In 2019, when China’s internet technology sector experienced massive layoffs, NetDragon(HKSE: 0777) still continued strong growth amid the winter chill of the industry.
In 2020, as the coronavirus spreads across the world, NetDragon has witnessed a growth by creating a cloud classroom to support remote learning with an “Engaging+Efficient+Effective” form for the future of education.
As of now, NetDragon has expanded its footprint to 192 countries, covering more than 100 million users, over 12 million teachers, and more than 2 million classrooms. Meanwhile, NetDragon has offline education product sales channels in more than 150 countries with more than 100 million online registered users from overseas markets. In this article, JMDedu aims to show our readers how a China-based online gaming innovator can make educational achievements in the complex overseas market.
Epidemic brings opportunities for going overseas
This March, to ensure the educational activities can normally proceed, UNESCO has advocated distance learning to combat the crisis and provided a list of educational applications and platforms, in which Edmodo has been involved.
Acquired by NetDragon on April 8th 2018, Edmodo provides communication, collaboration, and training tools like a global education network. Amid the epidemic, the product as a global leading online education community has been selected by the Ministry of Education in the Arab Republic of Egypt to be the designated remote learning platform, serving more than 22 million students and 1 million teachers at the K-12 stage. Plus, the number of its users has grown rapidly in overseas markets such as Italy and Spain.
One-stop Learning, a comprehensive education informationlize system built by NetDragon, also witnessed an MAU increase by more than 20 times, covering a majority number of users at schools and homes.
COVID-19 crisis makes working from home and remote learning a temporary rigid demand worldwide. Xiong Li, CEO of NetDragon, believes: “An increasing number of companies will commit themselves to connecting people in corners of the world by technology. It is a rare opportunity for Chinese Internet companies to expand overseas business.”
He also puts forward that the downturn of the global economy has directly influenced Chinese companies’ overseas footprint, the most important of which is reflected in the supply chain, product export, risk control, and human resource management. “But I don’t think this will be a long-term impact because Chinese Internet companies have more experience of OMO that the huge demand in domestic market spurs technological innovation to be applied more quickly. Of course, we cannot deny that the international situation is very complex at the post-epidemic stage.” Says him.
Always pursuing blue-ocean market-creating moves
When the world just ushered in the mobile Internet era in 2010, NetDragon saw an opportunity to combine the education with “Internet Plus”. On the one hand, AI and digital technology were changing the innovation landscape. On the other hand, China has proposed the plan of Education Informatization 2.0. “At that time, most of the industries have been changed amid the Internet era, but the education sector still has great space.” Says Xiong Li. Therefore, “pursuing a blue-ocean market and deep diving into it, then gaining a double growth”, this is the core of NetDragon’s understanding of business.
Since established, NetDragon has focused on the field of online games, then immediately founded its educational subsidiary Elernity, representing that the company has officially tapped into the market of “Internet+Education”. After that, NetDragon has extended its footprint by successively acquiring several leading EdTechs worldwide, including the Promethean from the UK, American company Jumpstart, HongKong-based Cherrypicks, and Chivox in Suzhou, China.
“Whether to make learning easier and more efficient is the key to the success of the integration of technology and education.” Xiong Li regards. At K-12 learning stage, technology is suitable to be introduced into experimental courses like those dangerous chemical experiments, because a “virtual explosion” could be acceptable if there are any mistakes of the process. After embracing VR and AR technologies, NetDragon has invested in Canadian company ARHT MEDIA, tapping into the holographic projection technology business in 2016.
Xiong Li points out that investing in such a company is just because the technology is a “new package of solutions” for the future of education. What NetDragon considers when investing or acquiring a company is a comprehensive business layout, including both software and hardware.
For example, acquiring Promethean is not only for interactive displays and lesson delivery software but also for the product’s added value. Xiong Li is very clear about the company’s future direction: “Firstly, we want to penetrate the classrooms through the electronic whiteboard with content and system. Then we are going to obtain users’ learning data and develop a profit model.” Such a way of thinking enables NetDragon’s education business to perform well, and approximately 80% of the company’s income in the 2018 fiscal year is from the overseas market.
“We are always following the market trends. It is not because we want to go overseas or we are very lucky. We just transfer NetDragon’s educational understanding after acquiring and bridging multiple overseas channels.” Xiong Li concluded, “We only play the role of accelerating their products to occupy the global market quickly.” This March, NetDragon’s report of the 2019 fiscal year showed that the annual income was RMB 5.793 billion, an increase of 15.0% year-on-year. And the revenue from the education business was RMB 2.395 billion, accounting for 41.3% of the company’s total revenue.
Capturing different markets with flexible strategies
With a clear positioning of “technology + education” and a stable layout towards the whole package of educational solutions, NetDragon is always keeping up with the latest trends and moving forward, and responding flexibly to the needs in different scenarios.
Pop-up Classroom, which has been launched by NetDragon in 2019, is undoubtedly the product driven by the market demand, providing children in developing countries or unprivileged areas with access to quality education. As a modular “smart classroom”, “it can be combined to create the required learning environment – rapidly delivering fully functional classrooms with all the essential equipment and technology to support the delivery of first-class education,” introduced by NetDragon. In the same year, Nigeria has signed a memorandum of cooperation with NetDragon on the procurement of 10,000 “modular classrooms”, and Egypt is also planning to purchase a large number of such classrooms in the next three to five years.
In 2017, the company built more than 10,000 smart classrooms in Moscow precisely due to the construction of the smart city that year. Based on abundant experience, NetDragon gradually explored its own business growing path——developing good products and content, then following the market trend through its global channels and sales agents.
Aiming to advance the education of half of the world's population
During the past few years, NetDragon’s education map has covered the globe and empowered education through AI technology to improve education efficiency and promote educational equity. The year 2020 is not only the time pivot for NetDragon to develop AI technology but also for its education business to go public.
In 2018, Elernity announced that it would be separated from NetDragon for an independent listing on HongKong or the US in the next one to two years. Facing the challenge brought by the epidemic, a relevant person indicated that the listing process would not be blocked, but the specific time has not yet been determined.
Making great efforts to deploy “AI+education”, NetDragon is expanding its footprint to more countries, provinces, cities, schools, and individuals. “We are aiming to provide users with digital educational solutions and services, including platforms, content, software, and hardware. We hope that in the next 20 years, NetGragon can advance the education of half of the world’s population by forming a larger global learning community.”