What it takes to build a successful education company in China

In Mandarin, the idiom “活到老，学到老” (huó dào lǎo , xué dào lǎo) means that one is never too old to learn.

This is an apt way to describe how attitudes to learning in China are shifting.

“A more holistic approach to personal development and the concept of lifelong learning is increasingly being embraced,” says Tim Xie, chief financial officer at QuantaSing Group (QSG), an online lifelong learning service provider for adults.

Photo credit: Chay_Tee / Shutterstock

The country’s adult learning industry has grown from over US$59 billion in 2018 to more than US$79 billion in 2022, and is expected to reach US$131 billion by 2026. This growth is supported by the Chinese government, which has made “building a society that’s always learning” a national initiative.

For companies in the education space, this presents an exciting opportunity in the wake of stricter regulations around China’s K-12 sector.

However, navigating this landscape is easier said than done.

To understand how firms can successfully tap into this massive industry, let’s take a look at QSG’s journey to build a “syllabus” for education success.

A curriculum for success

An introduction

Founded in 2019, QSG is focused on providing educational resources to adult learners in China.

QSG has three platforms under its umbrella that cater to specific needs within the market:

• QiNiu: The company’s inaugural brand provides online financial literacy courses for adults.
• JiangZhen: This is an upskilling platform that teaches adults video editing, and livestreaming, among other skills
• QianChi: An interest-based platform for those seeking to enrich their lives in their golden years. QianChi offers courses on areas such as Chinese calligraphy and personal well-being. It also serves as an online social community.

Key points of discussion

What makes QSG stand out? After all, there’s no lack of opportunities for adult learners to “go back to school.” Universities, for instance, offer different programs for working professionals looking to boost their skills. Massive open online courses have also become more popular in recent times.

According to Xie, QSG’s focus on top-quality content and a service-driven approach have created “an interactive and enriching learning experience” for its users.

“We prioritize creating high-quality, relevant, and engaging content that meets the specific needs of our target audiences,” the CFO says.

Photo credit: Tirachard Kumtanom / Shutterstock

For example, the firm created QiNiu because it observed a growing need among locals for a better understanding of financial tools and wealth management. It offers comprehensive classes at different levels of complexity on everything from personal financial planning to investments,

In additional, a large portion of QSG’s target audience are working adults with limited free time who are seeking enrichment or entertainment opportunities outside of their jobs. To address this concern, the company breaks down classes into small, digestible sections.

QSG also offers “dual-tutor services.” While class content is delivered by lead instructors, learners also receive guidance from tutors via online communities.

This allows the company to offer learners targeted help and support instead of taking a “one-size-fits-all” approach. Students therefore gain more useful skills and knowledge than if they had just watched an online lecture, incentivizing them to come back the next time they want to learn something.

Assessments

While China holds plenty of opportunities for adult education, one significant hurdle is the country’s sheer size. Around 1.4 billion people spread are across a surface area of nearly 9.6 million square kilometers.

QSG tackles this challenge by focusing its solutions on online learning. Through the use of pre-recorded and live sessions, the firm can accommodate learners from all over the country. This is supported by QSG’s strong technical architecture, which can automatically moderate live chats and route traffic to prevent servers from overloading.

The firm also leverages technology in other areas, such as content development and improving the user experience. For example, its infrastructure allows for new courses to be launched quickly while real-time content monitoring lets instructors gain prompt feedback on their teaching.

Photo credit: Tirachard Kumtanom / Shutterstock

Reaching customers at scale is another issue. Only about 23% of China’s population is under the age of 20, so that means adult education firms can reach out to over a billion people.

It’s impossible to connect to every single person individually, which is why QSG has adopted what Xie calls a “two-sided customer strategy.”

Aside from selling directly to learners, QSG launched enterprise services in 2022. The firm offers businesses training services and guidance in areas such as marketing.

“This diversifies our revenue sources and positions us for sustainable growth,” Xie says. “With this broad market penetration and customer reach, we have a solid foundation for scaling the business.”

Learning outcomes

All of this has put QSG in a good position. The firm has over 103.3 million registered users as of September 30, 2023, a 51.9% increase from the previous year, says Xie. It has also generated around US$119.1 million in revenue for the first quarter of its fiscal year 2024, growing by 31.8% year over year.

QSG successfully listed on the Nasdaq in January 2023 and recently announced its acquisition of Kelly’s Education, an online language education platform, to expand its capabilities.

Photo credit: Chay_Tee / Shutterstock

Aside from monetary gains, QSG has also seen tangible signs of its impact on learners.

Xie shared the story of a JiangZhen user who sells books and beauty products on Chinese ecommerce platform Taobao. After learning video editing on JiangZhen, the seller began making short videos based on popular TV shows, allowing him to express his interests and personality more confidently. In turn, this helped him to expand his follower base and connect with a wider audience, driving more traffic to his Taobao store as well.

Live long and learn

China holds an abundance of opportunities for companies that offer lifelong learning. Continuing education is arguably a necessity for the country, especially as it shifts away from an industrial economy and moves into a more modern and digital post-industrial world.

QSG hopes to play a key role in driving this forward by making learning accessible to everyone.

“We’re certain that we can respond quickly to changes in the larger environment and effectively address the challenges faced by our learners in the years to come,” says Xie.

QuantaSing Group Limited (listed on the Nasdaq under the ticker symbol QSG) is among the leading online lifelong learning service providers for adults in China. Through its services, QSG empowers learners to expand their knowledge horizon and upgrade their skills for a better, richer life.

QSG is looking for investors to support its continued growth. Visit its investor relations website here to find out more.

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This content was produced by Tech in Asia Studios, which connects brands with Asia’s tech community. Learn more about partnering with Tech in Asia Studios.