According to a survey on China’s education industry conducted by Deloitte in May 2016, China’s education sector has expanded rapidly, and the market scale is expected to reach three trillion yuan (US$454b) in 2020, up from 1.6 trillion yuan (US$240b) in 2015. Meanwhile, the market size of the country’s English training industry was 104.2 billion yuan (US$15.7b) in 2015, and it is projected to exceed 220 billion yuan (US$33b) by 2020, according to Bosi Data Research Center, a Beijing-based market consultancy.
51Talk, one of China’s largest online English education providers, went public on the New York Stock Exchange in June 2016. Huang Jiajia, its CEO, told NewsChina that the market potential reflected the growing demands for after-class English programs.
Before 2000, she said, exam-oriented training programs such as TOEFL and IELTS – mostly taken for immigration or university entrance purposes – dominated the English teaching market nationwide, but latterly, Chinese parents have attached growing importance to English communication skills.
“Nowadays, most parents of primary school students in China were born in the 1970s or 80s,” Huang said. These parents were mostly just taught English reading and writing skills when they were at school, and they don’t want their children to follow in their footsteps.
Bai Jiaoyu, chairman of English First (EF) China, told our reporter that the changing mindset of Chinese parents started in 2005 when the concept of a “critical language learning period” was prevalent. It stated there is a crucial moment for children to master a language, and it will yield twice the result with half the effort.
“The critical period hypothesis was proposed through studying children’s mastery of a second language after they emigrated to an English-speaking country,” said Gong Yafu, head of the foreign language education branch of the Chinese Society of Education. He said that it aimed to discover the best period for children to master a second language in a new language environment. From this perspective, he said, the theory is not suitable for China. To this day, however, virtually all after-class English training schools nationwide still use the concept to promote their classes.
In recent years, new education policies that aim to relieve the burden on elementary school students also contributed to the popularity of extra-curricular English training programs. In 2011, the Ministry of Education announced that English would not be taught at elementary schools before the third grade. In 2013, it announced there would be no required exams for elementary students before the third grade. In 2014, however, Beijing’s municipal education authorities announced that both the city’s high school entrance exam and college entrance exam will emphasize the language use capacity of students.
Hu Min, CEO of New Channel, a major English training institution in Beijing, argued that because of the limited hours of English classes at school, students have to take after-class English programs to practise their language skills, which has “reshuffled the English training market.”
Huang Jiajia, CEO of 51Talk, told our reporter that when the company was established in 2011, its main business was teaching adults oral English using instructors from the Philippines. After 2015, the company began to switch the business to K-12, and in the first half of 2017, K-12 accounted for nearly 72 percent of the company’s revenue.
According to Zhang Yu, PR manager of VIPKID, an English training institution targeting K-12, the company has trained over 200,000 people as of July 2017, securing revenues of two billion yuan (US$300m) from January to July 2017.