However, against the backdrop of the COVID-19 pandemic outbreak, the e-learning market in China experienced a surge in market demand. With the school summer break commencing in July 2020, various online education institutions entered the battleground of recruiting students for extracurricular tutorials. The competition is intense since the online education market in China is filled with a large number of players, and the market share gained by each player is fairly small. The bottleneck of achieving profitability has not been loosened, according to Caixin. China’s e-learning market looks for more in-depth development and more complex technology to promote the next round of development.

The e-learning market’s competitive landscape has taken its initial shape with K12 online education sector growing rapidly

After 20 years of devious development, China’s e-learning industry realized large-scale monetization with the support of “live-streaming” in 2017. In 2018, with the initial formation of the competitive landscape and the intervention of the government, the online education industry began the initial stage of maturity. Market competition in 1st tier cities is saturating, while 2nd tier cities became the new battleground. 

Data Source: Statista, Market size of online education in China is growing as more players enter the market

As of 2018, the online education market in China reached 251.76 billion yuan, and the number of paying users reached 135 million. The major players in the online education market in China are Yuanfudao, Zuoyebang, Xue’ersi, and Baicizhan. Higher education and vocational training account for 75% of the total market share.

The K12 education sector in China has grown rapidly, and its share has almost doubled in the past 6 years. K12 online education apps also occupy a far larger share in terms of the number of MAU in all fields of education. As of November 2018, the top three e-learning apps with leading MAU are all K12 online assignment-based apps. This is probably related to the “excessive assignments tactic” in many elementary and middle schools in China, wherein students are encouraged to hone their skills with an abundant amount of homework.

Data Source: iResearch, K12 e-learning is growing in market share   

It is also worth noting that in 2018, online education has also been officially included in the scope of supervision of the education industry. The Chinese government has issued national standards and evaluation schemes for online courses, in which engagement is listed as an important dimension.   

Under quarantine, the online education market in China revitalized, but the core issues remain unresolved  

Due to the COVID-19 pandemic, schools of all types were postponed following the Chinese Ministry of Education’s notices. From February 10th to 28th 2020, the Chinese Ministry of Education issued a series of notices to provide guidance and measures to prevent and control the pandemic in the field of education.

Data Source: Baidu Index, Searches for online education surged during self-isolation period (Jan.- Feb. 2020, varies by cities) in China

Searches for online education on Baidu surged from late January to early February 2020. Moreover, searches for online education applications on the Apple Store, such as Zuoyebang and Xue’ersi, also increased significantly during this period of time. Yuanfudao, a leading online education platform, had advertized heavily on CCTV channels during COVID-19, leading to an increase of searches on the app store. 

Data Source: Qimai.com, Searches for Zuoyebang, Xue’ersi, and Yuanfudao searches on the Apple Store rose significantly during the COVID-19 self-isolation period. Zuoyebang remained the most popular online education application, whereas Yuanfudao showed the most dramatic growth thanks to its massive advertisements during the self-isolation period.

Despite market growth, homogenization, rough user experience, and fuzzy results still remain the core issues that hinder in-depth expansion of the online education market in China. With the intensification of homogenized competition, injecting huge capitals to boost growth has gradually weakened, whereas promoting growth through word-of-mouth and operation have received more attention. Online science eduation in China has lagged behind English tutoring, however we look at how COVID-19 boosted this market.     

Education System for Sciences in China is exam-oriented and routine   

The education system for sciences in China is  routine-oriented. From Year 1 to Year 6, students study Maths as a compulsory subject. After students enter secondary schools, all have to study Biology in Year 7, Physics in Year 8, and Chemistry in Year 9, in this order. Basic skills of Computer Science are taught from Year 7 to 9. These subjects are also tested in the Senior High School Entrance Examination, along with Chinese, Maths, English, Moral Character, History, Geography, PE.

When students enter Year 10 study, they have not yet chosen their orientation. Hence, students have to study all the subjects until Year 11, when they choose between either arts or sciences. Subjects under the sciences stream are Physics, Chemistry, and Biology, along with Chinese, Maths, and English. Students who chose the sciences stream don’t need to study arts subjects (Politics, Geography, and History). In Year 12, students continue to study the subjects under their chosen path.

In the College Entrance Examination, science students are tested on Physics, Chemistry, and Biology, along with Chinese, Maths, and English for the written part. It’s worth noting that arts students and sciences students work on different maths exam papers in the college entrance examination. Generally speaking, science education in Chinese high schools are fairly routine and exam-oriented, wherein students practice heavily on designed questions.

Limited scope of science education in schools gives birth to China’s online science education market; online Maths education market burgeoning

Due to the limited scope of science education in China, some parents will get their children involved in extracurricular learning clubs, such as robotics and coding. The ages of children attending such extra-curriculars is getting younger. In recent years, there are increasingly more K12 online sciences education platforms for the youth, especially online Maths education platforms.

The market segment and course types provided by online Maths learning platforms are quite similar, reflecting fierce competition in a homogenous market.  

By October 2018, there were four financing activities in the K12 online programing education sub-sector and 11 in online Maths learning sub-sector. 7 out of 11 suppliers gained capital, and most of them have large amounts of capital with over 10 million RMB. Compared to the online English learning market, which was developed much earlier and has entered into saturation, online maths education and programming training have become the hotspots of capital.

Zuoyebang, Xue’ersi, and Yuanfudao are the three leading online education platforms. However, instead of specializing in sciences education, these platforms provide full-disciplinary learning guidance services for elementary and middle school students. Yangcong Xueyuan (Onion Academy) is a leading online education platform focusing on K12 sciences education in China. Chengzhangbao is focusing on the training of children’s logical thinking and mathematical logic.

An interesting phenomenon is that people tend to enroll in classes across different platforms. Although these platforms are offering similar products and services, they still have minor differentiations regarding human resources, technology, user management, and foci of study.  

The prospect of online education market: An investment opportunity?

While there still remain core issues to solve in the online education market, we have seen emerging trends these years. The majority of online education platforms in the market offer an integrated solution to students, i.e. a comprehensive range of subjects, after-class homework, tutors, and online communities. There are increasingly more platforms specializing in science education, especially Maths learning, which are attracting significant investements. Moreover, the market has witnessed emerging trends of programing learning in early ages and adults learning data analysis for vocational needs.  

Data Source: YouGov, A survey results show that code/programming training starting from primary school as well as data analytics training and STEM education are considered to be the key accelerators for education development in Shanghai, China.    

Third-party (B2B2C) online education platforms, such as CCtalk, Tencent classroom, jioayu.taobao.com, which focus on adults education, also displayed a competitive advantage over traditional platforms in the market. Such platforms generally do not provide courses directly, but assume the role of middlemen, allowing the free inflow of a diversity of course types. They partner with educational institutions or individual teachers on one side and deliver content to end-users on the other.

The courses provided by these platforms varied from e-commerce marketing, Java to interior design, to name just a few. While the traditional B2C online education players tryied to differentiate in various segmentations, such platforms, backed by their Internet parent companies, aim at covering all usage scenarios and leverage online traffic to enter the market.

It’s expected that the growth rate of the online education market in China will remain at about 20% in the short term, with higher education and vocational training continuing to lead the market. However, there were many e-learning companies undergoing a state of loss, including Liulishuo and 51Talk. Loss is common in the e-learning market in recent years. However, the rate of loss has narrowed, and profitability is not indefinite. 

 In the future, online education companies are expected to achieve profitability, but the premise is to solve the fundamental problems of rough user experience and unpredictable results in order to further realize the survival of the fittest, increase market concentration, and ensure steady growth.

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Educational technology is an often overlooked global phenomenon. In 2015, global EdTech companies took in more than $2.98 billion across 442 deals, and global EdTech funding jumped a whopping 58% in 2015 from the previous year. The global market is projected to grow at 17.0% per annum, to $252 billion by the year 2020. Asia is seeing the fastest growth in investment into the sector; China, in particular, is the largest EdTech market.

According to the Statistical Report on Internet Development in China, the number of online educational users in China reached 423 million as of March 2020, an increase of 110.2% from the end of 2018. The EdTech sector in China is estimated to reach RMB 453.8 billion in 2020, a 12.3% increase from the previous year, according to a report by iiMedia Research. As a response to the coronavirus outbreak, many EdTech start-ups have captured the opportunity to increase its presence in China and competed to gain popularity among students with attractive course offerings and discounts.

With over 400 million students, China is the world’s largest market for educational technology. While the education market in China still has much room to improve, especially in terms of formal integration of technology into classroom settings, many companies have successfully taken advantage of opportunities for digitizing education in China. EdTech landscape in China focuses on virtual tutoring, but there are a number of other EdTech start-ups that have successfully penetrated the EdTech landscape in China.

These are a few of the most innovative start-ups of the Chinese EdTech landscape –  from robotics to tutoring, to innovative educational technologies. We also explore which of these start-ups have gained a competitive edge during the coronavirus outbreak.

EdTech platforms in the Chinese education market

Yuanfudao (Yuantiku)

The platform focuses on K-12 learning and its products include AI-enabled virtual classes, live tutoring, and apps for homework support. A start-up founded in 2012, Yuanfudao has raised US$1 billion in a new round of funding in April as a response to the coronavirus outbreak led by Hillhouse Capital and its previous investor Tencent Holdings. This puts its valuation at around US$7.5 billion, making it one of the most valuable ed-tech start-ups in China.

In 2015, it launched Yuantiku, an online question bank. This app strategically takes advantage of the test-taking focus of the education system in China. Yuantiku is an online education product that provides material of previous years examinations for students and an exercise database that also provides tailored exercises to improve testing efficiency.  Some tests available include: National College Entrance Exam, post-grad entrance exams, tests for civil servants, first-level constructor exams, law counselor of enterprise exams, securities qualification exams, and more. More than 13 million Chinese junior high and high school students utilize the app, where hundreds and thousands of apps are aggregated to prepare students for the college entrance exam.

With such a huge database like this, its no surprise that two-thirds of Yuantiku’s staff is dedicated to research and development. Leading engineers and researchers are also hired for the application’s “little ape” search and “ape teaching” assistance to further develop its artificial intelligence methods in more effective learning methods. However, since its release, there have been public debates regarding its promotion of the heavy test-centric culture that has already been criticized in China. Questions of whether this kind of application is positive for the social health for Chinese educational society is still something to keep in mind with Yuantiku.

17zuoye

17zuoye, translating to “yi-qi-zuo-ye” or “homework together” widely recognized as the largest online educational platform in China. It is a three-party intelligent education platform for students, parents, and teachers. As of February 2018, 17zuoye has served over 60 million users and 120,000 schools by offering homework solutions to instructors, students, and parents. The platform aims to improve learning efficiency and efficacy and transform student homework from offline to online.  In the same year, the company also raised over $250 million, and intends to expand into the middle school and high school sectors, and continue to lead the the educational technology market in China.

