Last week, a picture showing parents and children are participating in an activity hosted by a Chinese education giant in the U.S. was much discussed on short video apps like Douyin, the Chinese version of TikTok.

Blingo is hosting activities in the U.S. last week

These short videos said New Oriental, a leading after-school tutoring company that started by teaching Chinese students to learn English to apply for foreign colleges and universities in 1993, is going abroad to teach the Chinese language through a newly launched arm named Blingo.

The Chinese learning arm responded last Thursday on its Weibo account that Blingo is hosting offline activities in the U.S., and their courses target all overseas Chinese children and teenagers.

Under recent tightenings on China’s K-12 after-school tutoring industry, some edtech companies are looking to tap into overseas markets, with Chinese learning a popular way forward for them. Blingo is one example.

More players in overseas Chinese learning category

After and even before the "double reduction" policy, the regulatory document on off-campus after-school tutoring issued on 24 July, more K-12 education companies in China shifted gears, and one of the ways out for them is to join the club to teach overseas children to learn Chinese.

New Oriental, a Beijing-based education giant, unveiled a brand named Blingo in August to teach overseas Chinese children aged 4-15 to learn Chinese. Beststudy Education, a Hong Kong-listed tutoring provider, rolled out international Chinese language courses in July with Iranian Consulate General Guangzhou.

In addition to these newcomers, some providers even expanded into the sector a few years ago. One-on-one English tutoring company VIPKID, which launched Lingo Bus in 2017 to help children aged three to five learn Chinese, said it would put more focus on international business after its domestic business was largely impacted due to regulations.

With the latest additions, there are three kinds of companies in the club: Chinese learning-focused specialists, including LingoAce,Chinese Rd, Koala Know, and Wukong EDU; large K-12 generalists in China like New Oriental; and other edtech companies such as Palfish and Huohuasiwei.

Why do these players crowd into the space? A person familiar with the sector even said he has “no reason to abandon the sector”. The answer could be the increasing demand for Chinese learning.

According to China’s MOE, as of the end of 2020, more than 180 countries and regions have launched Chinese learning programs, over 70 countries have introduced Chinese into the national education system, and more than 20 million overseas people are learning Chinese.

Education companies in China are used to targeting overseas Chinese families, who share similar culture and language habits with domestic Chinese people, as their first audience. More than 60 million overseas Chinese live in 160 countries and regions, with many of them are located in North America, Europe, and Southeast Asia, according to the Blue Book of Overseas Chinese.

Thus, these companies often see Europe, and North America, and Southeast Asia as their major target markets.

LingoAce founder Yao Hui said, users in Europe and North America with stronger spending power have less demand, while those in Southeast Asia with weaker spending power have more demand. The Singapore-based company claimed it has more than 4,000 tutors and 1,200 employees in China.

A more competitive landscape

Newcomers not only diversify the sector but also brings much more competition to specialists.

“I think the market is still in the early stage,” said Su Haifeng, head of VIPKID’s Lingo Bus. The 4-year-old platform claimed it has more than 100,000 learners across 100 countries as of today, and has witnessed a 300% increase in user base. 

But as K-12 giants with sufficient staff and capital enter the segment, he thinks the competition would be intensified.

He told JMD the customer acquisition cost has increased by 200%, but on the other hand, tutor recruitment costs would be decreased as many K-12 companies are laying off employees.

Yao said the overseas Chinese learning market has been rising in the past few years. The arrival of more companies would help the sector grow healthily in the long run, as it has not established teaching and research standards. He added that latecomers need to be aware of the differences between teaching Chinese as a native and second language.

Besides targeting the overseas Chinese people community, these companies are also expanding user groups to other overseas learners.

Overseas Chinese parents have a higher requirement with teaching quality and tutor qualification, while non-Chinese parents focus more on the entertaining teaching process and the exercise of listening and speaking, said Yao.

Chen Yongbo, who had been in the U.S. for more than eight years on edtech product development, shared his views with JMD. In China, he founded Fun China World, an online Chinese learning game designed for overseas non-Chinese users and schools.

He said edtech companies in the U.S. tend to invest more in offerings, with R&D team members accounting a large part. In comparison, domestic companies would like to spend more on operations and sales and marketing. He thinks Chinese companies have an edge in B2C, and overseas counterparts focus more on B2B business.

He noticed that China’s edtech market would become more concentrated, and big companies would become bigger after the regulations on private academic tutoring were landed.

Going abroad to sell education offerings, especially teaching overseas people to learn Chinese, is not the right track for Chinese startups, as they don’t have strength in capital and market competition as big companies do, said he.

“Companies would bring in short-term cash flow by using the domestic model to teach overseas Chinese to learn Chinese," he noted. "But in the long run, Chinese learning isn't a sector that leaves much room for us to imagine, compared with the entire global edtech market.”