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Millions of Chinese pay for virtual vocational courses, invest in themselves with architecture, design among popular choices Tan Qiang, 36, from Qimen, Anhui province, recently completed a one-time online photography class. The 54-minute
session cost him 185 yuan ($23.5). Although he works hard at a factory
for his keep, he still jumped at the chance to take the course. "It was during
the pandemic that I realized having a skill is a must. I took the class
to be a part-time, even full-time, photographer later to add a source
of income for the whole family," he said. Millions of
Chinese like Tan are paying for online vocational courses and investing
in themselves, where they seek new skills to improve themselves,
especially when the country is undergoing a huge industrial upgrading
and transformation after the COVID-19 pandemic. As a
shutterbug, Tan was always asked by his family members and friends to
take pictures of them. Given the factory he worked at has laid off many
workers due to a tough period caused by the pandemic, Tan decided to
develop his interest into a marketable skill. In China, the
online vocational education market has been booming at an unprecedented
rate in recent years, with demand for vocational skills enhancement on
the rise. According to a
report by market consultancy iResearch, China's vocational education
market is expected to hit 19.19 billion yuan this year, of which the
online vocational market has been soaring 20 percent per year. "The online
vocational education market will become the mainstay. The average
revenue per user will gradually increase as heavy training replaces
light training," said Ge Wenwei, partner of Duojing Capital. "The market
will continue to boom and will have a higher penetration rate than the
K-12－kindergarten to 12th grade－period," Ge said. The iResearch
report said COVID-19 has put online vocational education in the fast
lane of development, which is likely to greatly accelerate the overall
online education development. According to a
report released by Tencent Classroom, an online vocational education
platform by tech giant Tencent Holdings Ltd, users paying for medical
and healthcare classes have seen strong recent growth. Architectural
engineering, graphic design, practical English, medical and healthcare
and artistic painting are among the top 10 most popular course
categories. Tencent CEO
Pony Ma has called for accelerated efforts from famous schoolteachers
and training institutions to develop online classrooms to allow society
to "vigorously develop online vocational education". "The main goal
is to help various groups to improve their business skills and increase
employment opportunities, especially with the development of the
industrial internet and the acceleration of digital transformation and
upgrading of the overall economy," Ma said. He said
emerging technologies are accelerating the integration and innovation of
different traditional industries, giving birth to a large number of
emerging occupations. "The country
is seeing urgent demand for high-quality compound talent with strong
practical ability and innovation ability, such as 5G, artificial
intelligence, the industrial internet and other new jobs," Ma added. The State
Council earlier launched a document targeting reform of China's
vocational education system, which strongly advocates for the
integration of industries and education by encouraging universities and
enterprises to work together to deploy training plans. Moreover, the
reform also unveiled a pilot program－"1+X "model－utilizing academic and
vocational skill level certificates to encourage students to acquire
more skills while obtaining a diploma. "1" symbolizes
a strong foundation of knowledge via traditional degrees, and "X"
stands for embracing the future, represented by vocational certificates. In the online
vocational education market, exam training continues to be a significant
portion, where consumers, mostly students, take courses to prepare for
the national civil service exam, public institution exams and graduate
school exam. Hou Yue, 25, a
graduate from Nantong, Jiangsu province, recently shelled out 8,000
yuan for an online training for her postgraduate exam. "Those
high-quality offline classes related to the postgraduate exam are often
held in top-tier cities. The cost is high for students like me as we
have to pay extra money for transportation and lodging. But now I can
take such online courses anywhere and anytime. Tutors from online
vocational platforms are also some very famous teachers who have worked
in the area for decades," she said. Compared with
the K-12 education market, characteristics of the vocational market are
mostly part-time employees or students who take the initiative to learn,
said Lyu Senlin, founder of Guiding Light Think Tank, an education
consulting company. "They are suitable for the online teaching model which breaks limitations of time and space," Lyu said. A report
showed that only 5 percent of employees have a bachelor's degree or
above, leaving huge space for online courses aimed at helping people
pass through key exams, experts said. Such demand
for higher degrees or career advancement has boosted vocational
companies like Offcn Education Technology Co Ltd and Beijing
Fenbilantian Technology Co, which both have seen significant growth
these past few years. Fenbilantian, better known as Fenbi, announced in February that it raised $390 million in its series A round of fundraising. Led by IDG Capital and Trustbridge Partners, the new round attracted several other key investors. "After the
pandemic, we switched part of the offline business to online education
and have quickly developed more all-around plans offering online courses
for students to choose from," said Zhang Xiaolong, CEO of Fenbi. Founded in 2015, the company leverages internet technologies to offer professional training and tutoring for key tests. "Such measures
have boosted business. More than 80 percent of our offline users have
chosen to switch to online options and revenue from its online business
has increased 100 percent since the adjustments were made," Zhang said. While the
online education industry continues to boom, Zhang Lijun, an education
veteran and partner of Sinovation Ventures－a venture capital firm
founded by famous investor Kai-fu Lee－pointed out that many challenges
still exist. "It will be
difficult for companies to retain users on a sustainable basis and for
them to become loyal customers after the pandemic. Whether the online
education sector is likely to replace offline businesses in the long run
remains to be seen," she said. Gao Yan from
online vocational livestreaming platform Xuehui added that although
people have learning goals and the willingness to invest in themselves,
the renewal rate is usually low due to limited time and energy. "Solving the
problem of low user renewal rates has become a challenge for many
vocational education institutions. Online vocational education
institutions should rethink their profit model to check whether they can
go deeper into a certain segment," Gao said. "They are
expected to develop products and services that can be repurchased by
users so as to improve the LTV, or lifetime value of vocational
education users," Gao added.
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