iResearch reported that the revenue of online education market in China has reached over 155 billion yuan with a growth of 27 percent in 2016. The growth rate of the online education market is estimated at more than 20 percent in the next few years. The number of online education users has increased by more than 20 percent in 2016, reaching a total of 90 million users. The growth rate is expected to be at about 20 percent and reach 160 million in 2019. Here are some reasons explaining the growth of this market.

Big family investment in education

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Education is important in every country, but in China, education also has a cultural meaning. China is a face saving society. Success is measured by one’s achievement. Kids having good grades and getting into a famous university bring glories and face to the family. On the other hand, low grades mean losing face. In gatherings with the extended family, it is common to brag about the kids’ school performance and later on their careers among family members.

Jack Ma, the co-founder of Alibaba, who has no fancy university degrees once said that “when you want to judge whether a person… is excellent or not don’t look at whether they went to Harvard or Stanford.” However, most Chinese parents don’t seem to agree on that. They bet it all on their life savings to send their kid to the best university, and hence better social status and more face. Chinese parents, especially the middle class, are willing to spend a lot on their kids’ education and the supplement educational materials.

Growing affluence

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China has now a larger middle class than any other society. In pushing forward the growth of the online education market, the middle class Chinese have played a big role. More families can afford sending their kids to study abroad. According to the Open Doors Report on International Educational Exchange 2016, the majority of international students in the United States are Chinese. In preparation for studying abroad, students are willing to study other languages and take overseas school entrance exam preparations to get themselves prepared – many of them will turn to online platforms.

High internet penetration

China has now 730 million internet users, with 95 percent of them access the internet through their smart phones. With more than half of the population actively using the internet, the attraction to online education business is clear.  As the smartphone penetration continues to grow, learning is becoming “on-the-go”. Most online education companies such as English First and Hujiang have apps. Mobile learning is flexible and is becoming the top preference for users.

Western online learning players have great opportunities in China

Foreign educators and online learning platforms have had some successful attempts in China. Massive open online courses are getting more popular. For example, Coursera has more than 1 million Chinese users, making the country its second largest market after the United States. The Chinese have strong demand on high quality online education products, and they trust especially products developed by the West.

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Photo credit: The New York Times