Article

The race to capture China’s online learning market

September 12, 2013 by Nick Compton

Ask Shrek Qie about the potential for online education in China and his eyes will widen before he unleashes a string of breathless superlatives. “It will change China,” the 35-year-old, Beijing-based tech founder says. “Right now, the higher education system is broken. Everyone knows that. The schools offer worthless courses, worthless degrees, and when it comes time to find a job, the students have no real skills, so employers don’t want them.”

The answer to this, for Qie at least, is online education. A year ago he founded wyzc.com – wo ying zhichang – roughly translated to winning at the job market, as a web-based IT education platform that trains students in 15 skill areas, from computer programming and app development to multimedia design, and then aids them in the job search upon their certification.The site has attracted more than 30,000 users, and in June secured 2 million yuan (HKD 2.5 million) in funding from Beijing-based angel investment firm ZhenFund.
Qie is not alone in his beatification of online learning in China. In the past two years, according to the Wall Street Journal, around 10 Chinese online-learning platforms have secured angel investments, and several of China’s internet titans –Baidu, NetEase, and Alibaba – have all entered the fray, either buying stakes in online education firms or starting their own online education divisions.
The market for these platforms, in a country obsessed with learning and with more than 590 million net users according to government statistics, is proving irresistible.
Revenues reaped from China’s online learning firms grew from 60bn yuan in 2011 to an estimated 72.3bn in 2012, according to Huidian Research Group, a business consultancy and market-survey firm. Yu Minhong, Co-founder and CEO of New Oriental, China’s largest English-training school by revenue, predicted at an industry forum in May that in 3-5 years, 40% of China’s education market would be online.
The rub is that China’s online-learning marketplace as it exists now is rife with scammers pining for a fast buck, and geared towards language learners and test takers, offering mostly tech 1.0 interfaces with minimal student-instructor interaction. The type of high-quality courses offered by massive open online course (MOOC) providers, like Coursera in the US, are just beginning to make inroads into the Chinese market, despite signs this is changing.
“I think the biggest challenge for China is a philosophical one, and that is what kind of learning is going to be relevant for it in the future.” Dr. Tony Bates, an authority on online learning and distance education who has given keynote lectures and consulted at institutions in Beijing and Hong Kong, wrote in an email.
“E-learning is really just a delivery mode…given the size of its population and the demand for education, China really needs to use all methods- high quality, campus-based institutions, using both online and face-to-face teaching, and mass delivery of courses over the internet…the challenge for China is less about mode of delivery and more about what kind of teaching and learning for what kind of audience or market.”
In July, Coursera, the U.S.’s largest MOOC provider, with more than four million users, announced plans to enter the Chinese market by establishing ties with Shanghai Jiaotong and Fudan Universities to offer select courses in Mandarin. As of now, the contract has not been agreed upon, and talks are ongoing, a spokesman for Coursera wrote in an email. Then earlier this month, in what is a first, Coursera announced that it had partnered with Peking University to offer three classes taught in Chinese.
“I believe in China, e-learning can serve as many, if not more purposes than it does in the United States.” Said Qi Li, Professor of Higher Education at Beijing Normal University. “However, if it is intended to operate as a business enterprise, it must address the needs of its consumers while meshing with the current educational system in China.”
Two years ago, NetEase, China’s third-biggest net portal site, partnered with the OpenCourseWare Consortium, a collective of worldwide universities led by MIT that offer courses online for free. NetEase helps translate courses, mostly taught in English, for Chinese learners and makes select content available, including a handful of courses from Chinese universities. However, the selection is limited, translations are often unreliable and real-time interaction is all but absent.
Other challenges, like lagging net speeds, particularly in rural areas, and unclear government priorities when it comes to online learning are dogging development, Bates said.
“The issue is whether this is the kind of instruction that the Chinese intellectual and political leaders are wanting to encourage. More recently, the Chinese Government in particular has shown a lot of interest in curricular approaches that encourage social learning, critical thinking skills, and creativity. Unfortunately Coursera-style MOOC’s don’t really support this”, Bates said.
With some surveys indicating that up to 30% of Chinese college graduates were unable to find a job this year, Shrek Qie thinks online learning is the medium that can close the knowledge and skills gap bedeviling both employers and graduates.
“So many people in China don’t have access to education, at least not worthwhile education,” Qie says. “If you have good teachers, good instructors, teaching skills that are in demand by employers, it makes education fairer for everyone.”
Although remote learning with a focus on vocational skills has been available through the Open University of China since at least the early 1980’s, nothing has the power to democratize China’s rigid, test-heavy education system like the internet, Qie says.
A slew of other group-based discussion forums and content sharing sites have sprung up that play on this idea, most prominent among them YY.com, a video-sharing and networking site that launched a successful IPO in Nasdaq in 2012, and has since experienced a steady climb in share price.
Still, Li Peng, a 24-year-old June university grad, is not sold on the principle of online education. Li recently taught an online course for undergrads at Beijing Language and Culture University (BLCU) and has taken free online courses in justice and Chinese law.  “The students don’t take it seriously.” Li said, about the course at BLCU. “As far as I know, they seldom use the online courses. They just pay the tuition, then take the exam, cheat, and then get a certificate.”
When asked if he would consider paying for online courses provided by services like Qie’s wyzc.com, he doesn’t hesitate.
“I can’t imagine that. Why would I pay for something while we are already in an era that almost everything online is free?”
Other skeptics point to the limits of learning through a computer screen, and wonder whether online learning will ever be a “game changer,” as Liu Jian, a PhD candidate at the Center for Study of Contemporary China at the University of Pennsylvania, predicts.
“Online learning is to actual learning what Facebook friends are to actual friends,” American Linnea Damer, a frequent Coursera student says. “I use this for myself, just to learn. Not to earn a certificate, or get a degree, but just for the knowledge. In that respect, it’s useful, but you can’t expect to master any content by just taking online courses.”
For all the detraction, Shrek Qie is not dissuaded.
“There has been so much talk about achieving the Chinese Dream,” Qie says. “Without fair education, online education, how can that happen? Maybe internet education is the new Chinese Dream.”



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