Their mission, state on their website, is to “make education a more beautiful experience” by “utilizing advanced education technology, quality educational content, and continuous educational enthusiasm” in order to “provide more efficient and beautiful products and experiences for K12 stage schools, families and social education scenes, opening a new era of intelligent education.”

VIPKid

Valued at $3 Billion in 2018, VIPKid is one of the hottest applications for online English tutoring in China. The company pairs English tutors from the United States or Canada with Chinese students for one-on-one English tutoring geared for children 4 to 15. Through a live video tutoring platform, parents can book a session for their children with tutors, who can upload videos of their lessons. The English teachers are considered hourly-paid independent contractors.  Currently, VIPKid claims to have over 700,000 paying students and more than 80,000 registered teachers based in North America on the platform.  The company also raised $500 in 2018, suggesting a wave of growth in the Chinese EdTech industry, and across Asia more broadly. 

The app released followed their launch of the desktop version, and the app is a handy tool that lets students see previous feedback from teachers, upcoming schedules, and personal profile. Teachers can review their student sessions, a number of classes taught, and how minutes teaching completed. It also comes with a messaging area and notifications that can alert teachers and students of their upcoming tutoring sessions.

The platform rapidly took actions to support education in response to China’s school closures in late January due to the coronavirus outbreak. VIPKid’s first step was a launching 1.5 million free online math and English classes for children aged 4 to 12, and they prioritized students in Wuhan, the epicenter of the outbreak. They also launched free live-stream and recorded classes on eight major streaming platforms in China.

DaDaABC

DaDaABC has become one of the most successful intelligent English learning platforms for children in China. Founded in 2013, the company had earned over 15 awards and recognition in 2016. They’ve also collaborated with a number of top media companies in China, including Baidu, People’s Daily, and Tencent.

DaDaABC developed an English training system focused on one-and-one online tutoring while encouraging kids to have with their instructors during their practice. As an English tutoring platform, DaDaABC is often compared to VIPKid, but the company does not require their native English teachers to have a North American accent like VIPKid.  As a partner of the American TESOL Institute (ATI), they also offer online training courses for aspiring English instructors worldwide.

Makeblock

Makeblock is one of the most creative companies on our list. Founded just 6 years ago in 2013, the start-up uses Robotics as its primary educational tool, teaching kids coding, engineering, and other basic AI technologies. The package includes do-it-yourself robotic kits that will be manually assembled by students, who then also write simple lines of code to control their robots.

Makeblock is a global leader in STEAM education solutions (Science, Technology, Education, Arts, and Mathematics). The company provides hardware, software, content solutions, and even top-notch robotics competitions. Their products have over 8 million users worldwide, in over 140 countries, by over 1,600 channel providers. Makeblock has been the recipient of seven international awards, including the International Design and Excellence Award, the Reddot Design award, and the CES Innovation Awards in 2018.

As part of its global STEAM on Board Initiative for K-12 educators, Makeblock launched their “at-home resources” in March to adapt to online education with the pandemic. Initially designed to support local professional learning needs of STEAM and computer science teachers, the program now allows all educators and parents around the globe to teach and learn STEAM concepts with their free software, mBlock.  

CCtalk

CCtalk is the multifaceted online learning platform for Hujiang EdTech, another leading company in the Chinese education market. Hujiang was founded in 2001, as a BBS (bulletin board service) community offering online courses, but has since then expanded to offering a wide range of online educational programs, including international and domestic exam prep, foreign language instruction, professional skills training, and even more. CCtalk is a real-time interactive education platform that provides independent knowledge educators and sharers with comprehensive online education tools and platform capabilities, providing informative content and a community environment for learning.

Contrary to popular thought, not every EdTech platform in China is solely based on English tutoring. CCtalk provides a variety of educational tools and abilities both in live, recorded, and group formats. The platform allows teachers to utilize and create educational widgets, including a two-way digital whiteboard, digital hand raising, a multiplayer video that guaranteed teacher-student synchronization, desktop sharing, live PPT-like courseware, and playback functions. CCtalk university provides training for their iteachers, and the CC talk platform itself serves as a great platform in helping teachers attract more new users, and increase revenue from their courses.  The platform has been widely highlighted as a leader in educational innovation, allowing teachers to develop and utilize their own widgets and share them with others on the platform.

Changing Edu

Changing Edu is an O2O (online to offline) educational service app-maker connecting students, parents, and teachers to facilitate after-school learning services. Parents can post inquiries regarding tutoring services, and the mobile service app helps connect tutors to students. The Chinese EdTech company uses an online platform to make offline matches for one-on-one, at-home tutoring services. The company also plans to launch virtual, remote educational services, and other live streaming and expert Q&A services this year on their platform. The platform currently operates in 11 cities, including the larger cities of Shanghai, Beijing, Shenzhen, and Wuhan.

To accommodate for at-home learning during the coronavirus, Changing Edu launched a “Six-week learning contract” initiative for personalized one-on-one teaching. After the six-week learning period, students can apply for a full refund if they are dissatisfied. They also provided a free online teaching platform for self-employed teachers and smaller educational institutions in the industry. Among Chinese society, it seems that this platform has gained popularity among users after the outbreak.

Huikedu Group

Founded in 2010, the Huikedu Group includes the “Huike Education Group” and the “Huike Science Research Institute.” They are the largest partner with higher institutions in China, offering cutting-edge educational technology and products to higher education and vocational education services. The group also cooperates with national goals to develop mobile internet, cloud computing, big data, internet marketing, and other innovative information technology into educational services.

Huideku has reached a unicorn valuation of $1billion. Its focuses are in partnering with enterprises to provide customized educational products. It has developed online courses and R&D labs on tops such as AI and robotics. Additionally, the group also partners with overseas schools to provide overseas educational programs such as exchange programs, language training, and career development.

Supporting at-home learning during the coronavirus pandemic, but what happens next?

The coronavirus outbreak has hampered the supply chain of many industries such as tourism, retail and much more. It could be said that the EdTech sector has been one of the “winners,” seeking opportunities to gain popularity in China in support of local education. Yuanfudao, VIPKid, Makebloc, and Changing Edu have made noticeable initiatives in response to enhance students’ at-home learning. Yuanfudao is one of the top online education apps with a weekly active user YOY growth of 21 times from February 2019 to February 2020. The education app leading the industry is Xuuersi, with a 50 times YOY growth. Its daily active users exceeded 10 million, with many new users from second, third, and fourth tier cities.

With the future uncertain, the most popular educational functions are short commitments, such as one-month subscriptions for a couple lessons or short interactive videos. However, doubt remains as to whether surge demand for EdTech fueled by quarantine measures will last. Schools will eventually reopen, and users are not guaranteed to stay permanently. Indeed, how people value and view the online education market has been revolutionized, yet the question of the longevity of these platforms remains.

Educational technology in China: Takeaways

Educational technology in China has not only seen tremendous growth in recent years but also shows no sign of slowing down in the booming education market in China. With these 8 being amongst the hundreds of EdTech start-ups across China, global markets should realize the innovative ways in which China utilizes digital tools to enhance students’ education in China. This phenomenon also stems from cultural factors, as Chinese society has always vigorously upheld education as one of its core cultural and social values. It is important to make a note of how China has integrated this value with the realm of technology and innovation, While tutoring applications remain the bulk of EdTech companies in China, our list has noted a number of creative EdTech start-ups that utilize a variety of online tools and out-of-the-box educational services. Western markets should be highly alert to the EdTech landscape in China, especially due to the large demand for foreign language tutors. This market is sure to see extended global communication, as language teaching and cross-border education become increasingly in demand with the enhancement of EdTech.

Author: Julia Qi

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The number of students going abroad is mounting every year as increasing numbers of Chinese students are looking for an experience overseas. Between 2008 and 2016, the number of students studying abroad had increased from 179,800 to 544,500 showing overwhelming growth. In 2017 alone, 608,400 students left China for overseas study. This fast growth has been developing since 2010 and has been growing year on year. Today, China is the largest source of international students and is expected to grow. Yu Minhong, the founder and CEO of the New Oriental Education and Technology Group as well as a member of the Chinese People’s Political Consultative Conference’s National Committee, estimates that the number of students studying abroad will peak at 700,000 to 800,000 each year. However, the coronavirus outbreak has caused Chinese students to re-evaluate their study abroad plans, gradually initiating a shift in destination preferences and post-grad decisions.

Why is China’s study abroad rate increasing?

The price of student exchanges has also become increasingly more affordable as the booming economy has allowed more parents and students to meet these heavy costs. This has allowed more Chinese students the opportunity to go overseas in order to increase their chances of employment after graduation. This is especially important as 2010 brought a higher percentage of unemployed graduate students causing students to look for ways to differentiate themselves in the job market. Many students, however, despite the abroad experience often return home with the compound annual growth rate (CAGR) being 14.9% for returnees and 11.7% for students going abroad. This is as many students intend to go back after studying or find the job market overseas too difficult with them often having lower revenues. The government also offers incentives to returnees in China with them having better opportunities in larger cities which they would not have been able to access without foreign education.

Chinese students studying abroad: Destination preferences

Due to China’s massive population, it sends more students abroad than any other country and this number is still rising. This is seen with growth in the number of returning Chinese students overtaking the number of students studying abroad in 2016. The United States (US), however, has been the preferred destination for many Chinese students with it remaining the top destination year on year.  The quality of a US education is reputable and many Chinese students study in the US may hope to stay and live there after graduation in order to enjoy the lifestyle of a developed country. Further, many Chinese international students prefer to study in English speaking countries with the US, Australia and the UK making up approximately 60% of outbound students. China is also the largest source of international students in many countries with Chinese students accounting for 30% of students in America, Canada, Australia and New Zealand.

However, what may have been a popular destination could be fading due to the pandemic and various political clashes (such as trade war).

According to a report on the economic impacts of the pandemic published in April by the US-China Economic and Security Review Commission, a host of issues can reduce Chinese demand for higher education in the US in the following academic year. These include delays or cancellations of US entrance exams in China, travel restrictions, and the perpetuating uncertainty of when US college classes will be in-person. The economic impacts could be severe as nearly a third of all tuition payments to US public universities stem from international students. Also, cancelled university recruitment events in China and inability to work with local recruitment agencies could further contribute to the decrease in enrolment (learn more on how the coronavirus has impacted Chinese students’ study abroad decisions).

