Yu Minhong Unveils Another New Strategy: New Oriental Now Teaches Chinese

On November 26, according to media reports, New Oriental$New Oriental (EDU.US)$We have started offering Chinese language courses in the United States, delivered entirely online, with a primary focus on teaching Chinese.

In response, New Oriental stated: "The project is genuine. It represents an exploratory transformation initiative undertaken by Beijing Bilin Dongfang Education Technology Co., Ltd., a subsidiary of New Oriental, and has been in development for quite some time."

According to Tianyancha, Beijing Bilin Dongfang Education Technology Co., Ltd. was established in July 2017. Its business scope includes educational consulting, internet information services, the production and operation of radio and television programs, and the conduct of online cultural activities. The company is wholly owned by New Oriental Education & Technology Group Inc., and its de facto controller is reportedly Yu Minhong.

Under the "Double Reduction" policy, major education and training companies are generally grappling with the challenge of transformation, and overseas Chinese-language education presents a promising avenue for such a shift.

First, overseas Chinese-language education has not yet broken away from the broader education-and-training sector; thus, for major players to enter this space is hardly a leap into an entirely new field and is considerably easier than making a full career transition. Second, as Chinese language learning becomes increasingly widespread, the overseas Chinese-language education market is both sizable and relatively new, meaning that early strategic positioning and investment can help secure a larger market share in the future. Finally, this move also aligns with the Ministry of Education's recommendation to "expand China's opening-up in the education sector."

However, it will be no easy feat for entrants to achieve a smooth transition into the overseas Chinese-language education market. As a largely untapped blue-ocean market, players must grapple with challenges such as the suitability of their operational models, customer acquisition, operational efficiency, and the standardization of teaching quality and skills.

Trillion-Dollar Blue Ocean Market

With the rapid development of China's economy and the steady enhancement of its overall national strength, online English education taught by native-speaking foreign instructors has become increasingly popular domestically, while the number of Chinese-language learners overseas continues to grow. As a result, more and more people around the world are now studying Chinese with "native Chinese-language tutors."

According to statistics from the Ministry of Education, as of the end of 2020, Chinese language education was offered in more than 180 countries and regions worldwide, with 70 of them having incorporated Chinese into their national education systems. The number of non-Chinese learners of Chinese is estimated at approximately 25 million. During the 13th Five-Year Plan period, the total number of test-takers in global Chinese proficiency exams, including primary and secondary school Chinese examinations, reached 40 million.

According to a report by China Education Daily on December 15, 2020, the total number of people outside China who are currently studying or using Chinese is nearly 200 million.

The global enthusiasm for the Chinese language is closely tied to the Chinese government's strong promotion of Chinese and Chinese culture, with Confucius Institutes serving as the main vehicle for this effort.

It has been 17 years since the first Confucius Institute was inaugurated at Seoul National University in South Korea in 2004. As of 2020, China had established 550 Confucius Institutes and 1,172 Confucius Classrooms in primary and secondary schools across 162 countries.

The frequently repeated phrase 'The whole world is speaking Chinese' is no longer mere rhetoric. As China's global influence—particularly its economic clout—continues to grow, proficiency in the Chinese language and a deep understanding of Chinese culture have become essential goals for talent worldwide seeking to strengthen communication with China.

However, from a supply-side perspective, Confucius Institutes primarily cater to adult Chinese-language learners, with enrollment restricted to those aged 16–45, thereby failing to provide learning opportunities for youth under the age of 16. Yet, judging by the various policies countries have enacted to promote Chinese-language learning, young children and adolescents are precisely the primary target group.

For example, in September 2015, the U.S. government announced the 'Million Strong' initiative, under which the number of U.S. K–12 students studying Chinese is expected to reach one million over the next five years. Another example is 2017, when the New South Wales Education Standards Authority in Australia released the latest Chinese-language curriculum framework. Then, in 2019, Russia issued a decree incorporating the Chinese-language exam into the national standardized examination system, making it the fifth optional foreign-language subject in the Russian university entrance examination.

Against the backdrop of steadily growing demand, specialized and market-oriented Chinese-language training institutions have gradually emerged.

Meanwhile, Yao Hui, founder and CEO of the overseas online Chinese-language education platform LingoAce, has predicted that the market for international Chinese education could soon exceed RMB 100 billion within the next three to five years, indicating that this sector is currently in the early stages of rapid growth.

Language, as a vital link for economic and cultural communication, wields considerable influence. At the same time, with the ongoing advancement of globalization and the deepening of cross-cultural integration, the overseas Chinese-language education market holds enormous potential for development.

Naturally, this represents a direction that domestic education and training institutions, currently facing transformation challenges, cannot afford to ignore.

The major players have already entered the market.

Although the overseas Chinese-language education market is still in its early stages, many domestic education and training institutions have already entered the field well ahead of Bilin, which was only established by New Oriental in late August.

At present, the market has already attracted a host of players, including LingoAce, Super Chinese, Kaola Knows, Lingo Bus, TutorMing, Wukong Chinese, Preply, PPTutor, T-LAB, and many others; in addition, there are numerous smaller-scale language-training institutions.

Founded in August 2017, Lingo Bus is an online Chinese-language learning platform under VIPKID, a leading online English education brand for children. Targeting learners aged 5 to 12, Lingo Bus champions a 100% immersive Chinese-learning approach, with each lesson centered around a specific theme and featuring student-focused, diverse activities designed to foster an engaging, edutainment-driven learning culture.

