirus Spreads, House-bound Chinese Students Are Causing An Online Ed-Tech Boom - SBB DEV 23 June, 2020 at 02:11 Reply

    […] of users—and this is a market that was already leading the world. Several Chinese companies are already valued at over a billion dollars, while the giant TAL Education had a net worth of almost $20 billion last year, with Stocks […]

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