Prior to the coronavirus outbreak, there has already been a decline in enrolments from Chinese students in US schools, most of which are part of the larger picture of rising Sino-US political tensions. For instance, visa refusals have been a common problem facing Chinese students. As such, the development and job opportunities back home prove to be attractive reasons for the drop in Chinese students seeking to settle overseas after graduation, which was 85.4% in 2013 but 79.4% in 2016.

Other countries are also increasing their awareness in China as they gain market share slowly and Chinese students are ready to assess new destinations. It is clear, however, that English speaking countries have an added advantage to attract Chinese students who want to better their English speaking skills. Some regions have become more popular with East Asia and the Pacific taking a significant portion of Chinese students with the convenience of location. This is with Japan as the 4^th most popular country and South Korea as the 6^th most popular country in 2016.  This is also with Chinese students accounting for 57.3% of international students in Japan and 49.3% of students in South Korea. Many students also studied in Hong Kong due to its proximity.

Why do Chinese students study overseas?

Chinese students abroad: Social, personal and professional benefits

When surveyed it was found that 82.5% of companies and employers give returnee employees privileged treatment. A CCG survey found that almost half of the Chinese students surveyed who studied abroad believed that they were more competitive than their peers who studied at domestic universities. This is proven true with 20% of companies promoting returnees faster and 17.5% preferring returnees for core positions and 50% of state-owned enterprises claiming that they welcome returnees into core positions. These figures alone show the importance employers place on abroad studies with these high percentages indicative of the professional benefits provided to those with an overseas degree.

Another benefit this provides for Chinese citizens the influence abroad education has on Hukou. Hukou is strict and complicated household registration system which also doubles as a domestic passport that regulates the Chinese population both socially and geographically. It determines factors such as where a person can live and work, where their children can go to school particularly so if they belong to a rural area and the social welfare benefits they can receive. Returnees from abroad studies get a more flexible Hukou transfer policy which helps them settle down in tier 1 cities and gives them more opportunities in terms of experience and salary. Further, preferential policies are also provided by the government to get returnees to start a business by providing grants and incentives such as free or discounted offices or tax-free cars. This is in order to attract Chinese talents back to China.

Besides the social and professional benefits provided by organizations and the government, there are personal benefits for Chinese students who go on exchange. This is evident as 64% of Chinese international students pursue abroad education in order to enrich their personal experience. This includes improvement of their English skills, the knowledge they gain of a different culture, overseas life experience and an international network. These benefits can be gained by any student studying overseas but English based exchanges are particularly beneficial for Chinese students who have been studying English throughout a school. This is as it gives students a chance to gain practical experience in a different environment that makes them more employable in the long run. Other than Chinese and Spanish, English is one of the most widespread languages in the world. It has gained increasing importance with English being an official language in at least quarter of the world, with 400 million people speaking English as their first language and 1 in 5 people being able to speak or understand some English. The role of English in China cannot be understated especially as it is integral for professionals to compete within the business environment. This is illustrated with parents understanding this importance as they start English education early in order for their children to start off more competitively, thereby spiking the demand for English teachers in China.

Another major benefit is also the waiving of the Gaokao entrance exam. Gaokao is the test undertaken by high school students in order to study at university and it is known worldwide for being an extremely difficult and stressful exam. The test has been said to determine the course of a student’s life and is the only way to enter university. The supply of university spots is also known for not meeting demand- making the pressure on high school students enormous. Those who previously did not anticipate abroad studies and those determined to study overseas do not need to pass Gaokao which takes a significant amount of stress off of students.

Chinese studying overseas: Criteria for students picking universities

As studying abroad is very important for students and parents a lot of thought goes into picking the university and country they will be studying at. A big determining factor to consider is the country itself. This requires evaluating the country itself by its size, population, economy and development degree. Chinese people prefer countries which are bigger and have a larger population, higher economic power and the development degree which makes the US the most popular country to go to. Some students are also concerned about the culture of the country itself.

Further, the school awareness in China that is the school’s brand reputation is very important. This is evident with 61% of students in a survey conducted by WSE choosing school reputation as the top consideration of school selection, with the success rate following at 48%, school location at 40% and expected income level after graduation being at 39%. This is as about 80% of international Chinese students go back to China after graduation which makes the school’s awareness and reputation important when considering job prospects in the future.

Moreover, the ranking itself is very important with many different versions of school rankings applying in China to help students and parents make decisions. This includes the QS World University Rankings and the Academic Ranking of World Universities and ranking in the top 100 is very beneficial to students wishing to return to China.

Additionally, the curriculum offered by the school itself is vital. This is with weight in decision making relating to the design of the curriculum, the composition of it, the availability of course choice, the quality and exclusivity of each course and even the internship opportunities that the school supports.

Lastly, whilst all of the above is extremely important, the cost is often a major determining factor. This includes the cost of tuition, living expenses and scholarships available. As such, many students go to Hong Kong for further study due to the lower expense and some European countries provide free public education for the same reason. This is evident with 45% of students being concerned about the cost of studying abroad, compared to only 27% of parents. Cost is especially important as 89% of students traveling abroad self-finance their study so they are very receptive to scholarships or less expensive locations.

International education: How do Chinese people look for information to choose the right university?

Chinese study abroad agencies and specialized education companies are important in helping students to pick countries and universities to study abroad at. They offer a broad range of services to students and help foreign universities and programs get more visibility among students. Due to the services offered, student’s families are willing to a pay a large amount of money for these services which include counseling services on programs, assistance in preparation, application and admission processes, test preparation, English classes as well as international study tours. The Beijing overseas service association also can help abroad institutions to select good partners among agencies to promote institutions in China.

Further, as stated, online information is very important with Chinese students spending a significant amount of time looking at the best destination, university ranking and application process. As such, a good online presence is essential for an overseas university- especially if it is not a top ranking one. Particularly, 31% of students depend on social media when researching for their study destination. They also look to the alumni network for recommendations and feedback as students trust advice from those who have attended the school itself. As such, it is important for universities to have good ambassadors as Chinese students want to hear about the university in a more personal and informal way.

Trends in types of study undertaken by Chinese students

The types of study undertaken by Chinese students themselves vary with the type of study they undertake. This is with Master and Bachelor degrees at the forefront of reasons for going overseas for study, with other avenues collectively making up the remaining 31%. There is, however, a preference for longer study programs over shorter ones. This is with slower growth for shorter study options in comparison to the faster growth experienced by Bachelor and Masters degrees. This is as shorter exchanges are not as popular with Chinese students who prefer to spend the duration of their program overseas with four or two years being favored over a few months.

There are also trends evident in the degrees undertaken by Chinese students. This is with both engineering and business management as the most popular degrees chosen by students. However, in 2016 subjects shifted as more students paid attention to their own preferences over parental preferences and what is expected of them. This was evident as the Center for China & Globalization reported a decline in 2016 with students studying engineering, computer science and IT, math and statistics and social sciences, whilst the number of students who chose to study business management, foreign language and literature and education increased. Further, it was mentioned that subjects relating to business management, trade and corporate management and finance have increased as development in China has created more demand for professionals in these fields.

Market difficulty in China for student exchanges in lesser-known countries

Consulting agencies specializing in overseas programs still promote the US and other popular speaking countries such as the UK, Canada and Australia. As such, standing out from those countries can be quite challenging for smaller countries. This is as knowledge of the country studied at and a school’s ranking is very important for students. This is due to the implications it has for the employability of students, especially those wishing to return to China. Further, social recognition and prestige also play a role beyond professional necessity which can also be a determining factor for parents and students, especially from tier 1 cities.

Study abroad: The Belt and Road Initiative and its effect on Chinese international students

According to Forbes, the Belt and Road Initiative will affect 60% of the world’s population with the participation of 76 countries from Asia, Africa and Europe. The trade and infrastructure undertaking is thought to be one of the most ambitious undertakings in human history and is viewed as ‘a sort of 21st-century silk road’. Along with connecting through trade, Beijing currently offers 10,000 places each year for students who come from countries within the Belt and Road Initiative with China attracting more than 200,000 students from 64 of 68 Belt and Road countries in 2016. Further, since 2013 when the launch of the Belt and Road initiative took place, Chinese students have also flocked to Belt and Road countries with 24 educational agreements being signed between some of these countries since April 2017. This initiative opens up substantial and wide opportunities to educational bodies of countries within the initiative, with the Chinese government wanting to strengthen both educational and trade bonds between countries.

Opportunities for brands wanting to enter the Chinese market

Chinese students prefer English speaking countries in order to improve their English as it is a must-have skill in the work environment with 60% of Chinese students currently going abroad to the US, Australia and the UK. As a result, this increasing need for English helps leverage English speaking countries for exchanges as a whole – not just the top destinations sought by students. This is seen as Chinese students are now exploring new countries for overseas studies. There is, however, due to the Road and Belt Initiative, an opportunity for growth for many more educational organizations and countries to attract Chinese students using the initiative as leverage to strengthen the appeal for Chinese students. This is especially where educational organizations are not within the top 100 or are as well known to Chinese students. This awareness in China is particularly important as going abroad is meant to enhance employability and employment opportunities which cannot be achieved without businesses being aware of the educational organization. Further, an emphasis on the social and personal benefits students are looking for, along with strengthening programs in the more popular university courses, will help make organizations stand out to students. Most importantly, recognition by the Chinese Ministry of Education of the degree and the university itself is necessary for recognition and desirability among the Chinese.

Moreover, there are opportunities for educational organizations that are located in less expensive countries or areas should highlight their desirability and more expensive schools should offer scholarships in order to appeal to students who are self-financing their abroad study. However, it is also important to note that the urban middle classes are also estimated to increase; a McKinsey survey in 2015 found that there were 10 million affluent households with more than 300,000 RMB, and it is estimated to be 18 million by 2020. These households were mostly found in tier 1 to 3 cities but tier 4 to 5 cities were found to be steadily increasing their income. This growth in disposable income and wealth among cities is likely to have a positive effect is on expanding the number of students studying abroad and providing opportunities for more countries than in the past. Although there have been recent declines in Chinese students studying in the US as well as more returnees upon graduation, studying abroad is still a reflection of social mobility and status. The UK sits behind the US as a top destination, with pursuing a master’s degree as an attractive choice with its one-year program considering costs and study requirements. In the coming years, we may see a larger shift in the preference of university destinations among Chinese students in light of the recent events.

See how COVID-19 has impacted Chinese students’ aspirations to study and work abroad.

Author: Jessica Farrell 

Daxue Consulting has conducted a series of surveys on Competitive Benchmarking in China and developed a specific framework to analyze the key insights related to your competition in China.

Competitive analysis is defined as identifying your competitors and evaluating their strategies to determine their strengths and weaknesses about those of your product or service. Daxue provides you with the tools needed to win in a market full of players.

