About China's EdTech market
About China's EdTech Market
This winter has been mild. How is everyone doing?
As a quick reminder, we have looked into the EdTech market in China.
Click here for the table of contents
1. China's EdTech market is hot.
2. list of unicorn companies in China's EdTech sector
3. why is the EdTech market growing so fast in China?
4. the future of the EdTech market
China's EdTech market is hot.
What is EdTech?
China's EdTech market is currently very active.
EdTech is a coined term that combines the words "education" and "technology," and refers to efforts to bring about innovation by incorporating technology into the field of education. The term X-Tech (cross tech) refers to the incorporation of technology into existing industries to create new value, and EdTech is an example of X-Tech.
X-Tech includes FinTech (finance), MedTech (healthcare), AdTech (advertising), HRTech (human resources), AgriTech (agriculture), LegalTech (law), and many other fields.
Many of the unicorn companies originated in China!
To give you an idea of how much momentum there is in the Chinese EdTech market, 8 of the 14 unicorn companies in the global EdTech sector are from China (about 57%). The others are 5 companies from the U.S. and 1 from India.
*See: Holon IQ January 6, 2020
Unicorn companies are defined as venture companies with a company valuation of $1 billion (about 125 billion yen) or more, less than 10 years old, and privately held. In other words, 8 of the 14 companies are Chinese companies, a number that can be considered one indicator of growth areas.
List of Unicorn Companies in China's EdTech Sector
The following is a list of unicorn companies in the EdTech sector in China (as of January 2020).
VIPKid
Online English conversation classroom service with teachers in North America
猿辅导 Yuanfudao
Online tutoring and math and English services for children
小盒科技 Knowbox
Online education using AI teachers
iTutorGroup
Online English conversation classroom service with teachers in North America
Zhangmen
One-on-one tutoring
Huike
Industry-University Cooperation
Ichiqisaku 17zuoye
Online Education Platform for K-12
*K-12 means kindergarten through 12th grade (3rd grade of high school) k=kindergarten
HuJiang HuJiang
Language-centric online classes, SNS, community
Why is the EdTech market growing so fast in China?
If you look at the number of unicorn companies worldwide, not just in the EdTech sector, according to CBinsights (as of January 6, 2020), there are 433, of which 214 are in the US, 101 in China, 22 in the UK, and 19 in India. Japan has 3 companies.
The number of Chinese unicorn companies in all sectors is about 23% of the global total, while the percentage in the EdTech sector is about 57%, indicating that the EdTech sector in China is growing much faster than in other sectors.
Why is the EdTech market growing so fast in China?
The reasons include the following.
Cultural background in which education is highly valued
Education is highly competitive, and education is considered very important to stay ahead of the competition. On average, families with preschoolers spend 26% of their household income on education and 20% of their income on K-12 children.
*Reference pdf document: The Value of Education-Higher and higher - HSBC Group
Huge Market
Approximately 20% of the world's population lives in China, and according to the Chinese government (January 17, 2020), the population will exceed 1.4 billion by the end of 2019. In addition, the one-child policy, which has been in place for about 35 years, has been relaxed since 2016, increasing the factors for client expansion. (Currently, the number of births is at an all-time low and has been declining for three consecutive years, and the birthrate is declining and aging. The population is growing.) Also, there is an increase in the middle class who are able to finance their education.
Widespread recognition of EdTech
There seems to be a strong common perception in Japan, including among VC [venture capitalists], that EdTech has a large market.
Strong Government Support
Almost every year since 2011, the Chinese government has increased its share of GDP spending on education. It has also provided much support, including building a 22-story MOOC Times building dedicated to EdTech in Beijing's Zhongguancun; in 2017, Premier Li Keqiang set out a technology-infused Chinese education reform for 2030.
Soil to foster developers
There is also the influence of creative education, which increases the number of makers, and the presence of young people known as "sea turtles," who have acquired cutting-edge knowledge and skills abroad and returned to China to play an active role in the country.
These are just a few of the many factors that may be contributing to this trend.
Future EdTech Market
What do you think? We have talked about the Chinese EdTech market, and we hope that you have been able to see that the market is expanding rapidly. And it seems that the Chinese EdTech market will continue to develop rapidly in the future.
I think that a system that has both a cultural background and national policy support is the driving force behind the creation of new educational services. Not only in China, but also in other countries that are focusing on the e-learning and EdTech fields, there will be more and more countries in the future. We will do our best to help Japan become a leading EdTech country.
Thank you for your continued support of learningBOX!
Reference sites: *Reference: Why Is China The World's Leading EdTech Country?
Why Is China The World's Leader In Edtech?
NHK News Good Morning Japan: "Sea Turtles" Supporting China's Rapid Technological Development