CAS Report: China’s online education market turned up the heat on small-size classes
2021-03-31 22:31:54


Credit: tuchong

Key Laboratory of Big Data Mining and Knowledge Management, Chinese Academy of Science(CAS) recently has unveiled a report regarding online small-size class development in 2020. The report shows that the small-size class's market size is becoming second place among different teaching modes in the domestic online education space, and the large-size class is the top pick by learners amid the COVID-19 pandemic.

As the Chinese government issued a statement encouraging schools to convert to online classes since the outbreak of COVID-19 last year, the crisis has spotlighted the online education market, and remote learning has become the most common way of learning for Chinese students. 

According to the data from China Internet Network Information Center(CNNIC), although the number of online learners has declined to 342 million(accounting for 34.6% of the netizens) last December as primary and secondary schools reopened, the scale still increased 47.0% compared to June 2019.

67.5% of the online learners are from the third-tier and below cities, where the number of online learners and online learning demand has skyrocketed in recent months.

Meanwhile, the Matthew effect has become more obvious that leading online education companies have raised more than USD 11.77 billion in 2020, exceeding the total financing amount of this sector in the past ten years. Moreover, product differentiation has increased market competition, and the market landscape has been more complicated.

Currently, teaching modes of online education include large-size class(20+ students), small-size class(2-20 students), 1-on-1, AI video course, etc. The report from CAS shows that the large-size class is still the most common way, which has been chosen by 62.21% of online learners. 

In the past two years, the small-size class has attracted more learners, and 50.26% of the interviewee have learned this way, but the operations capacities of the small-class brands are quite different. The sub-sector of Mathematical thinking has become more crowded in recent years. According to Bloomberg News, top players are represented by Huohua Siwei and Zhangmen, which are working on U.S. initial public offering.

Compared with 2020, the number of the interviewee with an online course budget of less than RMB 5,000 and more than RMB 20,000 decreased slightly. More than 46% of parents would like to spend RMB 5,000 to 20,000 on their kids' online learning. The report analyzed that the small-size class is most cost-effective. Small-size courses are usually offered at an intermediate price, while the user experience and learning effects are the best among all the teaching modes.

The report also shows that 80% of students come to online small-size brands via word-of-mouth recommendation. Only 13.15% of the interviewees know about the online small-size courses through advertising.

After the COVID-19 crisis, the online education market competition has long been not limited to school subject learning. Facing high industry threshold and mortality rate, small-size classes are challenged by self-owned faculty teams and need to upgrade operation and management capacities continually. As for the further development of companies adopting small-class teaching mode, the report predicted that there would be four major trends:

(1)Benchmarking firms continue to lead the way with continuously building the moat by strengthening the teaching content, faculty, comprehensive services, operating experience, etc.

(2)R&D investment and service upgrades will become critical factors that determine the competitiveness of enterprises.

(3)Users will mainly focus on whether the product can effectively help achieve a good learning effect and deliver good services in all aspects.

(4)Companies are exploring the business to more subjects and competency-based learning.

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