Part III – II Features of the Online English Learning Industry
I. Large companies dominating the market
According to the Statistical Bulletin of the Development of Education in China released by the Ministry of Education, there are now near 300m English training consumers and over 500,000 training institutions in China. Online language learning projects are conducting the fourth round of financing. Hjclass, online English training giant, conducted the fourth fundraising of RMB 1b last October. Tomorrow Advancing Life announced last September to buy the whole FIRSTLEAP, an English learning brand for children.
As shown above, small companies represented more than a half (76%) of the total online English training companies in 2015. According to a third party’s statistics, new online education companies appeared each day in China in 2014, and many of these small companies are new projects appearing within last year with the focus on words and oral English.
Secondly, large-scale companies are not the dominant in number, but they play a unique role in the whole market, e.g. New Oriental, Hjclass, VIPABC, SmartStudy, 100.com, Mofunshow, Hongen and GEDU.org, as well as 51Talk, VIPABC and others that post advertisements at the subway.
Sure, there are not only small-and-medium-sized enterprises in the market, but also medium-sized companies making up about 17%. In other words, they are a group of small-and-medium-sized companies that find an appropriate model for their own development and gradually expand after raising the funds at the right time.
II. Audience’s large age range but poor adhesiveness
Even though online education is a field focusing on contents, yet its value lies in how many users it can benefit. Some people once described primary and secondary education as a cake whose users ranged from primary to secondary schools and their adhesiveness lasted for up to 12 years. There is a profound advantage in primary and secondary education due to the function of “orientating examinations”.
In terms of age, English training’s audience has a large span ranging from preschoolers, primary and secondary students and college students to adults. English learning in itself is a boring and repetitive activity, so it requires more patience. For this reason, it is very difficult to totally attract users with one online education product.
On the other hand, audience at various age stages have different demands and spend limited time on such products. Take an example, as for university students, such products are made specific to postgraduate entrance exams, IELTS and TOEFL. And most college students spend only one year on learning English. So it is necessary for English training institutions to build their own word-of-mouth so as to constantly increase enrollment and attract new users. It can be said that there is a need to strengthen the adhesiveness of users for the online English learning industry.
III. Each taking what he needs and the demand being strong
Reportedly, the financing for online K12 from January to October 2015 was RMB 4.56b and the funds raised in the second round and subsequently accounted for 80% of the total financing, suggesting that online K12 projects have developed in a very mature state; the funds for language learning are mainly raised in the fourth round and the funds for vocational training mostly in the first round with its projects mostly in the very early stage. It can be seen that the fundraising for language learning among all fields of online education has basically been near maturity. The demand for language training industry is not temporary but continuous.
In May 2015, New Oriental launched its latest product for kids — Winning Kids, an online interesting English class for learners aged 6-12. Tomorrow Advancing Life also launched the “lewaijiao.com”, created by Zheng Jinli, former head of 91waijiao.com not long before New Oriental’s move. VIPKID is a startup engaged in offline English training for kids. VIPABC has launched such products as Young Learners English as well as earlier enlightening Jiliguala and baby English speaking.
Given the large age range, there are diverse products in English training industry to meet the needs of the audience at various stages of age. The really needed projects in the online English training industry include APP for remembering words, real telephone course for training oral English, small online interactive class, enormous listening bank and others. Therefore, users’ demands in the English training industry are not only continuous, but also diversified. English training is a combined point of test orientation and quality in the field of online education. It has always been followed by parents and the future competition will become increasingly fierce.
- Pary III – I Definition of the online English learning industry
- Pary III – III Development Trend of the Online English Learning Industry
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.