By Ekaterina Kologrivaya and Emma Shleifer
Beijing, 8 a.m. — Sitting at her desk, Wang Yao checks in with her class online. She reviews the PowerPoints sent by her teacher for the day and sets to work, checking her classmates’ WeChat messages. It’s been two months since she last went to school. “We had the holidays, and then the virus happened,” she explains over Zoom.
Many businesses in China could say the same. Central banks have rushed to plug the gushing wound in the country’s economy, supporting manufacturers and small- and medium-sized enterprises with injection packages aimed at lowering their borrowing costs and protecting their loan applications. At a time when SMEs, which contribute 60 percent of China’s GDP, are being rescued left and right, one industry has bucked the trend: online education.
Even before the quarantine measures forced several million people indoors, China’s online education was doing uniquely well, holding steady amidst the sharp drop in China’s venture capital last year. With the world’s largest student population of the 176 million K-12 students competing fiercely – particularly in the gruelingly difficult college entrance exam, which sees only 40 percent securing a place at university every year — every extra push matters. Online education tools have been a natural progression for China, as over 800 million Chinese citizens are internet users, with impressive fiber, broadband, and internet coverage even in many remote regions. STEAM education (science, technology, engineering, art, mathematics) constitutes, along with K-12 education, the largest segments of China’s EdTech market, which in 2018 reached $300 billion in revenues. Investors have not failed to notice this opportunity. HolonIQ reports that between 2014-2018, investment in Chinese educational companies was one-and-a-half times greater than the total amount of money spent in the United States, the European Union, and India combined.
EdTech’s potential user base further expanded on January 27 when the Ministry of Education decided to postpone the spring semester of schools and kindergartens to curb the spread of the novel coronavirus. Suddenly, over 278 million students moved online. The efficiency of the transition bears witness to the central government’s premium on a tech-supported curriculum, with the State Council investing $6 billion into AI and tech support for education in 2019.
“I think at that moment we felt an uptake of sales,” reflects Chris, co-founder of Beverly English, an online school that matches Chinese students with native English speakers abroad.
Offline businesses hit by quarantine measures are thinking of making the switch. Senior education consultant Mr. Mitchell agrees: “It has really made us think about how we should be capitalizing on online resources moving forward and… humanize our work in ways we didn’t need to consider previously.”
Some students have been quick to pick up on the flexibility of online learning. “It’s more relaxed,” Wang Yao laughs, “there’s no supervisors!”
Lu Yang, a tenth grader at Nanjing Foreign Language School agrees. Although he still completes his six classes daily, “the time and place are flexible, there are no restrictions at all.” It’s a far cry from the usually highly regimented lives of students, where 5:30 a.m. wake up calls and 12 hours of continuous studies are common. Students typically board at school during the week to avoid wasting time commuting home.
Teachers also acknowledge the flexibility that comes with online learning, which they’ve never used before. Middle school students onward are particularly suited to this type of home-based learning, says an educator from Tianjin Nankai High School. Speaking highly of the online resources offered by their schools, such as DingDing, teachers note that pupils have been able to view content at their own pace, rewinding as necessary. A math teacher based in Guangzhou adds that it saves time for teachers who now only need to teach the material once, and students appreciate the immediate feedback on their work. “What is also cool is that I see the exam results through the process as the computer checks them immediately,” says Lu Yang.
But these benefits are seen as the better parts of an inconvenient situation. Many teachers have ended up using the collaboration tools already at their disposal that they know well: WeChat, QQ, and Zhi Xue Wang. “I haven’t used online platforms before for studies, and prefer to use real time communication to chat in QQ, even though I do think it’s very convenient,” says a Guangzhou-based teacher.
Teachers also lament the quality of teaching online relative to physical classes. A common refrain is the lack of interaction and direct student feedback, which many cite as the main barrier to long-term adoption of online tools. Of those interviewed, none plan to continue using the platforms once restrictions lift. “The level of engagement, interaction, and communication is quite poor,” says a Chinese literature teacher in Shenzhen who blames internet connection problems and students’ difficulty in grasping new methods. Hubei-based student Xiao Feng admits that “it took me so much time to understand how to use the platforms, and I’m the best student in the class.”
As a result, most educators and students are approaching online tools as temporary replacements and quick-fix solutions rather than long-term assets. “I don’t think everyone believes that studying online is better than going to school,” continues Xiao Feng. “We have a long way to go with this technology.” Like a number of her peers, she doesn’t plan on using online platforms after returning to school.
Companies are trying to fix these issues. EdTech expert Mr. Wei’s platform, based on the ClassIn engine, started experimenting with a new feedback system, requiring parents’ signatures and sounding alarms when class begins. “AI marking also needs improvements,” he says. “Additionally, we have a lot of places in China where internet coverage is not good enough and the speed of connection is low. We want to upgrade our videos so it’ll be easier to watch them in places with slow internet.”
Chris of Beverly English says that the most popular functions are short commitments for one unit, like one month subscription with eight lessons or just 1-minute long interactive videos. Uncertain about the future, “people are not making long commitments.”
But overall, teachers and students’ reluctance to retain online tools when schools reopen has made many EdTech companies cautious of overemphasizing the impact of the epidemic for their business. For Mr. Wei, the increased user base is mostly temporary, as people go online as a way to keep up with their normal lives.
Likewise, Chris views his own platform’s expansion with caution. “I wouldn’t call it drastic,” he advises, referring to the increased sales. “I would call it a fake demand that brought unprepared customers who… needed guidance,” as those who had previously never considered online education were propelled into it headfirst. Mr. Wei similarly notes that demand “hasn’t really changed.” As China keeps private and public education separate, the government’s push to adopt particular platforms has also restrained new user flow.
Paradoxically, big EdTech companies are eyeing the offline market. Smaller offline service providers are running out of cash, and Stephanie Lee, co-founder of online career counseling service Zhi Fei, warns that “very few who were purely offline were able to transition successfully.” Classroom rents and teachers’ salaries still need to be paid despite the lockdown, and thus these companies “probably won’t stay in business much longer,” comments her colleague James Leo. When that happens, Tomorrow Advancing Life (TAL) and New Oriental are poised to take the market by storm with their own offline businesses. “The gradual exit of smaller education firms means there will be more opportunities for major players to take their places,” he predicts.
Doubt remains over whether the quarantine-fueled demand for EdTech is just a fad. Users are not guaranteed to stick, and teachers have yet to embrace the online platforms as long-term supplements to physical classes. Chris remains positive, though. “A lot of people didn’t even think about online education before, now they know it’s not scary at all. This is a great sign for the entire online ed-market.”
For students, the question is less pressing. “My parents have no opinion about my online classes,” reasons a middle-schooler from Hubei. “They’re just happy that I’m busy.”
Ekaterina Kologrivaya is a sinologist who graduated from Higher School of Economics with an M.A. in Asian studies. She is currently working as an environmental assistant in PIM (Philanthropy in Motion) in Beijing as well as receiving her second masters at Yenching Academy of Peking University.
Emma Shleifer graduated from King’s College London with a B.A. in War Studies, and directed the Defense & Diplomacy Policy Centre in the King’s Think Tank. She is studying China’s foreign policy at Yenching Academy.
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