The E-learning Miracle

By+staff+reporter+ZHOU+LIN

AUGUST marks the first anniversary of xue.taobao.com， an online edu- cation platform along the lines of Taobao （the Chinese online shopping website equivalent to eBay and Amazon）. Nipping at its heels， having appeared last November， is Googles new product Helpout， a C2C（consumer-to-consumer） e-learning platform. This successive branching out of Internet giants into the e-learning marketplace will undoubtedly have a positive impact on both online subscribers and retailers. Before the Internet became commonplace， high quality education was beyond the reach of the broad masses. Now it is accessible to everyone.

Huge E-learning Potential

Having gained his MA in engineering management from a prestigious university， Chen Bo started work at a state-owned enterprise as project budget manager. Last November， after subscribing to an online course on Taobao， he obtained certification as a level-A cost estimator. “You can buy whatever you want on the Internet. Buyers ratings and reviews make it easy to select the cheap- est， most appropriate options. Nowadays more than ever， time is money. Elearning saves time and energy and also gives us the freedom to learn whatever we need at any time.”

Chen Bo went on to say that besides career development considerations， online learning also complements college courses that are out of pace with todays social requirements. “Young engineers lack the practical experience gained through field work. But a well-designed online learning program makes an engineering project as clear to me as if I were actually on site.”

E-learning in China has gone through three stages – from distance education in rudimentary forms and formats， to online programs run by conventional training agencies， to direct involvement and greater contributions from Internet companies. Both business model and products associated with this new type of learning have evolved into multiple choices with immense consumer appeal.

Taobaos riposte to pervasive skepticism after the announcement of its entry into the education domain was， “We are providing tools – the educational equivalents of sand， cement， and shovel.”Taobao has since verified this intent. Its xue.taobao.com operates as a platform where customers purchase knowledge and skills in the same way as they would goods – a “supermarket of learning for all” as the company describes itself. As in any store， the website displays the products of all relevant commercial concerns， and is responsible for their marketing and maintenance. Its profits come from fees charged to suppliers for placement of their products， and commissions on sales. As an online business for both B2C and B2B customers， Taobao provides a platform for both businesses and individuals to optimize their self-worth and transform conventional education modes.

Educational expenditure accounts for a substantial proportion of family consumption in China. Deloitte & Touche statistics show that the worth of Chinas education market stood at RMB 960 billion in 2012. Taobao reported education merchandise sales of RMB 330 million for that year， one third of which came from textbooks and reference books and RMB 200 million from course subscriptions.

The 2012 Sohu Education Industry White Paper shows that there is a robust demand in China for academic and vocational training and professional qualifications， 57 percent of the total stemming from workers.

New Oriental CEO Yu Minhong once asserted that modern technologies like the Internet would precipitate over the coming three to five years a massive reform of online study. Some start-ups have already sworn to “duplicate the Taobao model in education.” Xue.taobao.com， with its strong base of potential customers， thanks to the companys established market status and reputation， has indeed unleashed a revolutionary tide of e-learning. Moreover， independent of schools or any other institutions， Taobao has relative autonomy as to the pricing of its quality brand.

Pinpoint the Crux of Traditional Education

Mei Jingsong， supervisor of the educational section of sina.com.cn， has noted a steep rise over the past year in e-learning and the big data industry in China， and that a number of enterprises have joined this gold rush. The key to success for them， he says， is to pinpoint and meet the diverse educational needs of different client groups.

Gong Haiyan resigned her position as CEO of jiayuan.com， a dating website， in 2012 to set up tizi.com， an educational resource sharing platform， which officially launched last November. Her dream is to build a “l(fā)adder” （tizi meaning ladder） for students， their teachers， and also their parents， from kindergarten through to 12th grade， namely K12 education.

The websites surveys of hundreds of teachers and families have given Gong a deep understanding of issues of concern among the three groups that the current educational system has failed to address. From teachers point of view they include the oppressive burden of class preparation， compiling exam papers， and marking. Students complain about the ineffectiveness of passive study， the dearth of up-to-date teaching resources， and their reluctance to ask teachers questions in front of the whole class. Parents， meanwhile， worry about their inability to guide children through their studies and their lack of understanding about the realities of their childrens learning experience.

