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The coronavirus epidemic increases the potential of e-learning. Education in times of crisis

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Learning in the Middle Kingdom is really a well-known thing that parents spend huge sums on. Without education, there is no chance of a good job, the competition is huge. 17 years ago, when another coronavirus, SARS, swept through Asia, the epidemic was no excuse for the worse result on the school-leaving certificate there. Today, technology, namely e-learning, comes to the aid of children and young people locked in their homes.

At the turn of 2002 and 2003, the Internet was only developing the framework of functionalities, which then became known as e-learning a few years later. Until recently, it seemed that the potential of such services would be unlimited. From their home sofa, the Internet users interacted with teachers from all over the world. The model of online learning has been named MOOC (Massive Open Online Course) and the year 2012 has been named its golden age. At the time, it was assumed that the Western world would subscribe en masse to digital lectures of Western universities online. But then China entered into action.

The average Chinese citizen has only 7.5 years of schooling behind them, but the new generation born after the country opened up to trade with the world is better educated. The Chinese Millennials, for whom 1995 is taken as the boundary date, were sent much more often to the universities. For us, the comparison of 20% of students from the new generation to this lower average of almost three times remains just a statistic, but for the Chinese it meant a colossal change in lifestyle.

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President Mao died in 1976, the opening reform plan was approved two years later, and it was only after the break-up of the USSR in 1991 that serious trade was launched. The beginnings were difficult, because it was necessary to convince the world to remember the massacre of students fighting for democracy in Tian’anmen Square in the centre of Beijing in early June 1989. The previous generation remembered the campaign against the intelligentsia between 1966 and 1976, when the madness of the Cultural Revolution swept through the country. Teachers could then be beaten with impunity with belts finished with heavy buckles. The blows in the name of meaningless ideas were struck by children and teenagers.

With the opening up of China to the world, it was necessary to invest in a new generation to give it a chance in a new reality. This was done with joy, because the times of poverty and hunger were remembered. Children got everything they wanted in the new China. In addition, years of birth restrictions, so-called single-child policies, have led to an imbalance between boys and girls. The state allowed for one child, and in the reality there, only a male descendant guaranteed financial security for parents in their old age. A girl was only generating costs for the family, and in the past, it was still expected that she would leave home and start her own family.

The Millennials were therefore, on average, the boys on whose support two pairs of grandparents and parents worked. Six people spent money on education. The Chinese high-school certificate, known as Gaokao, was difficult to pass, and the competition was learning diligently after hours all year round. Currently, the inhabitants of major cities such as Beijing and Shanghai, on average, are putting up an average of one and a half thousand dollars a year for extra activities for their children. One third of them spend between seven and fifteen thousand, and one quarter more than fifteen thousand dollars on this. To know the scale of such expenditure, a good salary in China is around USD 40,000 a year.

It would be difficult to find someone who thinks that a child only needs schooling. Nearly everyone takes advantage of extracurricular activities, and this makes the market for these services worth USD 75 billion. An additional USD 13 billion is being spent on the English language learning segment, considered to be a key element in making a career.

E-learning in China has started for good in the field of learning English via the Internet. The best-known service for this is VIPKid, which is currently used by 600 thousand students. The motto for this company was the access to “American education at home.”

In 2016, companies organizing online tutoring began a transformation into a common direction. They have started to offer learning in large groups, called large classes, on a massive scale. Several hundred pupils (sometimes several thousand) have access to a main teacher with a status comparable to that of a celebrity and to several of his or her helpers dealing with smaller parts of such a “class”.

An example of a company that has successfully entered the New York Stock Exchange with Chinese e-learning is Genshuixue (referred to as GSX from the first letters of three syllables of the name). In Chinese, the name means “from whom should I learn?” The company was established in 2014. It was founded by Chen Xiandong, who for 15 years gained experience in New Oriental, one of the largest educational empires in China.

The second player that counts most is Yuanfudao, literally the “monkey teacher”. The market has been present since 2012 and from the beginning the emphasis has been on preparing for the Chinese high-school certificate. Yuanfudao developed artificial intelligence algorithms that checked users’ homework.

Chinese e-learning very quickly overshadowed the MOOC model. In 2018, twice as much was spent in the Middle Kingdom on investment in this industry as in the US, and in 2019, a total of three billion dollars’ worth of capital was raised, even though 60% of the venture capital investment sector collapsed. Market analysts estimate that e-learning could grow tenfold to USD 53 billion in the next three years. In three years’ time, 40% of tutoring may already be done online.

Learning in China pays off not only for students but also for teachers. For really good results in the Gaokao exam, a lecturer can count on a bonus of thousands of dollars. Approximately 10 million young Chinese people take their high-school certificate exam every year, of whom only 40% have a chance of a good education.

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The current Covid-19 coronavirus crisis has forced people to stay at home. The schools are still closed, but the Gaokao will take place in a few months’ time. The virus will certainly not become an excuse to explain a worse result, so e-learning is experiencing a real increase in interest. GSX and Yuanfudao have made their courses available free of charge, so new users are already counted in millions. Companies are currently worth five and three billion dollars respectively. Valuations are bound to increase as GSX was able to gain 10% and nearly 19% a day in just two sessions on the NYSE. Yuanfudao, on the other hand, has recently raised ten times more funds from investors than his stock market rival before his debut.