Introduction: It was beyond doubt that the year of 2020 must be an important time pivot for the education industry. As the COVID-19 spreads since the beginning of this year, education is disrupted globally, but learning cannot be stagnant. In this special year, JMDedu will hold the GET (Global Education Technology) Summit under the theme of “Redefine Learning” to help both Chinese and international EdTech practitioners deep dive into the changes and rebuild confidence.

While what has been significantly changing in China? And where will the opportunities lie in the Chinese education market? In the upcoming weeks leading to the GET 2020 Summit, we will share our insights on how companies and organizations are rapidly adapting to change, as well as explore potential opportunities for further business collaboration. In week 1, let’s start with the fast-growing educational digitalization!

Image Credit: tuchong

If not the epidemic impact, educational digitalization will still be an inevitable trend for facilitating learner experiences in the long run. But the epidemic is just like a catalyst, accelerating what is about to occur in the entire industry. Since 2020, many Internet companies that had no educational plans, and those who have been eyeing the education business for a long time, have been devoted to this market. But the campaign cannot be simply concluded as “promoting the online education amid the pandemic”, the digital upgrade happens everywhere in the educational space.

Popularization of educational information in public schools

In China, education informatization 2.0 advocated by the government has spurred intelligent education as a new buzzword. Since 2019, Internet giants like BAT have started to layout on this track. But no one could predict that teachers and students would face such a paradigm shift due to the COVID-19 that they had to accept and adapt to distance learning. Even after schools' resumption in September, some digital learning and management models have been retained on campus.

But at the same time, the sudden epidemic has also magnified China’s current deficiencies in the promotion of educational informatization: the large gap of infrastructure construction between urban and rural schools, plus teachers’ poor capabilities of using digital equipment and systems. Lecturing online made teachers just be like “internet live-streaming celebrities”. Although the training for teachers in the use of information technology has been carried out during the past few years, schools are aware that they still have a long way to go. 

Firstly, teachers’ innovation ability for future education should be fostered. Thus qualified schools should supportively and actively apply modern information technologies such as the Internet, big data, virtual reality, and artificial intelligence to explore new teaching models. Secondly, schools should focus on teachers’ application of technology to solve problems, rather than skills assessment tests. Thirdly, the improvement of teachers’ information literacy includes not only the transformation of ideological concepts but also practical tasks, including instructional design, multimedia production, and data analytics, etc.

Besides, the epidemic has promoted the cultivation of Chinese students’ awareness of self-learning. This requires the school to unveil supporting education plans, guiding parents to develop their children’s ability to learn independently, manage themselves in their study and life. Educational experts also proposed that in the future, big data and other technical means can be used to form management reports, from which school can understand parents’ concerns and the strengths and weaknesses of each student, then provide individualized guidance.

These services are what the Chinese market lacks, and they are also what Chinese companies need to work hard on. We believe that advanced global practices in these areas are worthy of reference. And the opportunities for overseas practitioners lie in the concept construction of teacher training and provision of experience in assessment indicators and systems.

Market demands for diverse educational SaaS providers

As for after-school private education providers, when talking about digital transformation, first comes OMO. So in this part, we will focus on the flourishing educational SaaS products. As we shared at the beginning of the epidemic, SaaS providers will meet many opportunities in China’s educational space. Throughout the epidemic, many financing deals have closed in this sector, such as ClassIn’s Series B round invested by INCE Capital.

But China’s educational SaaS market is still not ripe with the challenges caused by product homogeneity. The demand amid the epidemic also attracts some platforms which do not cover the education business to provide technical support to live broadcast lecturing, but they need to think about how to retain customers after this critical moment.

At this stage, we think there are two vertical ways for entrepreneurs to run their business in terms of Software as a Service. The first kind is providing digital tools for the classroom. For educational institutions, classroom is the most crucial scenario. Especially for offline education providers, they have always challenged by standardization of teaching and research, chain store management, and leakage of teaching content. After introducing digital tools, all those issues could be solved by carrying on the SaaS system.

The second is a whole package of solutions covering all aspects of the educational business operation, which can link each piece of data, effectively reduce on-the-job training costs, and increase operational efficiency. While it is hard to realize by general SaaS providers. On the one hand, this targeting demand for education companies does not conform to general SaaS business model, they have to make more efforts but achieve less profits. On the other hand, those providers are rarely willing to contribute their data to connect with third-party systems. Therefore, system and channel integrators deep-diving into the education track will have many opportunities in the future.

Industry insiders have analyzed that China’s education and training industry has a trillion market, but there are fewer than 20 listed companies in this space. The main reason is that the long tail accounts for a significant market share, and leading companies only occupies less than 4%. Many institutions are hard to find the way of venture capital exit due to challenges in achieving chain-store operations.

However, SaaS providers can deeply cooperate with institutions through data collection and then select profitable organizations for equity replacement or mergers and acquisitions, increasing their revenue and moving into the secondary market. 

At last, for overseas offline educational institutions that have entered the Chinese market, it is not wise to blindly move towards online amid the OMO trend, because small institutions with homogeneous content will be hard to survive the competition with giants. But offline institutions usually have a coverage of about 3 kilometers, users in this range are always been considered as definite customers, especially in the market out of first- even second-tier cities where giants are difficult to penetrate, such as Taiyuan and Xi’an we introduced previously. Thus in the next piece, we will focus on the lower-tier cities’ market and talk about the necessary reforms of the dual-teacher model under the epidemic. Please stay tuned!