‘Pay-for-knowledge’ is the next online trend in China

Look around you in the Shanghai subway – the smartphone is the number one commuter tool. Not everybody is playing game apps or chatting on social media or listening to music. Learning a language or polishing up a skill have become one of the most popular mobile online activities. Online learning is a new fast-growing market in China.  

The girl occupying the seat next to the subway door is softly uttering English words and phrases. She repeats her restaurant orders and grocery shopping lists over and over again. Based on recent statistics, there must be dozens of other commuters on this train doing the same: using an online app to acquire knowledge.  

Online education is the rising star of today’s smartphone app arena in China, says a report by internet consultancy iiMedia Research Group. Their research has shown that the online education market (aka the ‘pay-for-knowledge industry’) showed sales revenues of 281 billion yuan (€29.2 billion) in 2017 and was expected to exceed 348 billion yuan in 2018 (€45 billion), up almost 24 percent. Based on these numbers, iiMedia Research regards online education one of the sunrise industries in China.  

Fast-growing market 

Hundreds of education companies have seen the trend in time and entered the fast-growing market, such as TAL Education Group and VIPkid, a one-on-one English learning online service. Today, most Chinese smartphones are loaded with dozens of learning apps. The apps give access to thousands of subscription fee-based courses, ranging from ‘how to set up your own WeChat business’ to ‘how to become a successful vlogger’, ‘how to make money as a nail artist’ or, simply: ‘Learning English in ten lessons’.  

Xiaoe-tech, a platform that assists content providers in monetizing digital content, reports that 3.5 million knowledge-based products just like Luo Zhenyu’s went online with the assistance of the platform in the past two years. 

E-learning for all ages 

Although it is mostly the internet-savvy, digitally-minded young people of China that fuel the growth in the pay-for-knowledge industry, the online learning trend applies to all ages of online users in China. iiMedia researchers found that some 37 percent of Chinese users surveyed are willing to pay 101 yuan to 200 yuan (€12.50 to €25) a month for online learning products for K-12 education, which refers to students from kindergarten through the 12th grade. 

These numbers made Hyphen Education, a well-known online after-school tuition service, shift its offline services to the online medium. Hyphen is now specializing in one-on-one livestreaming courses. Through Hyphen's platform, students can take online courses in all subjects including mathematics, English, physics and history. Each class usually lasts 45 minutes to an hour. This move in 2017 paid off as Hyphen has attracted more than 4 million registered users in China so far. 

Artificial Intelligence included 

One of the reasons why the pay-for-knowledge industry picking up is that the products are getting more advanced, due to the use of Artificial Intelligence technology. Hyphen, for example, uses artificial Intelligence technology to recognize and analyze students' responsiveness as well as their ability to grasp the lessons, which could help teachers to adjust their methods. Another explanation for the growth is the rapid development of mobile payments. All major pay-for-knowledge platforms have a built-in payment platform. With a click on the phone, all payments handled by Alipay or WeChat pay. 

Online education is affordable 

And finally: online education is relatively affordable, thanks to competition. In China, there are about a hundred large online learning platforms, each trying to come up with innovative ways to offer knowledge at an affordable price. Online and offline one-on-one consulting services are the most expensive, averaging a few hundred yuan for one hour. Courses with a guest delivering content to a broad audience group (podcast, interactive Q&A or live-streaming lecture session) cost less than 199 yuan, which is just over €25. 

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