China’s Online Education Market: Smaller Cities Offer Growth Prospects

70% of China’s school-age population is located in lower tier cities. However, students in these areas are relatively under-served in terms of educational resources, and there is a big disparity in academic performance between urban students and their peers in less developed urban centers and rural areas. As per capita incomes rise and rural internet connectivity infrastructure improves, China’s online education sector is poised to benefit.

China’s online learning market has been growing steadily over the past decade, reaching a market value of RMB 272.7 billion in 2019, from RMB 575 million in 2011, representing a CAGR of more than 15%.

Rising disposable incomes, the perceived importance of a good education, growing competition for good schools and jobs, and a growing number of Chinese students studying abroad (Chinese students studying overseas increased by nearly 9% in 2018) are triggering demand for vocational training, corporate training, language training, and private education.

While online learning may not be suitable for everyone, there are still plenty of individuals who embrace online learning’s convenience of being able to study from anywhere. Research firm Frost & Sullivan sees China’s online education market more than tripling to RMB 696 billion in 2023 from RMB 203 billion in 2019.

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