This article Education elsewhere: China seeks out exchanges in other countries is the first one to appear on Daxue Consulting - Market Research China.

Whiteboards in China area necessary education tool

The Ministry of Education (MOE) increases investment of teaching whiteboard in China 

In recent years, the national and local governments have continuously increased the investment in basic educational equipment. The upgrade of equipment has provided technical support in education.

The MOE requires schools to install certain teaching equipment including teaching whiteboards instead of blackboards. Whiteboards allow teachers to project vivid pictures and videos to enrich class. Both students and teachers can avoid the harmful health effect of chalk dusks by using smart whiteboards. Meanwhile, the MOE emphasizes that the government will strengthen the promotion of modern education equipment in remote regions.

For the past three years, the cost of teaching equipment increased stably, according to MOE’s statistics. In 2018, teaching equipment and instrument spending reached 551 billion yuan.

[Data Source: MOE “Annual Expenditure on Teaching Equipment & Instruments”]

Whiteboards are necessary in various industries.

In addition to education, whiteboards also apply to a lot of industries. The commercial market has a huge potential. The uses of whiteboards have expanded to conference rooms, smart medical treatment, smart Party construction and more commercial uses. Users can make their communication more effective and efficient through whiteboards.

Baidu Index shows economically developed area’s are more likely to search about whiteboards, where people usually can afford high-end products. Thus, high-end whiteboards have promising future in the Chinese market as more people and school systems have spending money.

[Source: Baidu Index “Whiteboard inquiries Geographical Distribution”]

Main competitors of the whiteboard market in China

Popular whiteboard brands in China

The whiteboard market in China is matureing. According to qiang100.com, most popular whiteboard brands are local brands. Most of them are stationery companies and do not treat whiteboards as the main products.

Deli and Ziwei Star are two representative whiteboard brands in China. Deli is a well-known trademark but focuses on stationery sales. In contrast, Ziwei Star concentrates on teaching whiteboard sales but brand awareness is lower than Deli.

 [Source: TMall “Product Information of Deli and Ziwei Star”]

Deli represents the company which sells whiteboards well but regards whiteboards sale as one product line.

Deli is the biggest stationery brand in China. It office supplies and customized products as well as distribution, installation, after-sales service in a one-stop service. Deli’s sale and service net covers the whole China. People can get access to Deli’s products in retail stores and online stores.

Ziwei Star specializes in whiteboards in China

Ziwei star is a whiteboard brand in China concentrating on whiteboards, but the brand is not famous. Its public information can only be found in the official TMall store and JD store.

The rise of interactive whiteboard products influences the sales of the whiteboard products in China.

Electronic whiteboards are now competing in the traditional whiteboard market. The leading electronic whiteboards in China are HiteVision, CVTE and SMART.

HiteVision

HiteVision has been cultivating “HiteVision” brand products since 2000. It has mastered the key technologies and huge marketing channels in the industry. Thus, it holds a large market share in the interactive whiteboard market in China and plans to expand into the overseas market.

[Source: HiteVision website “The HiteVision Interactive Whiteboard”]

CVTE

CVTE is an intelligent interactive solution provider with display and control technology as the core. It is the second-largest interactive whiteboard producer in the Chinese market. One of its product line, Seewo, provides interactive whiteboards and relevant software to help with teaching. The other product, MAXHUB, applies to meeting scenarios in various industries.

SMART

SMART is a foreign company originated from Canada. It is similar to CVTE, providing smartboards to both education and business meetings. It is worth to emphasize that SMART has a product called Kapp. Kapp allows people to read the content written in a whiteboard wherever readers are.

[Source: SMART “SMART Kapp”]

What to know about the whiteboard market in China

Companies have their unique advantages and are able to catch hot spots and take measures to prevent possible risks when expanding the market.

Core competencies stimulate customers’ brand choice.

Core competencies refer to the resources that can bring companies comparable competitive advantages, they can make products gain the stable profits in the market. Deli’s core competency is its brand reputation in the Chinese market. While Deli is a reliable choice, Ziwei Star may have deeper core competencies due to being specialized in whiteboards.

Whiteboard demand increased after the Coronavirus

Based on the Baidu Index, the search volume of the whiteboard and its relative keywords had a sudden rise after the Chinese new year. That period is the Spring Festival in China and the quarantine due to Coronavirus. People cannot go outside and whiteboards become useful tools for teaching and meeting.

[Source: Baidu Index “Whiteboard Search Index”]

Creating some interesting uses of products draws consumers’ attention. Seewo’s official Weibo indicates that it ever posted a video that created a scratch ticket in its product and gained 1,100 likes.

The Thirteenth Five-Year Plan standards for the whiteboard industry in China.

Environment-friendly development is required.

The plan encourages producers to produce green products. The government will supervise the production from the design to recycling to strengthen the whole product life cycle green management.

Import tariffs increase costs.

Most whiteboard brands are local brands and their prices are not expensive. Import tariffs will influence import products’ pricing and induce a series of regulation issues.

How Daxue Consulting can help

As a professional marketing research consulting firm, we have rich experience in multi-industry market research and we use multi-methodology to satisfy customers’ requirements. We can help you investigate the market elaborately to locate your product and explore expansion strategies.

If you have any question or want to have further discussion with us, just contact us at dx@daxueconsulting.com.

Author: April Peng

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This article The Whiteboard Market in China is the first one to appear on Daxue Consulting - Market Research China.

Data Source: JJL Overseas education, Country Distributions of Chinese Students Studying Abroad

Data Source: MOE, Number of Chinese Students Studying Abroad from 2009 to 2018

How COVID-19 impacted Chinese students studying abroad, and why it is important

When discussing studying abroad, the focus is often on the benefits of the individual students. However, the exchange of students in foreign countries is beneficial to society in many ways, especially in fostering and attracting talents. Hence, the negative impact of COVID-19 on Chinese students’ willingness to study and work abroad will inadvertently impact foreign industries if it manifests as a smaller talent pool for key industries.

In the ’90s, self-funded studying abroad became popular, triggering the boom of Chinese students abroad. Until 2011, most Chinese students who chose to study overseas stayed overseas after graduation. At that time, China’s economy was not as robust as now, so living in flourishing countries seemed to be more attractive for ambitious young professionals. Those overseas Chinese worked hard and make great contributions to overseas countries’ development, working in booming industries like tech in Silicon Valley.

Starting in 2008, when the global financial crisis broke, more Chinese students went back to China to contribute to the country’s development. The current overarching trend is that the amount of Chinese students abroad is growing faster than the amount of Chinese workers abroad.

National Bureau of Statistics’ report indicates that more Chinese went back to China, and the trend was rising since 2008. In 2017, the rate that Chinese students returned to China was 79%, over 74% compared to 1987. In 2018, nearly three-quarters of Silicon Valley tech employees were foreign citizens.

[Data Source: Chyxx “The Rate That Chinese Students Returned to China”]

Data Source: National Bureau of Statistics of China, Number of Overseas Students that go Back to China After Graduation

The trend of Chinese overseas students leaving the country after graduating is also reflected in the US visa statistics. In the year 2000, the ratio of student to temporary work visas for Chinese citizens in the US was around 1:2. Come 2015, the year when Chinese studying in the US peaked, there were 12 student visas for every temporary work visa issued to Chinese, a 1:12 ratio. In 2019, this number has dropped to 1:3 due purely to the shrinkage of student visa issuances.

Data source: US Department of State, US temporary work and study visas issued to Chinese nationals 2000-2019

Trends of the the overseas Chinese students after COVID-19

According to our mini-survey, there is evidence that COVID-19 has impacted the willingness of Chinese students to study and work abroad. However, most of students do still insist on their former plans. 22.6% participants changed their plans to study overseas, causing some impact on study-abroad market in China.

Data Source: Daxue consulting COVID-19 student impact survey: Chinese students abroad’s plans

Data Source: Daxue consulting COVID-19 student impact survey: Reasons Why Students Give up Studying Abroad/Working Abroad

Few Chinese students give up studying abroad

Although facing so many difficulties, only 2.6% of participants decide to abandon study abroad. Many students share that they cannot control the trend of the virus, but can keep positive to face difficulties. Maybe they will choose to extend the enrollment time of their programs but not give up studying abroad. Additionally, more Chinese students may study abroad in the future since numerous people didn’t get jobs this year.

More people lose interest in working overseas

Working overseas after graduation used to be popular, but now the situation is different. Daxue’s mini-survey shows that before the virus, 91.6% had at least a little interest in working abroad. However, after the outbreak of the Coronavirus, 20.3% expresses no interest in working abroad, increasing over 11.18% than before. One reason is that the virus causes a decrease in job opportunities. Some comments also show that many Chinese students feel disappointed in western countries’ poor handling of Coronavirus. Thus, more students realize that they prefer to work in China.

Data Source: Daxue consulting COVID-19 student impact survey: Participants’ Interests in Working Abroad before and after COVID-19

COVID-19 caused various worries for Chinese students studying abroad

The sudden virus disturbed people’s ordinary lives, especially students. Caught in the middle of this are students in foreign countries away from family, hence Chinese students studying abroad also met many difficulties.

Chinese students currently studying abroad were mostly concerned with finding a way home, and their healthcare.

Due to the outbreak of the Coronavirus around the world, almost all countries shut schools, forcing all students to take classes online. With flights grounded and schools closed, many graduates worry about whether they can go back home before their visas expire. Students staying abroad are also afraid that they cannot get guaranteed medical service if they get sick abroad.

Meanwhile, there is increased in discrimination against Asians in many western countries. Chinese students around the world are facing discrimination, in the form of slurs, attacks and avoidance, all while many Chinese abroad felt disappointed by how few westerners took the virus seriously. Meanwhile, the potential economic recession causes difficulties in seeking jobs. Various companies stop hiring and even laying off many employees. On May 18^th, The Mercury News reported that the Bay area laid off over 100,000 employees over eight weeks.

Data Source: Daxue consulting COVID-19 student impact survey: Worries of Chinese students abroad during COVID-19

Students who returned back to China also faced challenges

Some students returned to China, but they still met frustration. The pandemic influenced both their physical health and mental health. Students are hard to communicate with professors and classmates effectively because they are in different time zones. 77.65% of the mini-survey participants complain of a decrease in class quality. They also face degree certification issues when looking for jobs in China as they didn’t stay abroad to complete education. There is a requirement of students to study overseas for at least six months to get degree certification. Fortunately, now, MOE commits that their certification will not be influenced considering this unusual situation. Those students also are concerned that they cannot find ideal jobs as the current employment environment is poor in China.  44.7% of respondents say that they have lost an internship or job opportunity abroad during the pandemic.

