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Online education market in China - statistics and facts

The coronavirus pandemic has created a situation where online education has reached a new level of widespread use and user recognition in China. At the same time, competition among companies is fierce and the market shows various signs of becoming oversaturated. With so many newcomers taking advantage of the newfound need for online education, a certain kind of consolidation might be inevitable after the pandemic.

Over the past five years, online education has seen robust market growth in China. Due to the pandemic, growth accelerated significantly in 2020. However, as many offline providers extended their services online, and new service formats are being developed, the actual size of the online market is difficult to assess. According to a broad market definition, including online education tools and apps, online education in China reached a market size of around 423 billion yuan in 2020, with a user size of 331 million. When employing a narrow definition including only to-C education courses and services, a market estimation of around 257 billion yuan might be more realistic.

In 2020, investment in online education companies saw a new boom. When looking at investment events in China, the value of investment in online education companies reached 539.3 billion yuan, more than in the four preceding years together. At the same time, most of the companies were making losses, and the money raised was mainly being used to increase the user base. As most of the money is invested in large companies, and many smaller online and offline education providers face severe difficulties, market concentration is likely to increase in the future.

Backed by growing user recognition, online education in China has seen many innovations in recent years, most prominently in the field of online-merge-offline formats (for example the double teacher classroom format), and AI implementation. At the same time, the Government is tightening market regulation in order to ensure user safety and educational quality. Although market growth rates are forecast to cool down in the upcoming years, online education has obviously reached a new level of development in China.



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