Gong Haiyan sees all these problems as opportunities for online learning and the incubation of a huge market. Tizi.com is a bid to create an e-learning community that helps students develop individually. Intensified practice of the intelligent assessment system helps students pinpoint their weak points. Parents can follow their childrens learning process either through smart phones or computers. The website also features an intelligent filtering system that blocks access to inappropriate content. This reassures parents of their childrens protection when using the Internet.

Tizi.com has reportedly signed contracts with excellent teachers at primary and secondary schools around China. They contribute curricula and examination preparation materials that are available to all registered users. Teachers throughout the country can refer online to the 10 million courseware and papers as their daily work demands.

Tizi.com is a boon for students in remote areas， offering them free assessments of their learning level and the opportunity to take part in online Q&A sessions. The website also enables students from less developed and rural areas or who are not at top-tier schools to share quality teaching resources.

Establish a New Profit Model

The 2013-2014 China E-learning Development Report， released by iResearch， shows that the market scale of online learning in China in 2013 was RMB 83.97 billion – 19.9 percent higher than the previous year. The figure is predicted to surpass RMB 160 billion in 2015， implying massive development of Chinas online learning market in the years ahead.

Michael Gao， director of BD & Research at Nielsen Online， a service branch of global market research firm the Nielsen Company， recently remarked that 200 million people participate in online learning in China. The year 2013 saw 51 corporate investment projects in the sector， including 44 of venture capital， with a US $82.4 million value of disclosed transactions. Such extensive coverage of individuals and large-scale venture investment inevitably leads to educational reform.

Generally speaking， e-learning maintains a sound cash flow because terminal consumers purchase educational products directly online. Profits come mainly from charges for content， added-value service， software instant service fees or monthly service fees， commission， and advertising.

Xue.taobao.com earns its profits from the big data collected online from its businesses and individual entrepreneurs， and from service fees. Depending on the existing online resources， Taobao creates new values in improved service. For instance， when New Oriental offers a program， it is concerned with little more than teaching content. But Taobao can easily accommodate experience sharing， communication and evaluation of curricula on its platform. In the past two years， Taobao has come to the realization that the traditional sale and purchase model no longer satisfies the demands of either entrepreneurs or consumers. The newly built platform instead fuses product， learning process and off-class evaluation， in hopes of forming a self-organization via contact between teachers and students， students and students， and teachers and teachers. SNS， namely social networking services， will thus propel its own development， closely and jointly combining the two sides.

According to recently published Taobao statistics， the sales volume of its educational program in the three months from April to July 2013 exceeded that of the whole year of 2012. The year 2013 witnessed a gross volume of more than RMB one billion. However， the company claims that it cares more about the daily UV （unique visitor） flow than trading volume. The number of unique visitors that log on to the website and how many take part in the learning interaction are deciding factors for its business prospects.

In times of big data industry， Taobao has the advantage over its competitors. It is now working on how to draw more customers and increase hits， and how to improve the platform to ensure a better experience for both content providers and consumers. Of those with the ambition to join in， the two types of operators that are most welcome are either versed in both the rules of E-business and the rules of education， or know how to provide products that best serve students. Anyone with these combined abilities will strike Taobao gold.

Taking into consideration the large sums invested in e-learning， its users spend relatively little. Around 66.7 percent of online purchasers intend to spend less than RMB 50 on each lesson. And bearing in mind that Chinese Internet users are used to “goods for free，” E-learning companies await a more mature market.

Interaction is integral to education. In comparison to the animated discussions between teachers and students in actual classes， those in visual classes often seem casual and fragmented. Recently， MOOC has experienced dramatic development in China. But in spite of its popularity， only five percent of users persist in their courses and obtain their academic certificates. The learning process is hard， even for college students who sign up.

Better updating of users experience is the key to further development of online learning. Customers must be willing to pay for their study and find it an edifying process. Pei Binfeng， who is in charge of the xue.taobao.com program， told his colleagues to accept that， for years to come， this endeavor will be a public welfare undertaking， rather than one solely for profit.