09 Aug 2021
Posted in Thematic Research
China’s regulatory crackdown will send edtech investors India’s way, says GlobalData
Following the news that China’s VIPKid is to stop selling foreign-based tutoring to students in China;
David Bicknell, Principal Analyst in the Thematic Team at GlobalData, a leading data and analytics company, offers his view:
“The Chinese Government’s strict regulation of its fast-growing edtech sector has changed the market and will have lasting consequences for the country’s leading vendors. Tencent-backed VIPkid’s big thing was using US and Canada-based tutors to teach English to Chinese students. It will now have to rethink and restate its business model, as will other key Chinese edtech players such as Zuoyebang and Yuanfudao.
“The Chinese edtech market is in a spin, and that’s good news for Indian edtech companies. India will become a safe haven for edtech investment, at least until the Chinese picture clears.
“The Chinese Government has taken a similar line with edtech as it did fintech. Light-touch banking regulations enabled Alibaba and Tencent to grow vast and ubiquitous online financial services businesses. However, as discussed in the Thematic Team’s China Tech report, the state worried that these firms had become too powerful and too independent. For fintech then, read edtech now.”