“Big Chinese” is edtech’s next big thing
In 2017, China’s Ministry of Education released new policies that increased the priority of learning Chinese for kids in the national curriculum and examination lists. Because of this, more parents will be purchasing face-to-face and online training to push their kids to learn the skills for practical examination purposes — not just pure passion for language.
Teaching Chinese outside of China, however, may find it hard to find students or profit in the short run. Not only is there a supply and demand issue, but also the challenges of finding the right teaching model and dealing with local competition.(Learn more about Chinese culture)
VIPKID launched LingoBus in 2017. The company said at a recent report conference that the huge demand for Chinese learning abroad is one reason for the birth of Lingo Bus. According to a white paper VIPKID jointly produced with the Chinese Academy of Sciences, the demand for overseas K12 Chinese learning could hit 200 million by 2020.

Su Haifeng, a high-level officer in charge of VIPKID’s Lingo Bus project, said that registered students for the project have grown to 11,000, compared to the 1,000 they had last year. Currently, the platform has students from 73 countries. The courses limit a lesson to 25 minutes to respect kids’ attention span and add fun learning elements to keep the kids engaged.
“What’s the model’s advantage if local Chinese language institutions abroad can offer courses that are almost as same as Chinese primary schools’ Chinese teaching?” said an industry insider, surnamed Wang (a pseudonym to stay anonymous). Wang used to teach and participate in the management of several Chinese language centers in the US and New Zealand.

Wang also said that the supply for Chinese teaching in many regions of the world — particularly in developed countries — is large. Apart from qualified tutors, Chinese students also offer face-to-face courses or language practice.
“Except for exclusive private language training for business purposes and other premium language tutors, course prices in the Chinese learning market are not that high, and in some markets, they cannot be raised due to sluggish demand,” she added. “In China, you can sell an RMB 300,000 ($43,992.1) English language course set to parents who see English as a practical path to a better school, better job, and even a better future. Abroad? Chinese, to most families, is not a rigid need or a part of the school curriculum. No strong demand, no price-setting or negotiation power.”
Wang added that most language institutions in the New Zealand teaching mainly Chinese are in the red.
Uncertain outlook
VIPKID’s Lingo Bus project is just one year old, and the company’s report on an annual achievement on August 23rd lasted less than 45 minutes, with no specific operation data or any revenue details.
The project is more like a K12 trial scheme in the general overseas Chinese-learning market. A source in the consulting field who had some contact with VIPKID told TechNode that the company is still leveraging capital strength instead of making good profits from courses. They went on to say the company still emphasizes the commercialization of English courses to third-party consulting and marketing groups.
The insider told us that most domestic K12 English language enterprises are not at break-even yet or are facing growth bottleneck. A common strategy they leverage now is common in China: mass capital injection and fast expansion to grab market share first.
On August 2, VIPKID launched a matrix of products which covers English learning needs ranging from family learning projects to kids’ transferable skill building Summer camps. The expansion of education products is very likely due to China’s declining birth rate and the expected shrinking of the K12 market. To keep a leading position and secure potential profit channels, the company is aggressively covering as many education segments as possible.