Asia Market Opportunities
Asia is expected to rebound faster than other economies post pandemic. According to the McKinsey Global Institute, COVID-19 has accelerated technological adoption and innovation in the region. Its highly adaptable digital population has continued to embrace new digital services enthusiastically over the past years. Asian companies have continued to scale up even during the COVID-19 pandemic to enhance profit pools and unlock productivity through accelerating digital adoption.
No EdTech market in the world is as exciting as Asia’s, with hundreds of millions of students, a cultural emphasis on education, a growing middle class, government support, and an abundance of capital. Asia Pacific is anticipated to become the most lucrative market, growing at CAGR of 19% from 2022 to 2030.
Massive market size with over 600 million K12 students
China’s college-educated talent pool is expected to number 195 million people, more than the entire U.S. labor force
Average family could spend up to 40% in education related products and services
The APAC region is also likely to witness the highest growth rates in corporate e-learning, reaching to USD$90 billion by 2026
Different Government funding schemes to support digital reskilling and upskilling and EdTech development
Abundant pools of family offices with more patient capital
Plenty of growth and exit opportunities, with considerable corporate interests in acquiring digital learning contents, diversifying their portfolios, strategic investments as well as M&As.
Market opportunities in China generally lie in teacher training, vocational education, higher education and enterprise learning. At the moment, the greatest opportunity for overseas EdTech businesses probably lies in the higher education sector. The Mainland government encourages international cooperation at the higher education level. In the wake of the pandemic, the Chinese Mainland Education Bureau and Seven Departments ask universities in the Mainland to cooperate with colleges worldwide to build joint programs in Chinese schools for students who could no longer travel internationally. Universities in the mainland and Hong Kong are encouraged to offer admissions to overseas students, especially countries in the “ “Belt and Road Initiative”. The Initiative seeks to connect Asia with Africa and Europe via land and maritime networks with the aim of improving regional integration, increasing trade and stimulating economic growth.
Hong Kong and GBA
The Chinese government has a strategic plan to build Asia’s Silicon Valley out of a cluster of 11 massive, hyper-connected, prosperous cities in South China. The city cluster, called the Guangdong-Hong Kong-Macao Greater Bay Area, is the world’s 11th largest economy, ahead of Russia and just behind Canada. It is also one of the most prosperous regions of China, with a population of over 70 million and a GDP of USD1.5 trillion – 2 times the value of the San Francisco Bay Area. The region is home to 3 of the world’s top 50 universities and tech behemoths like Tencent, Huawei, and DJI. It finances, manufactures and ships more products than any other similar place on earth.
Hong Kong is the most cosmopolitan Chinese city that speaks the global business language. It serves as the Greater Bay Area‘s leading hub for international finance, legal arbitration and professional services. The Hong Kong Stock Exchange is a leading IPO market in the world. The city also has one of the world’s lowest tax rates and the world’s highest density of ultra-high-net-worth individuals.
Over the recent years, Hong Kong has developed itself into an Asian startup hub, with over 3,000 startups operating in the region. It is second to none in terms of its convenience, efficiency, energy and excitement - an ideal place for entrepreneurs to pursue and realise their dreams and ambitions. Hong Kong people are known for their resourcefulness, diligence, can-do spirit and business ethics. They are also one of the most trend conscious and tech savvy. Notwithstanding a small domestic market, Hong Kong has a diverse school system with different curriculums and makes it a perfect testing bed for new products and services in Asia. And despite its small economy, Hong Kong’s history as an international trading hub has resulted in a high concentration of businesses with global connections. It is an ideal place for ventures looking for partners to expand beyond their home markets.
Hong Kong is also a regional education hub for higher education. The University of Hong Kong, the Hong Kong Science and Technology University and the Chinese University of Hong Kong are ranked in the world’s top 50 and Asia’s top 10 by the Quacquarelli Symonds University Rankings. Hong Kong universities also host some of the world’s best business administration and executive business management programmes. The 8 publicly funded universities in Hong Kong have been granted over USD20M (2021 – 2023) to facilitate the development of virtual teaching and learning.
Strategically located within close proximity to all major cities in the GBA, Hong Kong serves as a launch pad to the global market, a fundraising centre, a R&D/test bed for Asia, and a global supply chain management center
Shenzhen is the R&D and innovation hub of the GBA. Known as the Silicon Valley of China, it is the home of Chinese tech giants such as Tencent, Huawei and DJI with an abundance of startup accelerators and other support facilities. Its investment in research and development is one of the world’s highest, matched only by South Korea and Israel.
Dongguan is fast becoming an advanced manufacturing centre of China, with electronic information manufacturing as the pillar industry. Today one in four smartphones are made in Dongguan. The Songshan Lake High-Tech Industrial Park is a global startup incubator focusing on robotics and smart hardware.
Guangzhou functions as a business and trading center, a transportation hub, as well as a technological, educational and cultural centre in Guangdong.
Bill Ning, Founding Partner, Blue Elephant Capital
The China market would shift from K12 to Y12, including universities, vocational training and distance learning