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Education

Education

Category value surges with online learning

COVID-19 lockdown accelerates growth rate

The education category almost doubled in value making it second only to entertainment in percentage year-on-year value increase. Education’s 92 percent increase followed 57 percent value growth a year ago and 68 percent a year earlier.

The COVID-19 lockdown, with more time for online learning, accelerated the sustained category growth. The number of people accessing online education reached 423 million in March 2020, up over 110 percent in just over a year, according the China Internet Network Information Center.

Factors driving category growth include the importance of education in China, the aspirations of parents and children, and the practical need to excel on rigorous high school and college entrance exams. Knowledge is among the Top 10 Life Values across China and has been rising in important in Tier 3 cities, according to Kantar China MONITOR.

Each of the three education brands ranked in the China BrandZTM Top 100 were among the Top 10 Risers, brands that increased most in value year-on-year. Xueersi led the Top

10 with a value increase of 120 percent. New Oriental and VIPKID increased 78 percent and 67 percent, respectively.

Xueersi and New Oriental, which operate physical locations throughout China, have invested heavily to expand their online offerings during the past few years. They responded to a spike in demand during the pandemic by reaching more households, often in lower tier markets and sometimes with free content to raise awareness of online learning.

VIPKID is an online education classroom that connects students worldwide with English-speaking teachers based in North America. The company reportedly has around 700,000 students in China. VIPKID benefited from another successful fundraising round. Its major investors include Tencent and several Western venture capital firms. VIPKID also increased its presence in China during the lockdown.

Pursuing opportunities abroad, Xueersi launched the Boston Teaching Center, located near Harvard, to help with the recruitment of qualified faculty. Xueersi also opened its first tutoring center outside of China. Located in Silicon Valley, it is expected to serve Chinese elementary school students. In China, Xueersi operates 758 learning centers in 69 cities.

New Oriental increased revenue substantially for core after- school tutoring programs. Along with its online investment, the brand continued to expand its physical presence, opening a total of 152 new facilities during fiscal 2019, and it expanded to eight new cities. New Oriental operated over 1,260 schools and learning centers.

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