China’s Online Education Sector Growing, But Slowly

It’s no surprise that online education would find a home in a country as academically-driven as China. What is surprising is how slow online courses have been able to make a dent in a country where education companies are massively profitable. Because Chinese parents spend so much money on academic support services, the top 8 of the country’s education-related companies have a combined revenue of over $1.5 billion. Even if online education makes up a small chunk of that, the money-making possibilities are still impressive.

That online education was slow out of the gate in China is odd in light of the fact that it has one of the most connected populations in the world. According to Wei Gu of The Wall Street Journal, foreign venture capitalists have invested in 10 online education companies since 2011, but education giants inside the country seem reluctant to follow suit.

Another reason is China’s education system itself. The country’s focus on tests means there is less need for interactive learning than in the U.S. system, which cultivates a wide range of interests and often seeks to accommodate different learning styles. In China, traditional programs that help with exams and job searches are still the most popular. At YY Inc., an online entertainment company that is branching out into education, the most expensive classes are for interviews to become Chinese civil servants.

Another reason for slow adoption is a lack of infrastructure support. Few classrooms around the country are equipped with the technology necessary to take advantage of online courses and few teachers have the training necessary to integrate such tools into their curricula. Still, slowly but surely, progress is being made.

Netease, Inc., a Chinese internet company, is seeking to follow the path blazed by US-based Coursera by offering an online courses for free to its users. Another company, Shanghai Taomi Network Technology, offers interactive academic materials and books.

Traditional education companies have to adapt to the change, whether they like it or not. Yu Minhong, chairman of New Oriental Education & Technology Group Inc., said recently at a forum that online education will account for 40% of the private education market in three to five years, from 10% now, and the company is positioning itself as a content provider.

Attention needs to be shifted from offline to online development, otherwise New Oriental won’t survive, Mr. Yu said.

Another change that bodes well for the Chinese online ed industry is the fact that Chinese parents and students are more willing to consider alternatives to an educational approach that has been in place for centuries. As families sour on incessant testing, the door swings open just a little wider for e-learning.

07 17, 2013
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