In 2030, the size of the entire Chinese education industry is expected to double from now, reaching 1.66 trillion euros. Especially in the market for primary and secondary education (K-12), a surge is anticipated.
The prediction can be found in a recent forecast for China’s consumption from the US financial services company Morgan Stanley.
Finn-Sino’s Chinese media partner, Rayee ACE – one of the largest insight providers for China’s education market – went through the document to find the most interesting points (link in Chinese) regarding the Chinese education sector.
K-12 education market growing to almost 357 billion euros
According to the report, the entire Chinese education industry will see structural growth in the future.
K-12 after-school education or tutoring constitute the fastest-growing piece of the education pie. It will maintain an annual growth rate of 11 percent, and by 2030, the market size will reach nearly 356.97 billion euros.
In terms of K-12 education, the main reason for the maintained rapid growth by 2030 is an increase in the penetration rate of education and training in China. The rate is projected to go up from the current 30-40 percent to more than 50 percent in 2030, Rayee ACE reports.
The continuous growth in primary and secondary education penetration in China is in large part driven by the country’s high school and university entrance examinations, based on academic performance and selective admissions. Due to the hard exams, the students’ demand for off-campus tutoring will continue to grow, the forecast said.
At the same time, Chinese families’ incomes rise, so though the population will decline, the amount invested in the studies of each student will increase.
The Morgan Stanley analysis shows that since 2018, the monthly spending on after-school tutoring by families in first-tier cities in China has increased by 47 percent, accounting for 8 percent of the household income.
In lower-tier cities, the willingness to invest in after-school tutoring is slightly higher than that of first-tier cities (accounting for 9 percent of household income).
Online education development entering the fast lane
The report shows that due to the COVID-19 pandemic, the K-12 online after-school tutoring market will grow by 50 and 34 percent in 2021 and 2022 respectively, reaching 42,6 billion euros.
This growth stems from parents’ increasing emphasis on the cultivation of students’ online learning habits. Coupled with advancements in technology and higher acceptance of online learning, the quality of online education experiences has become better and better, Rayee ACE notes.
The pandemic has accelerated the growth of the K-12 online after-school tutoring market that is expected to continue the growth to reach 15.98 billion euros by 2030.
The fast development of online education means that second- and third-tier cities in China have gained access to high-quality educational resources.
Online and offline studies merging
The integration of online and offline education plays a an important role in meeting the different needs of students.
Offline education is indispensable for daily courses, and the online options present an attractive alternative to parents who have less money to spend on education.
The integration of the two types of teaching, known as online-merge-offline (OMO), also gives a good synergy for the entire Chinese education and training industry.
According to the report, most students and parents expressed their willingness to continue using online courses after the epidemic.