The YY webpage showing the various classes available on the platform. (Photo/YY Inc)
The market scale of China's online education sector reached 92.4 billion yuan (US$14.9 billion) in 2013 and is expected to post rapid growth at a pace of 30% a year to over 160 billion yuan (US$25.8 billion) in 2015, reports Guangzhou's Time Weekly, citing figures from China-based consulting firm iResearch.
Nearly 1,000 additional companies tapped into the online education sector in 2013, with an average 2.6 new entrants reported per day, the paper said. Chinese internet giants Baidu, Tencent and Alibaba have begun building their respective online learning platforms and have proactively invested in e-learning companies or products in the meantime.
Other domestic internet firms, such as Sina Corp, NetEast and YY have also launched their respective online learning products.
Despite the popular concept of online education, the existing internet courses are limited to language learning and preparing for exams. Some individuals from the industry stated that these courses merely provide online training rather than actual online education.
On Feb. 25, Guangzhou-based YY, whose market value is pegged at over US$4 billion, announced that it will enter the web-based education sector and said that it planned to invest 1 billion yuan (US$161 million) in the sector over the next two years.
"I saw the serious smog problem when I arrived in Beijing, which strengthened my belief that online education will definitely become a trend," said YY CEO David Xuelin Li, adding that soon no one will be willing to go outdoors in the heavy smog.
Also in February, Taiwan-based TutorGroup raised US$100 million from Alibaba, Singaporean investment firm Temasek and Qiming Venture Partners, which was the largest amount of capital received by the e-learning firm.
Since January last year, 48 online education companies have each raised capital worth millions of US dollars. Further, capital worth a billion yuan (US$161 million) was invested in the online education sector in February this year.
A partner at a consulting firm noted that the key to achieving success in the industry is to develop content rather than simply copy others.
Meanwhile, the majority of e-learning institutions in China are English-learning platforms, the paper said. According to the Ministry of Education, there are about 300 million Chinese nationals aspiring to learn English, with the number of such training organizations being pegged at 50,000 and their market value estimated to be 30 billion yuan (US$4.8 billion).