2020 China’s Online Education Industry Report

Source:iresearchMarch 01,20214:10 PM Overview
Market Size of the Online Education Industry

The market size was 257.3 billion yuan in 2020, increasing by 35.5%. 

According to the statistics of iResearch, the market size of China’s online education industry reached 257.3 billion yuan in 2020. The CAGR in the past four years was 34.5%. The accelerated online development process of early childhood and all-round education track and K12 subject tutoring is the main contributor to the fast growth of the online education market. Influenced by the pandemic, the online scope of early childhood and all-round education keeps developing vertically. The online development of the vocational education field has been accelerating, generating supply and demand. Impacted by the pandemic in 2020, the development of online education was accelerated, which will overdraft the growth rate in 2021. iResearch predicts that the YoY growth rate of the online education industry will fall to around 20%.

Online Education Enterprise Map

Industry Concentration Ratio

In 2020, the CR5 of the online education market was 15.2%, which was about 3.3 times of the offline education market.

According to the statistics of iResearch, in 2020, the market size of the online education industry was 257.3 billion yuan. The total revenue of the top 5 companies was about 39.2 billion yuan, and the CR5 was 15.2%. Since the online education market is affected by the Covid-19 pandemic, its CR5 in 2020 was not representative. The CR5 calculated based on data in 2019 was about 4.6%. The industry concentration ratio of the online education market is much higher than that of the offline education market. Although the concentration ratio of the education industry is lower than that of other industries, both online and offline education are becoming more concentrated. This change is accelerated by the impact of the Covid-19 pandemic on SMEs in 2020. According to iResearch, the CR5 of the offline education market will increase by 3.5 percentage points to around 8.1%.


Contents

From 2016 to 2019, the proportion of online education in the education industry increased from 8%-10% to 13%-15%. Influenced by the Covid-19 pandemic, the market size of online education reached 257.3 billion yuan in 2020, increasing by 35.5% YoY. The overall online rate was 23-25%. Among them, the acceleration of the online process of young children and all-round education track and K12 subject tutoring track is the most important contributor to the rapid growth of the online education market. But the high growth rate in 2020 will overdraft the growth rate in 2021.
The online education industry is facing high growth and high financing amount on the one hand, and increasing customer acquisition costs, general losses, and a long-distance from large-scale profitability on the other hand. The top players are still making greater efforts to increase their market shares. It is more difficult for SMEs to survive.
The scattered education market, especially online education, is becoming increasingly concentrated. In 2020, the CR5 of online education was 15.2%. Affected by the pandemic, the CR5 of offline education will increase by 3.5 percentage points to 8.1%. The capital is increasingly gathered around the top players. In 2020, the online education industry has raised a total of 103.4 billion yuan, and the five companies with the largest financing amount have raised 82.7 billion yuan, accounting for 80%.
As to segments, K-12 and preschool education are the most popular ones. K12 subject tutoring has highly rigid demand, high ceiling, and fiercer competition. But its online part remains to be developed. online large class is rapidly developing rapidly and is becoming the mainstream class type. It is evolving to local large classes. With the changes in parents’ education thoughts and the upgrade of education consumption, early childhood and all-round education is developing quickly. The emergence of new supply, new demand, and new market become the new battleground for the existing and emerging education companies and internet giants.
In the past two years, as the business models of the online education industry gradually became mature, many online education companies were getting listed in America. In the A-share market, with the passage of the Civil Promotion Law and the continuous advancement of market-oriented reforms, the first vocational education company IPO meeting was held. It is expected that the A-share educational asset securitization path will gradually begin.
With capital support, the online education industry is still gaining market shares and the competition is expected to be fiercer in 2021. Meanwhile, online education also faces stricter supervision and growing compliance costs. In terms of business model, online education is developing to offline, while traditional offline education is also actively embracing technology and developing online businesses. The online and offline businesses are merging. With the fiercer competition in the education and training market of the first and second-tier cities, the markets in lower-tier cities have become a new focus, but further exploration is needed.


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