In terms of curriculum development and pedagogical research, Lingo Bus benchmarks itself against two major standards: the American Council on the Teaching of Foreign Languages and China's national Chinese-language exams for young learners. The company has independently developed a comprehensive curriculum system that caters to both general overseas children and second- and third-generation Chinese immigrants, offering specialized programs for Chinese-American youth. These programs are designed to be engaging and interactive while placing particular emphasis on enhancing students' Chinese reading comprehension and literacy skills, as well as fostering an awareness of Chinese culture.

Take Kaola Zhidao, founded in 2018, as another example: it has now been integrated into the curriculum of AES, the world's largest private education system, and its online Chinese-language courses for children have been adopted by 8,500 schools worldwide. According to official statements, within just one year of launch, Kaola Zhidao's monthly revenue exceeded 1 million US dollars.

Even though some players have already established themselves, it's still not too late for education and training institutions like New Oriental to enter the market—after all, the sector is far from saturated, and competition remains relatively mild.

In terms of customer acquisition, players primarily rely on channels such as Facebook, Google, YouTube, and Chinese community associations. While acquisition costs are relatively low, the level of operational sophistication lags far behind that in China. Until an unequivocal category leader emerges, this situation leaves ample room for new entrants to develop and grow.

However, judging by the level of investment capital flowing into these athletes, this track could rise much more rapidly than one might expect.

In November 2020, LingoAce raised 13 million US dollars in Series A funding led by Shunwei Capital and Sequoia Capital, among others. Qingsong Fund, Lianshang Network, and ZeroOne Ventures have also shown strong interest in Super Chinese, with their investments reaching tens of millions. Meanwhile, East Ventures, Blue Elephant Capital, Plug and Play China, and Innovation Works have all supported T-Lab, enabling the startup to secure a multi-million-dollar round at its angel stage.

The evolving dynamics of capital are sure to attract more education and training institutions, while early entrants have already set benchmarks for domestic observers. It is foreseeable that an increasing number of firms will quickly flood into the market.

Facing Difficulties, Online Solutions May Be the Breakthrough

The first step in overseas Chinese-language education is to establish a foundation from scratch; the subsequent second step is to address various challenges that arise, thereby ushering in a phase of rapid development. At present, overseas Chinese-language education primarily faces three major challenges.

The first challenge is localization. When confronted with diverse cultures, customs, educational philosophies, and policies, the online education experience developed under the scrutiny of domestic parents and students proves insufficient. For instance, when it comes to educational philosophy, the U.S. and China differ significantly, each with its own strengths and weaknesses.

In the United States, education is primarily driven by motivation and pride; from early childhood education onward, the American educational system emphasizes granting students considerable freedom to pursue their individual interests and passions. For example, in classrooms, U.S. teaching places greater emphasis on sparking students' curiosity and encouraging them to continually ask new questions. In contrast, both domestic schools and after-school institutions tend to focus more on providing ready-made answers, which represents a clear difference from the U.S. approach.

In the early stages of market development, participants must continuously research and refine their localization strategies, particularly in curriculum design and teaching methodology. Given the significant differences in educational philosophies between China and other countries, adapting solutions to local conditions is crucial.

The second challenge is the issue of being large yet fragmented. Overseas Chinese-language education is not confined to any single country; it is a global endeavor. Factors such as time-zone differences, teacher distribution, and cultural disparities have fragmented what appears to be a vast market into numerous small, disjointed segments. How to integrate these dispersed markets in a rational and effective manner is a major challenge facing all stakeholders.

The third challenge is standardization. Although the popularity of the Chinese language has been growing for many years, there is still no equivalent to the IELTS or TOEFL for assessing Chinese language proficiency overseas. As a result, the development and implementation of Chinese-language teaching materials abroad have often resembled the parable of blind men feeling an elephant—each party grasping only a partial aspect. Fortunately, on July 1 this year, the 'Chinese Proficiency Standards for International Chinese Education,' jointly issued by the Ministry of Education and the National Committee for Language Affairs, officially came into effect, playing a crucial role in guiding institutions' future textbook compilation and curriculum development.

Of course, in addition to the three points mentioned above, there are also other issues such as personnel management and customer acquisition. Faced with numerous challenges, participants have turned their attention to online education.

Affected by the pandemic, schools around the world were forced to close, compelling students to learn online. Overseas parents, too, have gradually come to accept and adapt to this mode of learning, thereby fostering students' habit of online study. This favorable development has provided a market breakthrough for providers, leading to rapid growth in overseas Chinese-language online education.

Online education not only aggregates user needs to create a long-tail effect, but also addresses diverse challenges such as geographical, cultural, and learning-related differences across overseas markets.

Currently, major education and training companies—including New Oriental, Xueersi, and Yuanfudao—have successively launched online courses tailored for Chinese-speaking children living overseas. Recognizing and responding to this growing demand, several institutions have already begun experimenting with online Chinese-language instruction, such as VIPKID's LingoBus online Chinese-learning platform.

Using online education as a breakthrough not only facilitates the outward flow of abundant resources from domestic educational institutions but also accelerates the onset of a window of opportunity for market consolidation.

It is believed that, as more and more learners enroll, overseas Chinese-language education will experience rapid growth, becoming another strategic foothold for domestic education and training institutions and related investors.

By Lu Shiming

Editor/Da Feng

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