 Data Source: Daxue consulting COVID-19 student impact survey: Worries of Chinese students who came back to China during COVID-19

Incoming Chinese students studying abroad were concerned about whether they can start their program on time

The Coronavirus outbreak also influences incoming Chinese students studying abroad. Firstly, applicants cannot take tests like TOEFL, IELTS, and GRE in China, resulting in their incapability in applying for programs. Thanks to many universities’ policies, many of them got these tests waived. What worries them now is whether they can get visas and start their programs on campus on time. Notably, Chinese students studying in the U.S. are concerned about whether they can have eligibility to look for internships there. Only after staying in the U.S. for at least nine months are they are eligible for curricular practical training, meaning they can have part time jobs and internships. The limitation may make international students lose opportunities if they are starting programs with online courses.

Regarding international students’ predicament, many schools issued policies to help. Many schools allow students to defer to have more time to apply for visas. For example, Case Western Reserve University offers two options for incoming students who are unable to arrive at school on time. One is that students can defer to Spring 2021. The other option is to take online courses that contain a 25% discount on tuition in Fall 2020. Then, students can attend classes on campus in Spring 2021.

Data Source: Daxue consulting COVID-19 student impact survey: Worries of COVID-19 of incoming Chinese overseas students

Chinese students who plan to study abroad in the future also hesitated to apply

Plenty of Chinese students apply for overseas schools every year. However, this year, they meet many dilemmas. They are supposed to take their required tests now, but test centers cancelled tests. Some students planned to do summer research in overseas schools, but are currently unable to get visas and fly to those countries. Also, many Chinese students who got offers this year decide to defer their enrollment. They would like to attend schools next year. Providing that schools keep the class sizes to ensure program quality, the admission size next year may shrink. Of the students who were hoping to study abroad in the future, nearly half are receiving less support from family and peers in studying abroad, and nearly a quarter say they are now less interested in studying abroad.

Data Source: Daxue consulting COVID-19 student impact survey: Worries of Chinese Students Who Plan to Study Abroad in the Future

Most students are still positive about their overseas plans

The sudden COVID-19 outbreak changed people’s lives, and many students are reconsidering their plans. However, life still goes on despite uncertainty. Though external factors like cancelled tests, grounded flights, and worried parents may seem discouraging in the short term, a majority of Chinese students maintain their plans to study abroad.  Despite that COVID-19 impacted Chinese students abroad in many ways, the long term trend is that less Chinese stay abroad after graduation, this may contribute to that trend.

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This article How COVID-19 impacts Chinese students abroad: Survey of 400 students is the first one to appear on Daxue Consulting - Market Research China.

Matthieu David interviews Guillaume Rué de Bernadac, Founder & CEO at Académie de Bernadac. Etiquette is a tool that any person should possess whether they use it in professional interactions or social ones. In China, royal etiquette is a subject of interest and more and more people are enrolling for courses. How does Académie de Bernadac service the need for royal etiquette on the Chinese market? How do they market their service and how are the courses structured? Find out the answers to these questions and many more by listening to the interview.

• 0:15 Guest introduction
• 2:30 Académie de Bernadac – a brief company presentation
• 5:10 What prices and services does Académie de Bernadac offer?
• 8:03 More details about the size of the company
• 10:28 Royal Etiquette classes – why clients may enjoy them for different reasons
• 13:54 Why is Tier 1 of royal etiquette the most popular set of classes?
• 15:33 Adapting to the Chinese market – how have the lessons changed to accommodate Chinese culture?
• 19:00 Selling luxury – the brand of a product is all about emotions
• 20:17 Do clients apply etiquette outside their professional lives?
• 22:18 Adapting the lessons for luxury brands the function on the Chinese market
• 27:30 How does technology mesh with the heritage component of luxury brands?
• 28:57 Using live streaming for open advertisement
• 31:09 Best practices to get the most out of livestreaming
• 32:51 The importance of the Zhihu QA platform for Académie de Bernadac?
• 35:53 Specifics: how does Académie de Bernadac use Zhihu?
• 42:06 Misperception – how is French culture viewed in China?
• 44:11 Royal dreams can be motivators for etiquette learning
• 46:44 What book has inspired Guillaume Rué de Bernadac in his entrepreneurial journey?
• 47:57 What does Guillaume Rué de Bernadac read to stay up to date about China?
• 49:04 What can be learned from using WeChat?
• 50:07 What book about China would Guillaume Rué de Bernadac recommend?
• 51:38 If he has extra time what other business would Guillaume Rué de Bernadac pursue?
• 53:27 What success and failure have Guillaume Rué de Bernadac witnessed in China?

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This article China Paradigm 105: Teaching Royal etiquette to affluent Chinese is the first one to appear on Daxue Consulting - Market Research China.

Full transcript below: 

Matthieu David:  Hello everyone. I am Matthieu David, the founder of Daxue Consulting; a China market research company and its podcast, China Paradigm and today I am with Greg Nance. You are the founder of Dyad.com. Is that right?

Greg Nance: That is correct.

Matthieu David: And Dyad is a mentorship platform in China that has helped to earn – I was impressed by the number – 27 million USD of scholarships for Chinese students, mainly. First, I didn’t know it was that big as it could be that big as per the market and secondly on the amount you have to get. You raised funds in China from venture capital or CSV as far as I read and you have been named by people as Asia’s most promising start-up which have raised $1 000 000 in venture capital is what I was saying before that you raised money. You also are the co-founder of Money Think. I think that’s something that is very Chinese. We can’t stop with the one start-up. We have to create another one. 

You started Dyad.com in 2012 so, it has been some time already. You are among the club of entrepreneurs; entrepreneurs in China who have passed the 5 years Death Valley you know; where actually it is hard to raise a certain amount of revenues and a lasting business. Thanks very much for being with us. The first question is what’s your core business? So, what did you do? We understand that it’s a mentorship platform in China, but what do you provide to your clients and who are your clients? 

Greg Nance: Yeah so, it’s a B2C model at Dyad.com. We sell actually to students and their families and the core user is a student that has really big dreams for overseas study or an overseas career, but it’s really confusing going from somewhere in China or somewhere in India or Nigeria to you know; the United States of America and so our mentorship platform in China is a free-style platform meaning we have a lot of free resources; articles, videos, events, webinars; you can get all of that totally for free and after you’ve enjoyed some of those articles and videos and you’ve seen some of the insights and expertise and you say, “Hey, I want to work one to one with one of these expert mentors” and so our core business we actually create a program of pone to one mentorship customized and tailored for you, based on our experience building really great curriculums that help you build your background then inform you about your options and actually build a step-by-step game plan to help you get to that dream university, to secure that scholarship for Chinese students, to land that dream job. 

Matthieu David: I believe we understand a bit better how you work by understanding your business model. So, the students pay your mentorship platform in China or the mentor? Do they pay through the platform, do they have access to the premium videos? Could you tell us a bit more about what you’re selling as a product or a business model? 

Greg Nance: Yeah absolutely. So, from a business model perspective, a student or the family will actually pay Dyad.com directly. So, they pay for our company and then we actually match them with a team of mentors. The mentors will then work side by side with these; we call them scholars. That’s the name of our clients. We work with the scholars for the duration of their program. Programs can be short; in a month or two or 18 months, 24 months, 36 months and our mentors will work with them as they go and we will actually pay these mentors for the awesome work and the really great kind of inspiration that they are providing as they go.

Matthieu David: So, now I understand why you insisted when I introduced your company on the .com because it’s fully a platform. You’re contacting the mentors, the scholars sorry. You named them scholars; with the students. 

Greg Nance: That’s right so it’s all online. We were actually the very first of our kind. On September 5, 2012, when we launched there was nothing like us. We had seen that there were all these brick and mortar study abroad agencies providing advice and a lot of it is not very good, it’s not very helpful. It’s certainly not expertise. At the very best it’s based off kind of hearsay meaning, “We can do it better” and the .com and the digital reach that we have is allowed a student way better and a larger scale by helping students literally around the world through this information and through this inspiration.

Matthieu David: How much of the audience is Chinese?  

Greg Nance: About 80% of our clientele is Chinese and we’ve helped folks from 24 other countries, too.

Matthieu David: I see. Talking about platforms the challenge of platforms like any platform like Alibaba, Amazon, whatever; it is to certify the product or certify the supplier. Alibaba business model actually initially is not a manual transaction because if you buy like ten shoes you are not going to go through the platform. You are going to go from one bank account to another bank account so Alibaba makes money with certification. So, they tell the factory to pay for certification and then it goes to the supplier. So, how do you make sure that the scholars you have on your mentorship platform in China or the mentors are good enough in terms of training that you have for harmonization and finally that the fit is working? 

Greg Nance: Yeah that’s a huge question. Those are million-dollar questions. If you get that right you are going to build a great business. If you get it wrong, you’re not going to go very far. It starts for us with really, really great instruction and great mentorship. So, I start on that side of the platform because if you can really build a great product and if you can attract a lot of the right customers, they can get a lot of value from it. So, we recruit folks with outstanding credentials. You know, these are folks from Oxford, Cambridge, Yale, Stanford; really, really top-notch schools, but that’s not enough. That’s just the beginning. From there we have a rigorous interview process. We want to make sure that you’re the kind of person who is patient, who is friendly, who has really great insights and you’re not just some Brainiac who isn’t reflective and doesn’t know actually achieve that opportunity. 

I prefer to find people who; pointing at Harvard actually; they had a 3.5 GPA so they were really smart, but they didn’t have a 4.0. They weren’t able just to get into Harvard based on pure academic merit. It was the merit plus the insights around how they could actually put together the application. So, a lot of it is in the selection process. Then we have this training process to get you up to speed on a lot of the insights that we have collected over 7+ years and then it’s all about real-time quality control. So, our mentorship platform in China is built with scalable quality. In real-time we know how our customers are enjoying their product because they are giving us a ‘1-5 star’ rating, they are giving us feedback, they’re in touch with our enrolments and scholar success team and with that real-time feedback, we are actually able to improve the curriculum on an hourly basis. We’re able to know on a minute-to-minute level is this scholar satisfied? Are they getting value out of this? Are they confused? Are they lost because really applying for a university or a scholarship for Chinese students or a dream job overseas is stressful and it’s really anxiety-inducing. 

The more that we know where you are in any one moment, the more we can give real-time help and support and be responsive and so for us that’s our kind of you know; Alibaba sales certification. If we give great mentorship and a scalable quality platform, we are going to do some really, really good work. 

