State of the Online Chinese Learning Industry
I started learning Chinese 10 years ago. Now I devote my life to sharing my passion for the Chinese language and the Chinese culture by creating products which bring authentic value for people learning Chinese.
In this article, I share my view and insights about the Online Chinese learning industry based on personal research and discussions with experienced professionals.
Great Business Opportunity
Learning Chinese has never been so trendy. There are today around 40 million people learning Chinese worldwide, and this number is expected to reach 100 million in 2020, following a steady 20% increase per year.
This enthusiasm is easily explained by China’s comeback as one of the world’s most flourishing economy. Skills in Chinese language can today bring great opportunities for people and are highly valuable for companies.
Learning Chinese is still quite new compared to other languages.
- There is a lack of qualified Chinese teachers and quality resources all over the world.
- There is no standard method to learn Chinese.
- The HSK (汉语水平考试) is the only Chinese language proficiency exam and is only starting to get recognition from schools and companies.
Governments from all over the world are investing in Chinese language.
- In September 2015, President Obama announced a new nationwide program called the “1 Million Strong Initiative” to grow US Mandarin study by five times and see 1 million American students studying Mandarin by 2020.
- Kevin Rudd, the former Australian Prime Minister, was fluent in Mandarin and his influence over the educational system made Australia a leading country in Chinese learning.
- China keeps opening more Confucius Institutes in all continents.
From a business point of view, this looks as an ideal opportunity: huge demand, immature supply and obvious signs of future growth. But the reality of the market makes it particularly difficult for any project to succeed in this industry.
Quest for a profitable product/market fit
It is extremely difficult to create a product/market fit within a valuable pool of users in the Online Chinese learning industry. There are two reasons for that:
- People learning Chinese do not know what they want. Learning Chinese is not easy, and so far there is no standard way of learning it. Most people starting to learn Chinese have no idea where to start from or which method would provide better results in the long run. As a result, it is extremely difficult to define a value proposition for users.
- The market is completely segmented. People learning Chinese can still be considered as a niche market when compared to other languages such as English. And yet, there is an incredible diversity of learners, each group potentially expecting a different value proposition. Here are four ways to segment the market:
- Native language. Most projects focus on one language. For example, 8Belts is a website teaching Chinese to Spanish speakers.
- Chinese level. The needs and expectations of Chinese learners are very different according to their level. Most projects choose to focus on beginners, as it is the biggest group of potential customers (and also the easiest one to trick into buying low quality products…). Chineasy is clearly focused on complete beginners, taking advantage of the common idea that the Chinese language is considered too difficult to learn. (For more details about what I think about this project, I wrote a specific post).
- Interests. People chose to learn Chinese for different reasons. Projects can focus on students studying abroad, professionals working with China, people interested in travelling to China or interested in Chinese culture, etc. I will let you guess what the main motivation of people learning Chinese on SexyMandarin is.
- Age. Kids, teenagers and adults need a different learning experience. Some projects have noticed than many older people are starting to learn Chinese to keep their brains working (learning Chinese requires specific memory efforts). Miss Panda Chinese positions itself as Mandarin Chinese for Children.
As a result, many entrepreneurs are lost in choosing the correct value proposition. Which group of learners to focus on? How to develop a product that satisfies users if they are not even aware of what they actually need to reach their objectives? And wait… do they even have clear objectives anyway? In this situation, it is very difficult to develop a product being both economically profitable and bringing real value for Chinese learners.
This is why most projects end up falling into the following three business traps.
Three Business Traps
Trap #1. Getting too strong public support (=using the lack of understanding from governments). Many projects and organisations are supported by governments or entities the primary mission of which is to promote the Chinese language and culture. The most obvious example is Hanban (汉办), an entity from the Ministry of education of China which is mainly known for developing Confucius Institutes (孔子学院) and the HSK (汉语水平考试, Chinese language proficiency exam). Organisations like Hanban happen to provide some support to some projects promoting the Chinese language online. Unfortunately this rarely brings real value to people learning Chinese, for two reasons.
- First, those entities often do not have strong expectations in terms of actual success of the projects. They are often more concerned about how to spend their annual budget and secure a new budget for the following year.
- Second, I doubt that the skills and efforts required to develop relationships among those entities are the same as the ones required to run an innovative Internet startup bringing value to Chinese learners.
Trap #2. Going for all in marketing (=using the lack of understanding from users). Many projects fail to bring real value to Chinese learners. Hence the fact that the only way for them to continue attracting new users is to spend more and more money in marketing. The results of this behaviour is obviously very bad for Chinese learners.
- The messages sent to learners are often lies (learn Chinese in three months, learning Chinese is easy, etc.).
- All this money invested in marketing means that less (or no) money is invested in developing an innovative product.
- It makes it harder for innovative and high-value products to reach Chinese learners.
This trap is very common for traditional websites providing Chinese contents (lessons) and selling it for a fixed price.
