Private tutoring leaders New Oriental Education & Technology Group and TAL Education Group are two of the largest and most successful education companies in China. Both companies provide a wide array of services, including after-school tutoring, test preparation, language training, and online courses, and have seen significant growth in recent years.
New Oriental Education & Technology Group, commonly referred to as New Oriental, was founded in 1993 by Yu Minhong, an English teacher from Hunan province. The company started with a small classroom in Beijing and has since expanded to over 1,400 learning centers across China, as well as branches in the U.S., U.K., and other countries. As of May 2021, New Oriental had a market capitalization of over $17 billion.
The company’s main revenue sources are its language training courses and test preparation services, which include classes for English proficiency tests like TOEFL and IELTS, as well as college entrance exams like the Gaokao. New Oriental also offers vocational training and study abroad services.
In recent years, New Oriental has expanded its online education offerings, launching a mobile app called Koolearn in 2015. The company also has partnerships with online education platforms like Coursera and MOOC.cn. In 2020, New Oriental’s online course enrollment grew by more than 70% year over year.
TAL Education Group, founded in 2003 by Zhang Bangxin, is another major player in China’s private education industry. The company offers K-12 after-school tutoring services, primarily in the subjects of math, English, and physics. As of May 2021, TAL Education had a market capitalization of over $15 billion.
TAL’s biggest revenue generator is its Xueersi brand, which offers one-on-one tutoring and group classes through physical learning centers and online platforms. The company also has a stake in online education platform Yuanfudao and has partnerships with popular Chinese tech companies like Tencent and JD.com.
In addition to its core tutoring services, TAL offers test preparation courses for exams like the Gaokao and the SAT, as well as language training courses and vocational training programs. The company’s online education offerings saw significant growth in 2020, with a 140% increase in revenue year over year.
Both New Oriental and TAL Education have faced criticism and regulatory challenges in recent years. In 2018, China’s Ministry of Education issued new regulations aimed at curbing excessive tutoring and reducing the academic burden on students. As a result, both companies have had to adjust their business models and prices.
In 2019, TAL Education was also embroiled in a controversy over alleged fraud. The company was accused of inflating its profits and artificially inflating its student enrollment numbers, leading to a drop in its stock price.
Despite these challenges, both New Oriental and TAL Education have continued to thrive. The COVID-19 pandemic has actually led to increased demand for online education services, and both companies have seen strong growth in their online offerings.
Looking ahead, the private education industry in China is expected to face continued regulatory scrutiny, as well as increasing competition from new players. However, companies like New Oriental and TAL Education are well-positioned to weather these challenges and continue to play a leading role in China’s education landscape.
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