To the second part of your question; how about the customer side? Well, for us we are on a mission to expand education access and so the key thing is are you motivated and are you coachable and if you are motivated and if you are coachable, we want to help you. We want to give you great mentorship and if you are not motivated and if you are not coachable, we are not the right mentorship platform in China for you. Ultimately you can find someone if you need a baby sitter or if you need someone to write an essay for you. That’s not us. That’s not what we do, but if you want to be informed and inspired you are motivated and coachable; awesome. So, we look at all different kinds of students, different ages, different talent levels, different English-speaking capacity and as long as you’re motivated and coachable, we are going to do some great work together.  

Matthieu David: I talked about one number which is 27 million USD in scholarships for Chinese students and students from other countries. Would you mind sharing a bit more about the size of your business now in terms of the team, in terms of revenue, in terms of the number of students you have coached?

Greg Nance: Yeah absolutely so we have crossed 2100 customers; scholars over the 7 years. We have helped these folks do some amazing work. 40% of those folks get into the top 20 US universities and a full 45% get into one of the UK’s G5; like the top 5 British universities. So, we have really built I think a pretty powerful niche amongst… really motivated, talented students getting into really, really terrific universities. The number of products sold as you introduced me is the 27 million dollars and since actually, I made some notes for the show and we actually had a couple of really big wins, including another full scholarship to Oxford University so we have compiled the data there. The number is going to be even higher the next time around. 

That really fires me up. We have done all that and we have a team of three folks here at headquarters so it is extraordinarily lean that we have been able to build up a lot of this as we have gone and we’ve got 40 mentors that have been active on the mentorship platform in China doing a lot of the amazing work and one thing that I really enjoy and appreciate in this business is that it’s a bit of an accordion almost. It’s very seasonal so, students really, really need help with scholarship applications and university applications from like October through January and then from February to September most of the students are not really thinking about the application. They’re going through their day to day, they’re joining extracurricular, they’re joining extra studies and so we’re able to be flexible in the face of that. That’s one way that I think we have been able to both survive and to thrive for 7 years here. 

Matthieu David: How do you manage the cycle because I believe you are very busy from maybe July to prepare the season and then until March and April?

Greg Nance: Yeah, so we… there are definite challenges there for sure and I think it would be simple if it was more of an even keel and more like a level or growth pattern throughout the year, but that’s not the market dynamic and so for us, we seem to be deliberate in our preparation and so for instance, in the late winter when we assemble a lot of scholar feedback and we use that to rapidly iterate next years’ service offerings. 

We then actually fuel test a lot of that in the spring and we get lots of good real-time data from folks and a lot of our happy customers are then making referrals. “Hey, you should join Dyad. They are really impactful for me” and then we are able to then test out more of these materials with some of those early adopters for the next cycle. I’m also really big about work-life blend and so our team… and we encourage folks, “Hey, you love scuba diving? Go work on your next scuba diving certification.” “Hey, you love ultimate Frisbee? Let’s go play in some more tournaments this spring. Do you like hiking? Let’s go do some more of that.” So, you know my belief is that life is an ultra-marathon and you know; enjoy it while it’s there. Go push yourself and the different seasons of life, certainly and so that is one element that I have enjoyed; a bit of seasonality about the company. 

Matthieu David: I see. It’s a good way to see it because seasonality is usually very difficult to manage, but indeed if you see that part of the heat is more for yourself as a balance on work; that’s a good perspective. You talked about scholars, students and we are referring to you as a good mentorship platform in China which helped. How do you reach out to new clients, new students you would help? Is it online acquisition, is it offline, is it a blend of both of them, is it mainly word of mouth now?  

Greg Nance: Yeah so this is one of the biggest challenges. So, education in China for listeners who aren’t as privy is enormously expensive to acquire customers and so if you are in Shanghai or Beijing and you see a billboard with an education brand it is safe to assume that person is paying 100 000 RMB per week for that billboard. If you see an ad on the subway; that’s at least 5 or 10 thousand RMB for a small subway ad. If you see a banner ad on a website every click could be 300-1000 RMB. Every phone number that is acquired might be 500 RMB. So, you certainly can do the math and it is ridiculously expensive just to get leads to let alone clients in the space and of course there are thousands of education businesses all competing for the same people and that drives up the price. So, I give that as a key context here because we are a small outfit. Yes, we have raised funds in China, a million dollars in VC, but you can blow $1 000 000 very quickly in China’s education and trying to acquire customers. 

So, for us, we have been very lean from the very beginning. When we got this business started I was making a 5-minute video tutorial about how to write a personal statement or how to pitch yourself in a scholarship application from my dorm room at Cambridge University and then I would upload those videos onto Rinrin which it was like the big WeChat before WeChat back in 2012 and these videos got a little bit of traction because people found it useful, they shared them and then I woke up one day and it’s like, “Wow that video I made last week has a quarter-million views. Wow” and that was how we acquired the first customer, by content creation marketing in China. So, it is all about content creation marketing in China and showing our expertise and then getting people to find it valuable enough to share it and so it was a whole lot of free advertising and that mentality has guided us ever since. We have written over 1000 articles, produced hundreds of videos and I have spoken at thousands of events in China ranging from campus lectures to webinars to saying yes to all kinds of conference invitations and forum invitations and the result of that is we are able to advertise much, much more effectively and so a lot of that is literally shaking someone’s hand, learning about their goal, “Hey, we can actually help you. You’ve got a goal that is part of our expertise. Let us help you” and so, we have had far more success with that, with content creation marketing in China and word of mouth and of course we have also tested Baidu and I have wasted 30 000 RMB on Baidu and it literally went nowhere. 

I wasted a lot of cash on other online digital ad buys. I presume that there is a lot of; a suspicion that a lot of Chinese consumers have around stuff that is advertised online. You don’t know what it is and you are far more privy or far more likely to actually go with the first recommendation and so I think part of our business is just to do a great job and getting one friend to recommend to another and 40% of our customers will actually recommend a friend who then signs up. So, that is the very word of mouth driven and that is far more capital efficient for us and it allows us to really focus on our product and service instead of building a big marketing team. We limit the marketer at HQ because we are able to focus on client delivery and do the job. 

Matthieu David: Word of mouth is great because it shows that your product and your service is working, but it’s slow. Word of mouth is slow and it’s difficult to manage. How do you… what is your perspective on it? You say you don’t have a marketer, but you do content creation marketing in China. When you create content could you elaborate more on what you do now? It seems that it is very social and less SCO driven so less search and more social. Could you tell us a bit more about the content you create and how you accelerate the growth based on word of mouth? 

Greg Nance: Absolutely so the way we actually do it is our scholars or happy customers they do a lot of our marketing for us so they will actually write a WeChat article, “Hey, here’s what I’m learning from my mentor. My mentor went to Yale and got a scholarship there and here’s what they’re teaching me.” So, it’s very, very instructive. It’s not an advertisement. It’s not, “Hey, go buy from Dyad.” It’s very, very much, “Here is how this person has helped. Here is how they expanded my world view. Here’s this new perspective I have” and then here’s a pretty actionable intelligence; for those of you reading this WeChat article, “Go do this” and, “My mentor taught me about the importance of a morning routine.” “My mentor taught me like a better format to brainstorm.” “My mentor taught me how to ask a professor for a recommendation letter.” Basically, if you make it actionable and you make it interesting and kind of fun and engaging people then share it and so, what we’ve seen is like a lot of our articles will have thousands of shares because students find it useful and students want to help their friends out. 

So, that has been the strategy and you’re right it’s slower than going and buying a big ad buy on Baidu later today, but ultimately I think it will just convert at a much, much higher rate and that’s how we’ve approached that, so far and almost all of our customers from places like Honduras or Columbia or Egypt or France or Japan or Korea; those folks come through Google and actually they will Google things like, “How do I write the UPENN essay?” I am glad you asked because Google just ranked our article by that name, number one. “How do I ask for a recommendation letter?” Well, we’re on the front page. If you quote that and so people read this article and it’s like, “Wow, that’s really good advice from this guy from Oxford or this guy from Upenn.” “I want to like to connect. I want to figure out how I can actually write a great essay Upenn as it applies to me. I need a mentor” and we make it really easy to actually click to connect with a mentor right there on Dyad.com and before you know it we’re working with this Carlos; this wonderful Honduran who dreams of being a doctor someday and, “Wow that’s so cool. I have never been to Honduras. I have never met a Honduran to my knowledge and yet here we are helping a wonderful student from Honduras as he prepares his application.” 

Matthieu David: I see so you generate and do content creation marketing in China basically by the user or the client; the scholars and it is for you a way to generate content. What about in China? Do you publish directly to your blog or do you publish on WeChat or do you publish to all of the platforms plus some Q&A and so on? What are your favorite platforms? 

Greg Nance: Yeah two favorite in China are WeChat and Zhihu; the Q&A quorum like platform is a really, really nice way for us to show expertise because if you go and dig into some of Dyad’s answers what you’ll see is there will be a question: “Hey, how can I prepare my resume before I apply for a scholarship?” A lot of the answers before Dyad weighs in will be very, very like two or three sentences and not super insightful, very little depth and it will almost be a little bit snarky; like here’s a clever answer, “Do better stuff. Do cooler things.” That’s not very helpful to somebody who actually likes ha a genuine question and one of our scholars or one of my colleagues will weigh in with a very in-depth, point by point by point. You know, “Here’s seven things that you can do today to improve your resume” and it’s just sort of night and day and on that platform people then give thumbs up to the answers that they appreciate, that they want to up-vote so that more people see them and a lot of these questions Dyad will be the most up-voted. So, that’s our style. We don’t actually answer tons of questions, but those that we do we do a good job at and that’s our mentality. 

Matthieu David: So Zhihu is giving you visibility because difficulty with WeChat is that it’s somewhere closed. You cannot get onto WeChat through Baidu or through a search. You have to be referred. It’s good for word of mouth, but again it is slow, it’s closed, it’s more selective, but Zhihu is right by Baidu and people may go on Zhihu to look for questions. 

Greg Nance: Precisely and you know; I mentioned to you a few minutes ago that we need a coachable and motivated customer. That’s the key for us for this mentorship platform in China to work. If you’re on Zhihu and you’re looking up a question like, “How do I write a great essay” or, “How do I make a good CV”, or, “How do I prepare for an interview?” Well, boom; I know for sure that you are someone that’s motivated because you are actually doing the work. You’re not just paying some study abroad agents to write an essay for you or like draft out your interview prep notes. You’re doing the hard work here and those are the students that I am most motivated to help. I was a scholarship student myself and that’s why I started this business 7 years ago and because of that, we are able to find more of the right folks on Zhihu so I’m personally for Zhihu. I think it’s a great platform and I think it’s a wonderful, free resource that folks can learn from and I want to be a voice that will help more folks kind of inform themselves as they go. 