Trap #3. Claiming fake innovation (=use the lack of understanding from investors). I have seen many teams in the Chinese language industry pitching their project to investors. Unfortunately, products with great potential for users are hard to introduce to investors in ten minutes. Investors (rightly) prefer simple, clear concepts that can bring a great number of users in a short period of time. But the reality of learning and teaching Chinese is much more complex. Hence the many teams who try to combine Chinese learning with hot trends or buzzwords from the entrepreneurial scene. This is actually a good idea, as long as there is a real educational purpose behind it, which is rarely the case. I am convinced that in the following years we will see numerous projects trying to match Chinese learning with virtual reality, chatbots or IOT. Here are three double-edged combinations existing today:
- Chinese language + Gamification. Sure, making a product pleasant or funnier to use cannot be bad. But it is dangerous to make gaming objectives and mechanisms taking the upper part on the actual learning experience. I believe the real value in this industry lies in bringing value and getting approval from people who consider learning Chinese as a long-term objective. Gaming mechanisms are well known and can indeed bring a consequent number of users and keep them busy for a long time. But those users will often be more interested in the gameplay and its rewards than in actually learning the language. Promising project in this category: Ninchanese.
- Chinese language + Machine Learning. There is a room for improving the efficiency of how people learn Chinese. Analysing learning processing, optimising study time in spaced chunks of time, providing customised content based on users’ interests and levels are nice challenges that can substantially improve the way people learn Chinese today. But in order to succeed, those projects need a strong team and a consequent number of users, which is not easy to get when starting a new project. Promising project in this category: ChineseMe. I might be biased about that one!
- Chinese language + Video Chat. There is a lack of talented Chinese teachers all around the world. The idea of connecting students with teachers using video calls is pretty simple and valuable. The only issue is to provide real added value built on this concept, as users can always get the same result using any existing video call such as Skype. Promising project in this category: Pandarin.
Two Examples of Dubious Projects
MandarinTalk is a mobile App supported by the local government of Shanghai. This is my favourite example of cash burning in this industry. From a technology point of view, their App looks awesome and very well realised. But from a UX point of view, it is just incredibly complicated and I am not even sure how users could possibly use this App more than a few minutes before forgetting about it forever. Checkout this video from the project team to discover how (not to) use MandarinTalk App.
If you’re reading this article, I don’t think I need to introduce Duolingo, a free language learning platforms with more than 120 million users worldwide. With this huge demand for Chinese language, you might be surprised to notice that this platform does not provide Chinese courses. Actually this is a wise decision since the Chinese language is a very unique language that would require substantial modification from Duolingo’s standard experience. This situation led to the development of ChineseSkill, a complete copycat of Duolingo adapted for Chinese language, developed by a team in Beijing. The professionalism of the team and blind support from Chinese VCs led to a fast evolving and growing mobile App with nice design and addictive UX. While many users praise this App for its great UX, its efficiency still needs to be proven. And unfortunately for ChineseSkill’s investors, they forgot that by creating a copycat of Duolingo, they also inherited from a project with no clear source of revenues.
Chinese Learners Deserve More Than That
Today, no project has secured a strong hold and recognition in users’ mind. Here are key elements that I believe are necessary to make the difference in this industry.
Passion. Too many teams and investors decide to go for this industry because of the business opportunity. But the complexity of this industry makes it almost impossible to succeed for teams without real passion for the Chinese language. Moreover, the business dimension will become too obvious for users and the project will most likely fall into trap #2.
User first. Develop a product for Chinese learners, instead of spending money on marketing and make profit on people’s lack of knowledge on how to learn Chinese. OutlierLinguistics is a nice example of a team working on a great project, backed up by the Chinese learner community via Kickstarter.
Solving real problems. Bringing values to Chinese learners can only be achieved by improving the way people learn Chinese and focusing on specific needs. Ideally, a great App or platform should become part of the daily learning experience of Chinese learners. The best example is Pleco, a dictionary App that is used daily by millions of Chinese learners all over the world.
Focusing on long term. This industry is still in its early stage. It can be tempting to chose to focus on beginners only and make profits on one-shot sales. But I believe that most of the value and recognition comes from educating users and keeping providing them with high quality features and content on the long term.
Right equilibrium between Chinese, IT and business. Many Apps are great from a UI/UX point of view but are terrible from an educational point of view (again, see MandarinTalk). Passionate people start great projects but lack business strategy to make it viable and to keep developing their product (see Hanzicraft). Lastly, the most innovative experts about Chinese language teaching are often lacking interest for business or IT considerations.
Innovation. Internet-based innovations can bring terrific value for Chinese learners, under the condition that those innovations are integrated into a product that addresses real learning problems. As long as the core value is focused on educational purposes, many ideas can help create products that still do not exist. Some of those ideas are personalised learning experience, the use of big data, spaced repetition, gamification, social networks, video chat, etc.
I hope this article can be useful to you. I can’t wait to see amazing products going live for Chinese learners!
I’m creating the world’s most effective course in Mandarin Chinese. Have a look and help me improve it! ChineseMe
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