Part II – II Analysis on the Market Size of Online Primary and Secondary Education
I. Analysis on the Market Size of Online Primary and Secondary Education
Different conclusions are drawn about the market size of online primary and secondary education due to different statistical caliber. In this part, institutional and non-institutional online education companies are included in the research and a conclusion is made after adding up the market size of all segments that the market size of online primary and secondary education market of 2015 is about RMB 42b, and the figure exceeds RMB 8b, if the hardware and system integration market included.
II. Market size of segments of online primary and secondary education
- Educational digitalization software and service (institutional): about RMB 30b annually
It refers to software product and service in relation to education digitalization, including online learning platform, micro course, question bank, courseware production tool, training for teachers and other, whose market size is about RMB 30b each year, or about RMB 80-100b, if plus server, tablet PC, network equipment and other supporting infrastructure.
- Online primary and secondary schools (non-institutional): about RMB 3b annually
It refers to online schools that put focus on non-institutional market, such as Xueersi, CHINAEDU.COM, Etiantian, Jd100, etc. That is the earliest online primary and secondary online education model, but its market size has not expanded a lot for a long time, suggesting that it is difficult for traditional online schools to expand greatly.
- Learning machine (non-institutional): about RMB 10b annually
It refers to the market of well-known learning machines such as Eebbk, Noahedu, Hjx and Readboy. It has existed for a while and become very mature with the promotion by enterprises through enormous advertisements. Learning machine has evolved to be connected with a color screen from the initial stand-alone with a monochrome screen, a real combination of tablet PC plus learning platform with content resources. Now, the market of learning machine products is basically stable and saturated. The appearance of intelligent learning products mainly featured by intelligent learning robot will create a new market for learning machine.
- Emerging education App: about RMB 1b annually
It refers to emerging App market including Xueba100, Afanti, Yuansouti, as well as Sanhao that is engaged in online one-to-one mentorship. Even though these new-model companies have not yet made great revenues until now, they grow at a very fast pace, so they have a great potential in the market.
III. Analysis on the market potential of online primary and secondary education
There are about 190m students in primary and secondary schools in China, meaning that the training market for primary and secondary students has 190m potential customers. According to Deloitte’s overview, the market size of China’s primary and secondary training alone reaches RMB 680b.
In recent years, such listed companies as Xueersi and Xueda (having been acquired) have appeared in the offline education market. Long-standing education magnate NDF has also poured a lot of money into primary and secondary teaching and mentoring, alongside many pro-listed companies including Giant Education, Longwen Education and others in other places. The popularity of extra-curricular tutorials has almost reached 70% in first-tier cities, close to that of South Korea.
By comparison, online primary and secondary education only has a market share of less than 1% in the whole primary and secondary education and training industry. If the penetration of online primary and secondary education reaches 30%, the market size of online primary and secondary education would reach RMB 200b each year.
In recent years, online primary and secondary education market has grown at a rate of 30-50%, so it has a great potential. Just due to this great potential, thousands of companies are attracted to enter this field.
- Part II – III Analysis on the Features of the Primary and Secondary Education Digitalization Market
This is a series of articles from Blue Book of China’s Online Education Industry, authored by our partner China Online Education Research Institute (COERI). Each post is a chapter from the blue book.