PalFish's Overseas Playbook: Fragmented Southeast Asia, Payment-Channel Risk and AI's Collapse of Content Costs
Li Xiao, who leads international business at Chinese online English learning company PalFish, used a recent education forum co-hosted by Agora and Jiemodui to review five years of expansion across Southeast Asia and the Middle East. His core message: education companies going overseas are not exporting a proven domestic product to crush local rivals — they must relearn how each country treats education, whether as state infrastructure, family investment or impulse consumption.
On market structure, Li pushed back against the industry habit of treating Southeast Asia as one market. "People ask me how the Southeast Asian market is, but Southeast Asia is not a single market — it is ten completely different countries," he said. Indonesia offers nearly 300 million people but relatively low administrative efficiency; Thailand's mature consumer system makes it PalFish's best-performing market for order volume and commercial closure; Vietnam is growing fast and culturally close to China, which also makes it fiercely competitive; Malaysia's large ethnic Chinese population does not translate into a Chinese-language market, as native Chinese speakers make up only about 20 percent; Singapore is a standalone case with its own educational language environment.
That fragmentation means a standardized go-to-market strategy across the region is doomed, Li argued. PalFish now breaks the business down country by country and re-examines local households' willingness to pay. He cited a Vietnamese sales case: a parent selling fruit for a living brushed off an English course as useless, until the local team replied that "without English, you won't even sell fruit well." PalFish now uses AI tools to transcribe, translate and analyze frontline sales calls in real time, turning scattered local insights into reusable models.
Li also flagged a less visible hazard: cross-border payment channels. In 2022, PalFish entered Turkey and reached cost breakeven within four weeks. Then, as local economic volatility and foreign exchange policy shifted, payment channels from European countries were suddenly cut off. "Users wanted to pay but couldn't. Revenue was evaporating at 5 percent a day. Within two weeks, the business was close to zero," he recalled. The lesson: evaluating a market's payment capacity means looking at currency stability, cross-border settlement compliance and real user payment habits, not just GDP per capita.
On AI, Li offered a stark cost comparison: for two decades, producing one minute of professional animated course content cost 5,000 to 10,000 yuan, while the best large models now bring it under 100 yuan — a near-100-fold drop that has turned education into a buyer's market. With "self-developed content" no longer scarce and parents facing high trial-and-error costs, he expects brand trust to outweigh product features as the decisive moat.
On organization, Li rejected the old playbook of opening a new market with a hundred-person subsidiary, noting PalFish once issued about 1,000 offers in the region and retained only three people six months later. In the AI era, he said, simply letting one person do more with AI is linear efficiency; real transformation comes from identifying which roles and workflows AI can fully replace.
On market structure, Li pushed back against the industry habit of treating Southeast Asia as one market. "People ask me how the Southeast Asian market is, but Southeast Asia is not a single market — it is ten completely different countries," he said. Indonesia offers nearly 300 million people but relatively low administrative efficiency; Thailand's mature consumer system makes it PalFish's best-performing market for order volume and commercial closure; Vietnam is growing fast and culturally close to China, which also makes it fiercely competitive; Malaysia's large ethnic Chinese population does not translate into a Chinese-language market, as native Chinese speakers make up only about 20 percent; Singapore is a standalone case with its own educational language environment.
That fragmentation means a standardized go-to-market strategy across the region is doomed, Li argued. PalFish now breaks the business down country by country and re-examines local households' willingness to pay. He cited a Vietnamese sales case: a parent selling fruit for a living brushed off an English course as useless, until the local team replied that "without English, you won't even sell fruit well." PalFish now uses AI tools to transcribe, translate and analyze frontline sales calls in real time, turning scattered local insights into reusable models.
Li also flagged a less visible hazard: cross-border payment channels. In 2022, PalFish entered Turkey and reached cost breakeven within four weeks. Then, as local economic volatility and foreign exchange policy shifted, payment channels from European countries were suddenly cut off. "Users wanted to pay but couldn't. Revenue was evaporating at 5 percent a day. Within two weeks, the business was close to zero," he recalled. The lesson: evaluating a market's payment capacity means looking at currency stability, cross-border settlement compliance and real user payment habits, not just GDP per capita.
On AI, Li offered a stark cost comparison: for two decades, producing one minute of professional animated course content cost 5,000 to 10,000 yuan, while the best large models now bring it under 100 yuan — a near-100-fold drop that has turned education into a buyer's market. With "self-developed content" no longer scarce and parents facing high trial-and-error costs, he expects brand trust to outweigh product features as the decisive moat.
On organization, Li rejected the old playbook of opening a new market with a hundred-person subsidiary, noting PalFish once issued about 1,000 offers in the region and retained only three people six months later. In the AI era, he said, simply letting one person do more with AI is linear efficiency; real transformation comes from identifying which roles and workflows AI can fully replace.
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