Part IV – I Overview of the Online Vocational Education Industry
I. Definition of the online vocational education
The online vocational education refers to online training and exam conducted by people to become qualified for an occupation and improve vocational skills, with user group mainly being adults.
II. Composition of the online vocational education industry
Generally speaking, online vocational education is divided into two categories in the market: a) exam-and-certification-orientated training for obtaining a qualification certificate of a certain profession; and b) knowledge-and-skills-orientated training. The vocational education and training for the former is the mainstream and develops at the fastest pace, mainly because the driving force for people to take part in online training comes from outside–having a recognized certificate in a certain industry. That makes the “exam” market very popular. The knowledge-and-skills-oriented training has gradually gained popularity with the constant emergence of new market division and more requirements for knowledge and skills of previous posts.
Today’s popular online vocational education mainly covers eight fields:
- Public servant: well-known civil servants exam and great demand;
- Finance and economics: accounting qualification examination at all levels;
- Medicine: e.g. exams for doctor of traditional Chinese medicine, doctor of Western medicine, nurse and others;
- Law: e.g. judicial examination, legal adviser exam and others;
- Engineering: e.g. constructor’s examination (level 1), constructor’s examination (level 2) and others;
- Teacher certification exam: exam for obtaining the qualification of a teacher;
- IT training: popular IT skills training, e.g. iOS, Android, Java Script, PHP and other software development skills training;
- Continuing education relating to professions: continuing education relevant to justice, insurance, teacher and others.
III. Size of the online vocational education industry
From 2012 to 2015, the number of consumers learning online vocational training courses has been on the rise, and it is expected to reach 600m in 2016. Most of them are at the age of 25-40, and university (tier one and two) students to graduates, graduating students and working staff are the main consumption force with the strongest demand for vocational education. With the increase of employment pressure, younger and younger people begin to gradually become customers of vocational education. The market size of online education has gradually risen year by year, so has that of online vocational education. And the share of online vocational education in China has also become bigger. Therefore, it can be predicted that the CAGR (compound annual growth average) of online vocational education remained at 40% in 2015 and later.
IV. Classification of online vocational education companies’ products and services
As shown below, products and services provided by vocational education companies are now classified as follows.
Online teaching (classroom lessons) tops. Unlike K12, vocational education has different contents in addition to the audience’s different age stages. The proportion of online teaching (one-to-one) is also at a very high level on account of it audience’s poor self-control and immaturity. However, in terms of vocational education, online one-to-one instruction is not popular, but recorded or live course becomes very popular. Sure, that explains a phenomenon that the maturity of the audience of vocational education makes them to attach more importance to the export of course content based on class learning.
V. Features of the online vocational education market
- Large but scattered
The market of vocational education covering all its kinds is very large, worth of about one trillion Yuan. But segments in this large market are very complicated and scattered. Take accounting as an example, as known to all, China Distance Education Holdings Ltd. has a decisive position in accounting training. But as a matter of fact, many small-sized platforms develop very well in small areas. In other words, accounting industry is very scattered, which is also one of the features of the vocational education industry.
On the other hand, no large company totally monopolizes the market just because online vocational education is classified very loosely, suggesting that there is a great space for exploring it. For example, XDF has been engaged in English training for more than ten years and its development model has basically been fixed. But it does not succeed as expected when entering a new field by copying its previous model. So an industry develops with changes and it is very difficult to copy a model in a new field.
- Many but small companies
Next, in terms of corporate type and size, many companies in this industry are small. It is such a large market and various audiences that make it easier for small companies to rise and develop. For example, only TEDU, Qianfeng Education and others in IT can generate a revenue of hundreds of millions of Yuan, and most of the rest are small-and-medium-sized companies.
- Focusing exam and employment
Similar to K12, vocational training is also mainly characterized by exam orientation. Basically, the learning objective is to improve vocational skills, e.g. civil servants exam, constructor’s exam, accountant’s exam and teacher’s qualification exam, etc. The exam-orientated market will weaken once national policies that, to a certain extent, limit some vocational qualification exams are lifted. After some adjustments are made to a professional access by the State Council, some exams will gradually be not needed, thus increasing employment training.
IT training is priced at about RMB 10,000 to 15,000 and even more per person, helped by greater technical difficulty and higher salary paid for IT employees. Especially, in recent years, the Internet industry has been in crying need for technicians, significantly driving up the employment rate of as much as over 90% of learners.
- Relatively mature users
With regard to K12, users and customers are separated. Users are students who make use of courses; while customers are parents who purchase these courses. But most of the audience of online vocational education is adults basically aged at 18-30. Compared with K12, whose customers and users of vocational education are the same person, its users are relatively mature and make decisions independently.
- Part IV – II Analysis on Segments of the Online Vocational Education
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.