Matthieu David: It’s the second business I know which has been partly built on Zhihu and another one is a cosmetic business; she built it on Zhihu initially. It’s very interesting. I have a question about conflict of interest in your business. I feel that some players in the field have a conflict of interest and get payment from the university and from the students and scholars and actually they push some universities which may be less known, but need to fill in the quota of students. How do you answer this conflict of interest? 

Greg Nance: Yeah, I think it’s a really powerful one and you see a lot of players take a lot of shortcuts and they end up hurting universities, hurting students just to enrich their bottom line and so for us, we’ve actually never accepted a dollar. We’ve never made any revenue at all from universities and the main reason is we want to be a purely honest broker doing the right thing for each student and every student’s path will be different and we don’t want to, “Oh yes Utah Valley State University is where you belong.” Secretly I’m taking $5 000 from Utah Valley State University… We don’t want to be in that position and so we have certainly been approached by a variety of places, “Hey can we put this ad on your site” or, “Hey can we pay you 5 to even $10 000 for a placement?” But for us, we have said no because we want to do the right thing for students as we go and for us, we thought that that would help us build a stronger business. It really does the right thing for each student and plays that long game to do the right thing.

Matthieu David: So, that’s a topic in the industry that that is a challenge, right? Some players are getting money from both sides.

Greg Nance: They are and a lot of companies have done very, very well with both side model and I think some of them; hey, they have walked the right side of that line and I admire them for it. My view is there is a lot of grey in the China education model and as much as possibly can we stay on the right side of that line and the way that I have just analyzed it is as soon as you start taking some money or well, it gets much easier to take the next and the next and the next and before you know it you are doing things that you set out not to do and part of how I envisioned our business from the get-go is we want to clean up this market that has a lot of antiquated practices and a lot of unethical practices and we want to be a provider that does the right thing every time and as soon as you start kind of cutting corners your business can become unrecognizable to what you set it out to be and so it’s easier to say, “Nope, we just don’t do any of that” and that’s the position we’ve taken for 7+ years and it’s served us well enough. 

Matthieu David: You said that it’s a very lean business. At the same time, you raised $1 million USD from CV which is a very active venture capitalist industry in China; William, right? 

Greg Nance: William Baldini, that’s right. 

Matthieu David: Why do you raise funds in China then? 

Greg Nance: Yeah so our business over 7 years; we’ve gone through many different iterations so we started as a kind of a content platform and we were growing like crazy and for us to kind of assume a market-leading position we ended up raising $400 000 to help kind of supplement operations, grow our team as we go. As new competition flooded the market it was hey like, “This content play is not going to get us to the next level and so let’s actually look at how we can build a premium kind of mentorship opportunity in order for us to build a lot of the tech behind that; to build a great product,” we thought raising funds in China would actually help us to do so and we raised the back half of that million dollars. 

We actually haven’t raised since 2016 and we basically want to build the right tech and the right team to execute there. We have had really good fortune from SOSV, from 500 start-ups and from ToYou Incorporated which is an Aztech-listed education company and those are our four largest investors and they have been enormously helpful and valuable in us getting to where we are and we’ve now realized the beauty of lean after raising a million dollars. So, this is my first venture company in China and so you do a lot I think and you are learning as you go and there are some decisions that you might feel a little bit differently, but ultimately as long as you’re working with great people to keep powering forward with even more momentum. 

Matthieu David: Are you part of China Accelerator? 

Greg Nance: Actually no, I was roped in by William during batch 5 as a mentor and it’s been an amazing experience. I spent a lot of time at CA; the China Accelerator and I learned a lot through their methodology and I think the lean kind of style is really valuable and even a company of 7 years old like Dyad.com. 

Matthieu David: So how did you raise funds in China? So, we understood that the reason for raising money was to build tech and to cope with risk as well with scalability and initiating new products. How did you raise funds in China? How did you get the attention of them? $1 000 000 is not a small amount. 

Greg Nance: Yeah so part of this is luck and good fortune. So, I came to China and we started building this mentorship platform in China and we were pretty visible pretty quickly because Rinrin was putting us on their homepage like every week, a lot of our videos and articles were reaching on folks and so we were in a situation where investors were actually kind of reaching out to us, “Hey are you raising funds in China? Have you heard of our fund?” Those were cool kinds of opportunity back in 2013/2014 and that helped us put together the seed round with some great folks as we go. As we got to the second round of funding you know; our investors had watched us, had seen us execute and they were excited about what we were doing and they were excited and posted it to their friends to kind of fill out the round so you know; my kind of advice here and what worked for us is put yourself out there, go to a lot of meet up’, build your network. It helps to know a few folks and then critically important is keep people updated, keep them appraised of your progress and it could be as simple as a monthly note, “Hey, here are the three things we achieved last month. Here are the three things we’re going to achieve next month.” 

Then write that update again, “Here are the three things that we achieved and based on what I told you; here are the next three things.” You know I did that for the first like 3 years of the business and it basically showed investors that we have a nose for execution and we like to get stuff done and we like to move fast, we like to set big goals and get after it. That’s my mentality. Look, start-ups are fun because you can get agile, you can achieve big things, but use that to your advantage and really show people that you’re on kind of the founder’s clock and you are able to move fast, get stuff done. As simple as that sounds; that’s how we raised funds in China. 

We then got to talking terms, we agreed on a basic term and we got used to liking the simplest documents we could and you know; we paid a gradual $5 000 for legal fees for all of this which is unheard of low. You can burn a lot of cash on lawyers, but we built relationships and then used super vanilla documents, got the deal done for very little and got back to building the business. 

Matthieu David: That’s the thing actually when you meet with investors or people who want to invest; even business angels a no is never a definite no. If you keep updating them actually, they may say yes or they may refer you to someone else who would like to in this sector.

Greg Nance: Precisely, we’ve had a couple of really, really fun ones where the ‘no’ really means ‘not now’ and a number of times where this has happened; like, “Hey, can we do this thing?” No, and then it seems deflated. “Let me just keep you updated” and 6 months later you go out for another coffee and the investor then shares, “Hey we are actually raising a new fund and given your current growth let’s stay in touch on this” and a number of those folks have become you know; a coupe folks have said no through their friend and have written a check as an angel because their partner may not have agreed, but they see the promise. They write the check and in other cases, the fund is taking too long and they still come on board and so yeah; keep folks updated and we faced 80/90 no’s for the 13 yes’s that we got and we found the right 13 people who believed in what we were doing and helped us to get it. So, ultimately that’s what you need. You need one yes and that one yes then leads to a lot of momentum and it leads to referrals and even those no’s as you put it; that could lead to new intro’s, new introductions. 

Matthieu David: Talking about surrounding with great people; you have the board; an advisory board or board member. You have the CEO; I don’t know if it is China or another country and you have a secretary. First, how do you get them and secondly how do you incentivize them? How do you keep them motivated? 

Greg Nance: Yeah so, I am a huge believer in luck surface area. You have got to give yourself the best chance to get a lucky day in and day out because as an entrepreneur you have to kind of make your own luck sometimes. I’ll tell the quick story on how I met Ed Ramsay; the former CEO of Mc Donald’s. I was at a conference and we were at lunch. There were 12 people around a table; most were in their 20’s and there’s one gentleman who is clearly much, much older. HE was in his 70’s. He is sitting next to me and we strike up a conversation and while most of the gentleman around the table are talking about the party last night or how excited to go out and hit Burban Street tonight. I am chatting with this fellow and he is prepping me with questions about, “You’re in China. So, tell me a bit more about your business” and he’s asking me the kind of questions that show yeah, this is a really sharp guy. 

After 5 or 6 minutes of kind of giving him my elevator page, the MC heads up to the microphone and before I had a chance to get to know what this guy was up to the MC kind of clanks the glass and begins introducing today’s keynote speaker, “The former CEO of Mac Donald’s, Ed Ramsey.” This gentleman who is next to me stands up and he taps me on the shoulder twice and heads up to that microphone and in that speech one of his big messages was, “As young people, you need to take risks. Take more risks because you never know where your career can go when you aim big and swing for the fences.” That’s a beautiful message and then he literally points at the table and says, “Look, this young man here; he moved to China to start his own business. You can also take big risks like this and when you’re young the cost of failure is so low. You just go get a job like everybody else is doing” and I was like, “Wow the CEO of Mac Donald’s talking about me and my business.” 

So, at the end of it, I give him my card and I get one of his cards and I say, “Look I am learning so much as I go but I want to learn faster. I am building an advisory board and I’d be so honored if you’d join it” and he said, “I’ll stop you right there. Count me in. I want to help” and so you how do you incentivize? Well, in this fellow’s case he is made all the money that he needs for his life. He now is in a place where he wants to make a bigger social impact by contributing to mission-driven organizations and so for him the way that he does that is by helping mentor young business people that are working on mission-driven organizations and so then he doesn’t need you to know; stock options, he doesn’t need a salary or a commission or something. He does want to be updated about our progress, he does want to know that his time is being well invested and really that’s what I try to do with him and the air force secretary, with the former chairman of the Jefferson awards and the other kinds of luminaries that we’ve worked with, is how do we create a really inspiring experience for them and a lot of it is we are doing good work and we want to showcase that for these folks.  

Matthieu David: In this case, I feel that the skill that I needed is to know how to manage a relationship, how to know what is important to say, what would be interesting for them; where they will feel valued. That is the key.

Greg Nance: Absolutely and making… really being thoughtful about it, too. For instance, this fellow Ed Ramsey; what is he looking for here and I quickly look. Even if he had 100% of Dyad that would never move the needle for him financially compared to what he has already done. It’s just not going to be of interest and so what would be and then sort of doing a bit of analysis on that and then you know making sure that the time that he is investing in alignment with that value that he has. You are right; relationship management is an underrated skill within entrepreneurs. 

Matthieu David: Talking about the market; so, you said 80% of your clients, of your scholars and students you help are Chinese. How do you analyze the current situation of Chinese going overseas for studying? We are in a very specific moment. Chinese universities are getting better and better. Nottingham is in England for instance and some universities have invested to build campuses, to build strong relationships with Chinese universities so you can go to a good university by doing a degree in exchange. What is the constitution or market, from your side? 

Greg Nance: Yeah, it’s an interesting moment in a number of aspects. There are big opportunities in that because of the one-child policy there’s this decade+ law or megatrend where families are really trying to position their sole child and with the best possible education and a lot of families have decided, “Look, that means we’re going to do our Bachelor study in China and then we are going to spend $100 000 for a Masters overseas.” A lot of families, of course, can’t afford that. That’s a crazy amount of money for a lot of families who are kind of the middle-class bracket and so the way that we’ve identified the market is we are going to most effective and most helpful with that middle class and upper-middle-class people. Those that are super fluent; they don’t need scholarships for Chinese students. Those that are super fluent are going to work with a study abroad agent. They are going to just write essays for them and that’s less our market. 

