Background
Chinese students face fierce competition in school from the very first day of classes. They have no choice but to put nearly all their time and effort into studying if they hope to outdo their fellow classmates. Throughout a student’s career from primary school to high school, they are constantly worrying about getting the highest marks and getting accepted into the best schools. Students from 12-18 right include those who are in high grade of primary school, middle school, and high school preparing for further entrance exam.
As statistics show, in 2011, 490,000 students took the high school entrance exam (Zhongkao) in the Hebei Province, including 96,200 in Beijing. As for the College Entrance Exam (Gaokao), 459,300 students took the exam in Hebei Province, 692,000 in Guangdong Province, and total 9 million all over China. As a result, there is a huge market for preparation courses to help students review or preview lessons for a better understanding of subjects. These courses also help students to develop a specialty, for example, learning to play a musical instrument, to gain added points to their scores on the exam. It has also become a new trend for students who do not perform well in the exam to repeat for an added year of preparation. This gives those test-preparation organizations even more opportunities to expand their markets.
Education segment
The financial crisis also caused investors to pay more attention to the Chinese education industry. The traditional examination-oriented education programs of these training organizations transformed to comprehensive quality education and the number of professional training programs dramatically rose. For example, revenue generated from IT training programs reached four billion RMB in 2009, sustaining a yearly growth rate of 30% for several years. Some training organizations successfully entered into new segments due to the unmet market demand in certain sectors. Recently, electronic supplementary products, high-end private schools, memory training for primary and middle school students, and language training have become very popular. With huge potential and opportunities in education markets, these training organizations can take advantage of this growing market and make appropriate strategies to differentiate themselves from their competitors.
Xin Dongfang (新东方) is a an example of a successful test-prep organization in China. It established a one-stop learning platform which started with English training, but now expanded its reach into more specific segment including preparation courses for English test such as the IELTS, TOEFL, GMAT, GRE, SAT, LSAT for students who want to study abroad and school curriculum training targeted towards primary, middle, and high school students. IELTS training classes is its most popular program and covers over 20% of XDF’s business. XDF has 26,000 employees and amassed three million students throughout China. Now XDF is devoted to strengthening its R&D, improving the quality of products and service, and integrating resources to further push its development in the future.
Daxue Consulting Market Research in China
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Picture Source: Gaokao
