Fancy Schools and Dating Apps Stir up Education in China

Traditionally, education in China has been considered extremely important and seen as a way to improve one’s social status. Today an average Chinese family spends 30% of their overall income on education, which is much higher than in Japan (10%) or in South Korea (22%). Performing well on the university entrance exam (GaoKao) is a major objective for all the students taking part in the rather rigid education system of China. Chinese “tiger Mums” are willing to pay for all sort of extracurricular classes to make sure their children develop a competitive edge. In middle of China’s mobile revolution, it is not surprising that online education is destined for rapid growth.

The market conditions are ideal for Edutech startups and for traditional educational institutions to focus on the online and more specifically on the mobile education market. Currently, the demand is the highest in the language category, but early childhood learning, general education and test preparation for standardized exams (GaoKao) have a growing significance too.

The private investments in the sector are surging. In 2014, $634.4 million was invested in online education companies, which takes up 26% percent of all the global investments in the industry, while the same ratio was only 1% in 2012 .

All the big domestic internet companies are there to carve out their piece of the online education pie. Just to name a few: Baidu, Alibaba, Tencent, NetEase, Sina Weibo, Youku, Kingsoft and even the dating site Shijijiayuan entered the market. The list is rather impressive, but not everyone trusts these new learning methods yet. Currently the biggest chunk of the users are professionals (77.2%), while only a small portion of Gaokao students are using online education for their preparation.