Logging on to learn: China’s online education market

keyboardEven given the high importance placed on education in China, the speed of growth of online education has surprised many. The EU SME Centre look into this burgeoning market, and identify the opportunities for SMEs. 

Driven by the Internet boom and Chinese families’ increasing investment in education, China’s online education market share has nearly tripled from CNY 35.2 billion (EUR 4.59 billion) in 2008 to CNY 84 billion (EUR 12 billion) in 2013. Many offline education institutions have shifted online and the market has attracted big Chinese technology companies hungry for a share. With the development of new technologies and a growing number of users, it is anticipated that more niche markets will emerge, presenting opportunities for European small and medium-sized enterprises (SMEs).

chart 1 (Source: Online Education Development in China 2014, iResearch)

Meanwhile, the number of online education users in China has been growing rapidly, reaching 67.2 million in 2013, and is expected to reach 120.3 million by 2017.

chart 2


(Source: Online Education Development in China 2014, iResearch)

Chinese choose to study online for various reasons, with the top two identified being to obtain career skills training and language training, according to iResearch’s report in 2013.

chart 3


(Source: Online Education Development in China 2014, iResearch)

Knowing Your Partners and Competitors

The online education market in China is highly competitive, with both local and international companies looking to gain a larger share.

Active local players in the market include New Oriental (新东方), Xueda (学大教育), Xue’ersi (学而思培优) and Hujiang (沪江). International players such as Pearson and McGraw-Hill Education are eyeing the market as well.

Since 2011, with the explosion of the US online education market, about 10 Chinese online education companies have received angel investments. The market in China is continuing to boom, and estimated to hit CNY 173 billion (EUR 25 billion) in 2017.

Since 2011, 11 Chinese education enterprises have been listed in America, including China Education, New Oriental, Xue’ersi and Xueda. Most of them have opened their platforms to online education.

As of December 2013, eight of the US-listed Chinese education companies, including New Oriental, had a total market capitalisation of USD 7.7 billion (EUR 5.8 billion). This is a 29.5 per cent increase from USD 5.5 billion (EUR 4.1 billion) in December 2012.

Because online education is a new frontier for education and a lucrative market, it has also attracted big Chinese technology companies such as Tencent and Alibaba. For example, Alibaba’s Taobao developed an online platform known as Taobao Xuetang to promote and sell online education tools and packages.

It is anticipated that the market will continue to be competitive during the next few years as more Chinese and international companies will be attracted to enter it. Chinese consumers will not only demand more diverse content but also more interactive and user-friendly platforms. Specific opportunities for European SMEs include corporate E-learning programmes, career skills training platforms, child learning mobile applications, language learning mobile applications, and educational games. To learn more about China’s online education market, download the sector report on the EU SME Centre’s website.

EU SME Centre LogoThe EU SME Centre in Beijing provides a comprehensive range of hands-on support services to European small and medium-sized enterprises (SMEs), getting them ready to do business in China. From first-line advice to in-depth technical solutions, we offer a variety of services through our Knowledge Centre, Advice Centre, Training Centre and SME Advocacy Platform.

The Centre is implemented by a consortium of six partners – the China-Britain Business Council, the Benelux Chamber of Commerce, the China-Italy Chamber of Commerce, the French Chamber of Commerce in China, the EUROCHAMBRES, and the European Union Chamber of Commerce in China.

All services are available on the Centre’s website after registration.