So for us, we actually look at the slice of middle class and upper-middle-class that merely could use the value that we are able to provide through scholarship advisement and then we are going to focus on that cohort; overwhelmingly that cohort spends its bachelor years in China because if you do the math; paying $ 50 000 a year for 4 years for a bachelor’s degree. That’s crazy money for these folks. There is no way that their family can reasonably afford that and scholarships for Chinese students are exceedingly rare at the bachelor’s level. It’s extremely rare. So, that’s what we have kind of sliced this and I think that the middle class is getting larger. I think that the middle class is getting more discerning. I think they are looking for value and we are able to find folks and again through word of mouth and then do a good job and inform them of their options and then giving them the best possible opportunity. 

Matthieu David: How do you qualify the middle class? I feel that’s a definition that is actually evolving and not very clear. Middle class and upper-middle class in China, in terms of revenues or maybe in terms of as you said; association of what the need could be? 

Greg Nance: Yeah so, I don’t have a precise you know demographic definition or income definition. The way I kind of frame this is sort of a metal framework. When I ask a family about their budget for overseas study, if they respond with either a little bit of laughter or if they respond with, “There is no budget.” I put that person into sort of the fluent bucket where I’d say, “Look, they are probably not actually the right fit for our mentorship platform in China” because a lot of families that have that attitude; they are the kind of family that has paid for numerous tutors, numerous private travel opportunities, white-glove services in their daily life and real people with that attitude don’t actually do as well with our model because our model; there is no babysitting. We don’t call you up, “Hey Johnny. Here is the new draft of your essay.” It’s the opposite. We say, “Look, Johnny, you have got to actually do the hard work require to make this next draft” and that is not for everybody and for those that have been conditioned to kind of have handouts from private tutors and private agents and all. That just doesn’t go very well. So, so it’s not very scientific. 

It is very much if someone tells me, “I have got to make this happen for less than $35 000.” Awesome. You are my kind of person. We are actually going to make this work. Let’s look up universities that could fit that price range and let’s look up some scholarships for Chinese students where if we’re able to hit it, it would enable us to go to a place like Oxford. Just actually last week I got the happiest news. This lady Zuree; she wants to create sustainable fashion in China. That’s her dream. She wants to create a fashion industry that is employing poor people from rural places and that’s using low environmentally non-invasive water techniques because there is a lot of water that takes place in fashion, apparently. I didn’t know until I met Zuree and coloring and dyes which actually there is a lot of toxicity to that. She has actually created her own studio that’s done $10 000 000 in sales over the last 3 years from a 20-year old woman in middle-of-nowhere China and I said to her, “Zuree, you are incredible and you have a very tight budget. We are going to make this happen” and bam; we advised her on her public policy applications which she is aspiring to. 

We found a great program at Oxford which of course is way over her budget, but I said, “Look Zuree, we are going to find a scholarship for Chinese students for you because you are just such an incredible person and we are going to make this happen” and here a little over a week ago we got great news form the KWAK Foundation which is a Hong Kong-based family foundation and they are giving her $73 000 full scholarship to Oxford for this degree and that’s the moment we are saying that’s why you know; we do what we do and I am just real fired up about that. So, the short answer to your question is there probably are definitions that we could utilize. I don’t ask people their income and I don’t… but I have proxy and little signals that can tell me a little bit more about where someone stands. So, yeah…

Matthieu David: Very interesting. I see the impact of what you do on the life of some of your students and scholars. Impact on the trading world? Is it impacting now? 

Greg Nance: It is impacting us in ways that I would not have expected. So, number one, I think fewer student s are aspiring to the US and I think that will show up in the data if not this year then probably the year following. A number of folks think that President Trump is arbitrary and a number of folks think that this is racially motivating and others think it is sort of unfair bullying from President Trump and that perception affects the perception of reliability of the US as a commercial partner into the future and I think it undermines the US’s position and simultaneously England and Australia and Canada are making it even easier for Chinese to come. So, you basically have a place where the US is shooting themselves in the foot which is a bummer because my belief in America is strengthened by having really smart people in the country working in the country and studying in the country, but unfortunately, the president isn’t viewing it that way and yes…

Matthieu David: When we look at numbers it’s about 30 000 students; Chinese students in the US every year. 

Greg Nance: Yeah it’s huge and we are going to see if there’s a modest uptake or if that flattens out a bit because that, of course, was growing 10/12% year on year on year for like a decade so like there was huge growth and my prediction is that will slow until a lot of these underlying fundamental issues with the trading world are resolved. 

Matthieu David: Quick last questions. We sent to you before the interview to know more about how you manage your knowledge about China. What do you read to stay up to date about China? 

Greg Nance: Yeah so, a couple of resources. I am a big fan of connecting with really smart people and really great podcasts so Daxue Consulting; I think you have some really, really fascinating studios. I work with China Paradigm so I think this is a great resource and a second that I have come to really enjoy and just launched which is Mosaic of China with a fellow named Oscar who was a head hunter in greater China for almost two decades. He interviews fascinating folks and so I recommend these resources as gateways for folks to stay updated.  

Matthieu David: What books inspired you most when being an entrepreneur? 

Greg Nance: One of them is called the ‘Start-Up of You’ and it’s the story of treating your life as the CEO of your life and it is written by the founder of LinkedIn. It just inspired me to take bigger risks and all while you have a big A plan, a B plan and a C plan you have to have a really small Z plan or when everything goes wrong you still have a really good situation and that framework have helped me just take bigger risks. 

Matthieu David: The founder of LinkedIn who has a podcast as well; the Master of Skill, right? 

Greg Nance: There you go. 

Matthieu David: What book on China would you recommend, if any?

Greg Nance: I recommend ‘On China’ written by Henry Kissinger; the American diplomat and foreign policy reader. It is a really fascinating history of China. It’s very kind of understandable and a couple of hundred pages and how that leads to China’s current kind of psyche and world view.

Matthieu David: What productivity tool are you using in China?

Greg Nance: The productivity tool that I get probably the most value out of is One Note and actually it’s a Microsoft tool and is quite popular, I think where I record the various ideas and it’s really helpful so I use that to log ideas. I use the Pomodoro Timer to do 25-minute sprits for getting tasks and work done.

Matthieu David: What is the most surprising experience you have had so far in China?

Greg Nance: My most surprising experience was probably out in the Gobi Desert. I’m an ultra-marathon runner. I’m running 250 kilometers through the desert and a gentleman on a motorcycle was following me and going, “Wow, what’s this guy doing” and then when I finally took a break to eat a banana this gentleman offers me a cigarette and it was just this beautiful moment in the middle of nowhere bonding with this guy on a motorcycle. 

Matthieu David: Two last questions and actually those questions are inspired by Peter Juik; the founder of Business Strategy and one of the questions he is asking is what unexpected success you have witnessed in China? Something you have seen as successful and you were a bit surprised that it was successful. 

Greg Nance: Yeah one example of this would be actually two of my friends from college; they started a business called Strikingly.com. They went through a white combinator and are having incredible success in America with this product and they then moved to China to try to build a China version and I thought, “Hey it worked in the US, but the Chinese are different in market and opportunity.” They had to pivot and pivot and pivot and now their China business is even bigger than their US business years later and that really showed me that, “Look, if you have the right team and you are willing to be super agile and follow the data you can achieve just enormous results.”

Matthieu David: That’s the thing; when building a company in China even if it’s a subsidiary you are actually becoming an entrepreneur again because you have to iterate, you have to adapt to the market.  

Greg Nance: Exactly. 

Matthieu David: What unexpected failure; the opposite you wouldn’t have expected to see in China? 

Greg Nance: Yeah so, I look at a lot of large companies that are extraordinarily well-capitalized, brilliant people, leading them who come into China and they end up hitting their head on a brick wall time and time again and you know I remember back to like E-bay. I follow technology since I was young and I remember E-Bay entering China and I said, “Wow, like E-Bay is taking over the world. This is going to be amazing” and you know; now learning about that years later and what all contributed to failures of that kind; smart money. A Las Vegas gambler would have invested a lot of money on E-Bay succeeding in China and becoming a true global leader and yet E-Bay now is a total shell of itself and Amazon, Alibaba is others that have totally eaten it as lunch. That’s the kind of failure that even with all the money in the world; if you don’t have the right strategy or if you are not willing to be agile to follow the data you are going to fail and you’re going to fail hard.

Matthieu David: Thank you very much for your time. It was very inspiring to see how your company is impacting the lives of students especially this middle class which is going to be becoming massive in China and going to be looking for improving life and getting more experience. Thank you very much, Greg. I hope you enjoyed. 

Greg Nance: I absolutely did. Thank you. My Pleasure. 

China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.

Do not hesitate to reach out our project managers at dx@daxue-consulting.com to get all answers to your questions

This article Podcast transcript #84: A mentorship platform in China helping students access the best universities worldwide is the first one to appear on Daxue Consulting - Market Research China.

• 1:53 About the China Australia Millennial Project
• 5:43 Commitment of millennial participants
• 7:56 Online portion of the China Australia Millennial Project
• 9:54 Program interactions
• 14:35 Demographics of program participants
• 16:54 How does the China Australia Millennial Project reach out to prospective participants
• 18:35 Secret source
• 20:51 Andrea’s understanding of “millennial”
• 23:14 What do participants have to master to be at ease?
• 26:49 Fake differences and stereotypes
• 29:03 Working on improving China notoriously in Australian high schools
• 32:38 How to obtain rewards and board memberships and what do you get from it
• 37:51 Difference in education between the Chinese and Westerners
• 41:15 Inspiration from books
• 42:38 Sources used to stay up-to-date on China
• 44:13 How Andrea utilizes WeChat to stay up-to-date
• 45:17 Book recommendation
• 46:04 Which productivity practices/tools Andrea likes most
• 47:43 An idea that Andrea would like to work on if she had extra time
• 48:55 Most surprising experience Andrea has had in China
• 51:00 Something Andrea has done that only a few people know about
• 52:56 The most interesting thing in China for Andrea

 An innovative way of bridging business between Australia and China

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China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.

Make the new economic China Paradigm positive leverage for your business

Do not hesitate to reach out our project managers at dx@daxue-consulting.com to get all answers to your questions

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China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.

Make the new economic China Paradigm positive leverage for your business

Do not hesitate to reach out our project managers at dx@daxue-consulting.com to get all answers to your questions

This article [Podcast] China Paradigm 35: How to hire the right employees in Asia is the first one to appear on Daxue Consulting - Market Research China.