2021 changes in policy banning online English teaching to Chinese children was significant, with a potential reduction of the global online English-as-a-second language (ESL) market from its peak by ≈20%; but the market is growing again.
What happened to the online ESL market in in 2021?
In late 2021, changes in Chinese government regulations shook the online ESL community. Many watched in dismay as the largest section of the industry disappeared overnight. The Chinese Communist Party (CCP) issued legislation known as the “double reduction/720 policy” in July, which banned teachers based overseas from conducting any training activity in China to children, leading to a massive teacher layoffs. One company alone, VIPKID, hired more than 70,000 teachers at its peak.
Overseas-listed EdTech companies such as New Oriental lost more than half of their value in 2021 and most of the major online English tutoring companies that serviced the youth market in China either closed completely or quickly pivoted to alternate markets.
Online ESL in China; How big was it in 2021?
In 2017, according to iResearch, China’s online youth English training market was around 1.97B RMB ($3B USD) but there was “frenzied growth” in the following four years, so figures are likely higher. In the same year, China accounted for 61% of all revenues for Digital English Language Learning products in Asia Pacific, with the regional market estimated at $2.45B in 2018.
Using these figures, China likely represented ≈15% ($1.47B) or more of the global industry size (if measured by the $10B valuation). This includes both the adult and youth markets. This figure is likely higher, due to rapid investment in the industry between 2018 – 2021. $10 billion of venture capital had been invested into Chinese EdTech in 2020 alone. Some reports claim that the total Chinese market is half of the global Digital English Language Learning market, making it worth ≈$5B.
It is difficult to find exact numbers as most of the studies done in this area are very costly to access, but my estimation based on the available data is that the 2021 CCP policy changes may have possibly reduced the global online ESL market at the time by ≈20%.
Yet, the adult market in China is also very large and was not affected directly by the 2021 policy changes. ESL for Chinese adults (online and offline) had a reported value of 37B RMB ($5.5B) in 2019. Research by J’son and Partners (2021) indicated that online ESL comprises 22% of the total market, with adult online ESL making up 68% of the total market. Using these figures, we can estimate that the Chinese adult online ESL sector is potentially still worth $1.21B (22% of the $5.5B estimation above) or more.
So, what does that mean for the global online ESL market in 2024?
Despite the 2021 changes in the Chinese online youth market, it’s growing.
With more than 1.5B English language learners (up to 1.7B by some estimates) increasingly ‘going digital’, the move to online education during the COVID-19 pandemic greatly changed the face of the online ESL sector, in addition to the CCP changes.
The global online ESL learning market in 2021 was worth $10B (22% of the total market). In a 2023 report, it is predicted to grow at 14.5% CAGR over the next 8 years. Other forecasts indicate an even higher rate of growth (17.2% CAGR to $15.03B by 2030).
The Asia-Pacific region is still expected to account for the largest share of the global online language learning market, with Japan, South Korea, India and Indonesia making up the largest section of the student demand after China. Growth in Asia-Pacific is driven by “government initiatives to strengthen national education networks, the growing government focus on the education sector, rapidly developing economies, and increasing disposable incomes leading to increased internet penetration, which are propelling the demand for online language learning in the region”, according to Meticulous Research.
In 2024, the 21-30 year olds account for the largest share of the online language learning market in Asia-Pacific, followed by 13-17 year olds. Based on age group, under 18s are estimated to account for the largest share of the total online English language learning market, due to “the increasing digitization of public schools, rising number of English learners, significant increase in smartphone users, growth in student immigration for higher education, and growing e-learning platforms”.
However, adults over 18 are projected to register the highest growth in demand during the next few years due to “the rising importance of English in business and professional areas”. The Educational Tests (such as IELTS, PTE and TOEFL) and Businesses segment accounted for 46.29% and 35.51% of the market respectively in 2018.
Broadly, the global education market is set to reach $10 trillion or more by 2030, driven by population growth, as technology “drives unprecedented re-skilling and up-skilling in developed economies. Asia and Africa are the driving force behind the expansion”, with the offline English Language Learning expected to reach $40.6B by 2030 (CAGR of 12.8%).
Europe is the second largest market after China
Europe followed Asia-Pacific as the second biggest market for digital English language learning (16% of the total). The largest markets in Europe are Germany and France. In 2024, Germany is set to record the largest growth due to a need for professional and work-related language skills. Online tutoring platforms are seeing a growth in demand among students preparing for exams or seeking additional academic support.
In 2018, 96% of pupils in upper secondary education in the EU-27 learnt English as a foreign language. Maxim Azarov (founder of Novakid, a US-based teaching platform that caters to the European market) said in an interview that “…the popularity of online English language training for children has increased significantly since the pandemic began… it is still growing, and is poised to continue to grow exponentially”.
Other English language learning markets
In order of size, North America, Latin America, and The Middle East/Africa make up the remaining demand. Growth from Pakistan, Brazil and Mexico (among many others) is increasing offline and so may be reflected in the online space in the coming years.
According to a Preply Inc. (U.S.) survey report in 2023, people in the United Arab Emirates (UAE) want to learn English the most based on search engine results. In 2021, in the UAE, an average of 34,800 searches were conducted for the term ‘learn English’. Other countries that search for terms related to learning English the most include the Philippines, Sweden, and Israel.
Summary
China was, until 2021, the largest segment of the digital English learning market, followed by Europe. Changes in Chinese policy regarding online ESL tutoring for children reduced the global online ESL market by potentially ~20%.
Yet, figures indicate 14.5% – 17.2% growth in the online ESL / English Language Learning industry by the end of the decade. The COVID-19 pandemic accelerated the uptake of online education and digital learning is set to continue to increase the share of the industry. There are currently 12 million English teachers worldwide, yet The British Council states that “the world needs to add 1.5 million teachers per year on average, approaching 100 million in total in order to keep pace with the unprecedented changes ahead”.
It appears that the online ESL market will continue to grow in 2024 and beyond.
Those who are looking for an online ESL teaching job will also find demand for their services in the forthcoming years, especially from Asia and Europe. Find out more here. With the potential growth of online English language learning platforms and peer-to-peer learning, the landscape is great for independent, freelance English teachers and tutors.
Importantly, while global trends can help paint a ‘big picture’ for teachers, having good relationships with and an intimate knowledge of the needs of your students is important too. Students are seeking high quality tuition from passionate educators.
If you’re interested in starting your own online independent, freelance teaching business, please express your interest in coaching from a teacher with 10+ years in the industry and extensive experience in attracting private students at $100AUD/hr.
Kate (GradCertEd TESOL) studied a TESOL certificate in 2010 and has been teaching English ever since. Tutoring ‘freelance’ for many years before starting an independent teaching business, she began Teach English Online to support Australians and New Zealanders to do the same. Just starting out, want to apply to one of the 300+ global companies or build your own small independent teaching business? She can help.