- The global online English-as-a-second language learning market in 2022 is worth up to $10 billion USD (22% of the total ESL market).
- The online ESL market has grown during the COVID-19 pandemic, with the global education market set to reach $10 trillion USD or more by 2030.
- 2021 changes in CCP policy banning private English tuition will impact the industry significantly but by exactly how much is still unknown. This is a potential reduction of the global online ESL market from its peak by ≈20%.
- Adults comprise ≈68% of the global online ESL market, so there remains a large Chinese adult online ESL segment despite recent events, in addition to both growing European and additional emerging markets of all ages.
All figures below are in USD.
What happened to the online ESL teaching market in China in 2021?
Recent changes in Chinese government regulations relating to the provision of after-school tutoring services are big news in the online English community right now. In the latter half of 2021, many online English teachers watched in dismay as a significant section of the online English tuition industry all but disappeared overnight.
The Chinese Communist Party (CCP) issued legislation known as the “double reduction/720 policy” in July of 2021, which banned teachers based overseas from conducting any training activity in China to children. This lead to a large amount of online English teacher layoffs. One company – VIPKID – hired 70,000+ teachers at its peak.
This was followed by similar announcements by almost all the online English tuition providers/Edtech companies based on the Chinese mainland in the following months. The last major player in the Chinese youth market to concede was DadaABC, announcing that “there will be no more classes scheduled” after December 31st (2021).
These measures have also resulted in overseas-listed EdTech companies such as New Oriental and TAL Education Group losing 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 closing completely or quickly trying to pivot to alternate markets.
At this early stage, it is difficult to say what the full impact of this decision may be and finding data about the industry from a ‘big-picture’ perspective can be difficult, but we can get a broad overview.
By taking all of the most recent, freely available information about the market, I’ll look into what we do know about online ESL current and my best guess as to the impact of these recent policies. I’ll also address what teachers (particularly independent ones) might want to consider in order to stay competitive and be successful in the industry moving forward.
The Chinese online ESL market; How big is/was it?
In 2017, according to iResearch, the size of [China’s] online youth English training market [was] around 1.97 billion RMB ($3 billion 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 Asia-Pacific digital language learning market estimated to be worth $2.45 billion in 2018.
Using these figures, China likely represented ~15% ($1.47 billion) or more of the global industry size (if measured by the $10 billion valuation in 2021) by revenue in 2017. This includes both the adult and youth markets.
This figure is likely higher though, due to rapid investment into the industry between 2018 and early 2021. $10 billion of venture capital had been invested into Chinese EdTech in 2020 alone. Some reports claim that the total Chinese market takes up about 49% of the global Digital English Language Learning market, potentially making it worth ≈$5 billion.
It is very difficult to find exact numbers as most of the studies done in this area are very costly to access. My estimation based on the available data is that the recent CCP policy changes have possibly reduced the global online ESL market by ~20%.
Yet, the adult market in China is also very large and not likely to be affected directly by recent policy changes relating to after-school tuition. ESL for Chinese adults (online and offline) had a reported value of 37 billion RMB ($5.5 billion) in 2019.
Research by J’son and Partners (2021) indicated that online ESL comprises 22% of the total market and globally, adult online ESL makes up 68% of the total market. Using these figures, we can estimate that the Chinese adult online ESL sector is potentially worth $1.21 billion+ (22% of the $5.5B estimation above).
Should freelance teachers teach Chinese adults?
If the J’son and Partners’ global figures are used, the Chinese adult online ESL market is extremely significant in size. Yet, it is unlikely that this will scale in the same way that has been done with children in the past decade. Whereas Chinese parents have been willing to invest heavily in years of tutoring, only 14% of adults stick with English learning products for more than one year, with a majority losing interest after 1-3 months. For teachers, this means an opportunity in this market, just note the higher turnover of students.
A new black market emerges.
Unsurprisingly, almost immediately after the Chinese Government announcements, teachers began to attempt to make contact with their former students and parents sought to find alternate ways to access the tuition that has become so integral to student success in a high stakes exam culture.
A large number of Facebook groups suddenly popped up overnight with newly freelance teachers quickly trying ways to set up websites that processed Chinese payment methods and to negotiate the sometimes tricky world of social media apps ‘behind the great firewall’. For freelance teachers wanting to take the risk of navigating this new void in the market, ‘going underground‘ was “skyrocketing private tutor rates“.
Understandably, there is a reluctance from many teachers to approach students and families in the face of uncertain legality and potential repercussions, especially for Chinese citizens. For those in this camp, it is worth looking at the global picture and the size of markets elsewhere.
The global online ESL market in 2022 (without China): What does it look like?
Despite China, it's growing.
With more than 1.5 billion English learners (up to 1.7 billion by some estimates) increasingly ‘going digital’ – in addition to the traditional English language market – the worldwide COVID-19 pandemic has greatly changed the face of the online ESL sector.
It was estimated the global online English-as-a-second language learning market in 2021 is now worth $10 billion (22% of the total ESL market)*, with ESL for children estimated at $3 billion (32% of online ESL in 2021). The Educational Tests (such as IELTS, PTE and TOEFL) and Businesses segment accounted for 46.29% and 35.51% of this number respectively in 2018.
Broadly (online and offline), the global education market is set to reach $10 trillion or more by 2030, driven by population growth in developing markets and expansion, as technology “drives unprecedented re-skilling and up-skilling in developed economies. Asia and Africa are the driving force behind the expansion”.
There are currently an estimated 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 in education around the world”.
Europe is the second largest market after China.
Europe followed China (with 16%) as the second biggest market for digital English language learning. In 2018, 96% of pupils in upper secondary education in the EU-27 learnt English as a foreign language. The largest ESL markets in Europe are Germany, France and Russia.
Maxim Azarov (founder of Novakid, a US-based teaching platform that caters to the European market) said in a recent interview that “The popularity of online English language training for children has increased significantly since the pandemic began. A year later, it is still growing, and is poised to continue to grow exponentially. We believe this is a consequence of the wider availability of quality online English learning platforms for children, the expansion of career opportunities for those with a good command of the English language, and an increase in remote working”.
Growth in the demand from India, Indonesia, Pakistan, Brazil and Mexico (among many others) is increasing offline and so may be reflected in the online space in the coming years.
China was, until 2021, likely the largest segment of the digital English learning market, followed by Europe. Changes in Chinese policy regarding online ESL tutoring for children possibly reduced the global online ESL market by ~20%.
The major difficulty is accurately separating the true size and demand of the now restricted youth segment from investment and profit figures and therefore this is an educated guess.
Yet, while there are indications that this will be significant in the short term; there is still increasing global growth and if the $10 billion estimation is correct, the current online ESL market is still worth ≈$8 billion dollars and counting.
The COVID-19 pandemic has accelerated the uptake of online education and if trends continue, digital learning will likely increase from the current minority share of the ESL industry. With the potential growth of online English language learning platforms and peer-to-peer learning, the landscape is great for independent, freelance English teachers.
The announcements by some of the major Chinese companies that they intend to pivot to other non-China markets indicates that they too believe in this growing global potential. There is still a notable Chinese market for adult language learning, irrespective of CCP policy. Teachers who decide to continue working in the (now more challenging) youth Chinese market, despite the legalities, are likely to find significant demand. Those who look more widely may be surprised by how many students are really out there.
From the figures that we can access, the online global English language learning market is growing and set to continue such growth into the foreseeable future, with or without China.
How do you think the online ESL market will change because of China’s policy changes? Comment below.
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 will ultimately result in much greater dividends. Whether online or face-to-face, 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 and retaining private students at up to $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.