Learning and earning
By Shi Jing in Shanghai (China Daily Europe) Updated：2017-11-20
According to the China Internet Network Information Center, 144 million Chinese used such services by the end of June, including 6.62 million who registered this year.
The rapidly growing segment has three streams: the K12 education system that children from kindergarten age to 12 years old can pursue; vocational education; and language education.
The market in China for such online education is growing by 20 percent each year. Last year, revenue reached 156 billion yuan ($23.5 billion; 20.2 billion euros; ￡17.9 billion), according to the Beijing-based market consultancy iResearch.
With that kind of momentum, and given many Chinese parents' ample budgets for children's education, total market value is expected to reach 269.3 billion yuan in 2019.
According to HSBC's 2017 Global Education Survey, Chinese parents on average spend $42,892 on their children's education over 12 years - from primary school to high school - which is much higher than the amount parents spend in Australia, the United Kingdom and France.
Chinese parents also have the richest educational reserve, since 55 percent of them pay their children's education fees from savings, investments or insurance returns.
Despite a downtrend this year, investors are sustaining financial backing for ventures that offer online education.
According to iResearch, 83 rounds of funding were recorded in the online education market during the first five months of 2017, which brought in 4.95 billion yuan, down by 39 percent year-on-year. That compares with 176 rounds in the first five months of last year.
The full-year figure for 2017 is expected to be lower than the 519 rounds of funding in 2015.
Du Miaomiao, senior analyst with iResearch, says: "The market has witnessed much investment over the past three years. Now the investment bubble has been squeezed out. Investors have become more conservative."
But mergers and strategic investments have soared in the first five months, with 6 percent of funding coming from mergers and an additional 9.6 percent from strategic investments, up from 2.9 percent and 2.3 percent year-on-year, respectively.
"This shows that the market is consolidating after heavy investments over the past three years," says Du. "Industry leaders have started to extend their product lines via mergers. They are also integrating the value chain by making strategic investments in other companies."
