EdTech in Asia: 10 tips for building L&D partnerships in China

Figures from the market research firm Metaari reveal that, in 2017, investments made in educational technology (EdTech) companies reached over $9.5 billion. The previous record, set in 2016, was $7.3 billion. So, where is all of this smart money going?

Next-generation learning

According to Metaari's Sam Adkins, "The most significant change in the EdTech industry in 2017 was a sharp spike in investments made to next-generation learning companies, particularly those that offer products based on artificial intelligence (AI), and mixed reality (augmented reality and virtual reality)." There have also been some notable geographical changes. Fewer deals were made with companies in India, for example. Investment fell in Latin America, but it remained robust in the U.K., Israel and Canada. And EdTech startups in Africa are now attracting funding, particularly in South Africa, Kenya and Nigeria.

EdTech in China

But one trend that hasn't changed is the vast amount of money going into learning technology in China. "Over $1.77 billion was invested in 67 EdTech companies in China in 2017" says Adkins. The numbers coming from China are certainly impressive. Estimates suggest that 300 million people in China are learning English, of whom 50 million are in schools studying English has been compulsory in Chinese schools since 2001. And China's emphasis on education currently supports an adult student population of some 260 million, served by 15 million teachers. What's more, the country has championed the Massive Open Online Courses (MOOCs) delivery method for L&D activities in part because China is a vast country where centres of teaching excellence tend to be highly localized.

A huge opportunity

But Graeme Coomber, CEO of the Singapore-based global L&D specialist, EdTrIn, has a word of warning for those who are tempted to enter this huge market. "The only effective way to break into China is through partnership with a local firm with market knowledge" he says. "Not only are there cultural issues involved, but the Chinese government won't allow any international firm to gain control over such a vital aspect of its population's development. But, if market entrants are aware of the 'rules' China offers a huge opportunity for L&D firms."

10 tips for L&D partnerships in China

The British HR and L&D specialist, Hewlett Rand, already has experience of operating in China in partnership with a local firm. According to Richard Lowe, its Director of Training and Digital Learning Solutions, would-be L&D exporters to China should:

• Prepare and plan. It can take years to nurture opportunities in China.
• Research. Know your market focus. Understand the wider political, cultural and economic environment, as well as trends in your area of expertise.
• Learn from experienced exporters and governmental advisors. Ultimately, though, trust your judgment and experience, and research your market thoroughly.
• Contact local trade associations. They will know your buyers and competitors. They can also signpost useful contacts and give you access to local networking events.
• Allocate time, resources and budget. Be clear about how much time, resources and investment you're going to set aside for your exports.
• Talk to friends, family, and contacts. You may be surprised by how many people already have connections in your market.
• Develop cultural skills. Spend time with local people. Aim to understand the cultural norms, so that you can build rapport in meetings and social situations.
• Demonstrate integrity and credibility. Demonstrate your know-how by holding seminars, writing articles, and publishing case studies.
• Build a network of trusted partners. Use due diligence to ensure that your brand is well represented. Once you've grown a trusted contact base, ask for recommendations and introductions. Be sure to put proper contracts and confidentiality arrangements in place.
• Harness technology. Out of sight shouldn't mean out of mind. Send partners and clients regular updates, newsletters and articles. Book regular phone calls and online meetings - and circulate minutes of these conversations, to avoid ambiguity or misinterpretation.

Mutual benefit

It's worth remembering that the U.S. still accounts for most of the world's EdTech investment. It attracted over 58 percent of all EdTech funding in 2017- more than three times the investment that went to China. But, Coomber believes, "It's only a matter of time before China overtakes the U.S. as the world's largest single L&D market. The Chinese can outpace the West if they wish. They have the money, the brainpower and the will". However, China will have just as much difficulty breaking into our markets as we have in breaking into theirs, and for the same reasons: knowledge of the local market, and cultural issues. This should lead to a rise in partnership opportunities that will benefit both parties. 

If you missed last week's blog on EdTech in Singapore and southeast Asia, you can find it here.