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Online Education Market in Russia and the World

December 2016

Analytical Report (full version)

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Analytical Report (full version)

Online Education Market in Russia and the World
Online Education Market in Russia and the World
December 2016

Online Education Market in Russia and the World

December 2016

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J'son & Partners Consulting present brief results of their research focused on the market of online education and aiming on determining the optimal business models with consideration of Russian and international experience.

 

The study objective was to determine the current trends in the online education market development, assess the existing experience of creating educational courses and to identify the leading platforms and business models.

 

 

The global market

 

E-learning is one of the fastest growing segments of the global education market (+23% per year during 2012-2017), but it still holds a small proportion (<3%) of the overall market of educational services.

 

The market growth is supported by the digitalization of language learning, test preparation, as well as the increasing demand for online tutors and development of the corporate market for e-learning. There is a growing need for models of life-long learning, which allow to provide constant follow up-training for staff in accordance with rapidly changing tasks.

 

$5.5 billion investments in educational startups around the world in 2015-16 have accelerated the development of projects in all the market verticals from foreign languages to specialized platforms for corporations and universities.

 

 

USA hold about 50% of the total market, while Asia is growing three times faster both in the volume of consumed services and in the number of new projects. 34% of all investments in EdTech in 2015 were made in China. A number of large and important projects appear in China in different verticals, for example:

  • XuetangX – Chinese leading MOOC platform, 5 million listeners in October 2016 and 400 courses (~7% of the market). The project has extremely rapid growth in the domestic market and the recognition from local Universities.
  • Genshixue (the title is translated as "With whom to learn?") - >70 thousand teachers, $50M of venture funding in 2015
  • 17zuoye (the title is translated as "Learning together") – test preparation for schoolchildren in English and mathematics, >7 million students, $135M of funding amongst the others from DST (Yuri Milner).

 

Mass courses become more focused on practice, job search and the needs of employers:

  • All platforms in 2016 focus on selling integrated education: specialization (Coursera), Nanodegrees (Udacity), Xseries (EdX)

 

Platforms partner with corporations to train their employees:

  • Coursera for Business has already started cooperating with BCG, L’Oreal, Axis Bank
  • iVersity Professional Development, a European MOOC platform second after Coursera sells certificates and offer companies training programs for their employees
  • Udacity for Business offer the same courses and nanodegrees, intended for corporate HR

 

Corporations make their own courses to search for new employees:

  • Microsoft and Google are leaders in creating courses (78 and 50 courses respectively).
  • Other IT-companies are picking up this trend (Facebook, Cisco, AT&T etc.)

 

There is a growing demand for project-based learning to make a website, write a book, create a script, solder a chip:

  • Coursera enters into partnerships with Google, Instagram and Shazam in capstone projects

 

Language learning, baby learning, practical professions (business and IT) are the most popular areas of study:

  • Example: ABCmouse, a training game platform for 2-7 year olds, attracted record $150 mln in May 2016
  • BabyStep, a Russian platform with children’s content, the world’s largest library for parents.

 

Technology trends:

  • Mobile learning and cross platforms become a base requirement to any training platform
  • Wearable devices will play a greater role in training
  • Big Data is needed to improve learning technologies

 

Thematic trends:

  • Courses with famous people (actors, athletes, directors)
  • Coach and tutor selection
  • Mobile tutors in certain areas
  • Courses for creative professions
  • Companies teach their employees services, which are indirectly related to the product and thus increase their product awareness
  • Specialization, the whole site is dedicated to one topic

 

Methodological trends:

  • The convergence of recruitment and training
  • Serious Games (gamification in B2B segment)
  • Training in a game (NOT a traditional gamification!)

Learning through observation and copying

 

 

The Russian market

  1. Russia lags significantly behind developed countries in the proportion of expenditure on education in GDP – both public and private (2.4% of GDP).
  2. A distinctive feature of the Russian market is the initial orientation to paid models.

 

The United States have evolved in parallel free mass University courses and paid specialized training courses. There are more than 50 active sites for all the subjects.

  1. The leaders in the segment of pay applied courses are Netologia Groups, ELC, Eduson, Teachbase. One of the most successful new platforms created in 2015 is Courson, the Russian equivalent of Udemy.
  2. The leaders in the segment of mass free courses are Universarium and Lectorium. Universarium goes to the Coursera model: sells additional services in the form of certification, additional materials and plans to monetize through the development of partnerships with corporations.
  3. The leaders in school education are Interneturok and YaClass. Also, Foxford, part of Netologia Group is one of the leaders in this market.
  4. The leader in language learning is LinguaLeo with 13 million users
  5. The leader in children's learning is BabyStep, which attracted $3 million in 2015 and rapidly growing on the Chinese market.
  6. The leader in programming is GeekBrains, >1 million users, bought in 2016 by Mail.ru Group.
  1. If to talk about courses in Russian, there are courses on international platforms – Coursera collaborates with Russian Universities, Russian instructors use Udemy. Thus, the Russian platforms expect an increased competition from the global leaders.


 

The practice of creating courses

  •  Only high quality content is demanded, by other words the content produced in a studio with a camera crew, director and educator. Amateur recordings of lectures and webinars are not interesting for users.
  • The course price can vary from 500 to 5000 rubles, and the program price in average can be from 5000 to 30 000 rubles.
  • The course duration is 1-3 hours, while the material should be divided into short (5-10 min) videos and supplemented with tests and assignments.
  • Sale of individual courses is also possible, as well as entire programs, subscriptions, additional services for support and mentoring, along with earnings on advertising and recommendations of related goods for specialized courses (children's or sports goods).
  • There are some interesting courses that can help with training and giving a chance to get a job in a certain company. Certifications, exams and recruitment portfolio are also important.
  • The cost of creating a course very much depends on its duration and content – from 50 thousand rubles to 1 million rubles. In the West these figures are higher – MOOC-courses can cost >$150 thousand.
  • The term of the course creating – from 1 to 6 months.
  • To increase the effectiveness and popularity of the course, it is necessary to do it in partnership with experts from industry leading companies, add social learning (discussions, group tasks, webinars), mentoring and impose temporary restrictions.
  • The opportunity to obtain state sample diplomas and certificates is a useful option for Russian listeners, but it is not much popular or demanded. So the platforms keep on trying to make their own brands and diplomas more recognizable.

 

 

Detailed results of the research presented in the full version of the report:

«Online Education Market in Russia and the World»

 

Contents:

 

Summary

 

Introduction

 

1. Online education market

1.1. Online education market and its growth drivers

1.2. Map of educational projects

1.3. Evolution of approaches to online education

1.4. MOOC market

1.5. Best practices: big platforms and suppliers of high quality content

1.6. Corporate market

1.7. Venture investments in EdTech

1.8. Key trends

 

2. Russian experience

2.1. Drivers

2.2. Barriers

2.3. Forecasts

 

3. Russian market

3.1. Volume of the market

3.2. Map of Russian online education

3.2.1. Corporate education

3.2.2. General education courses

3.2.3. Academic courses

3.2.4. School courses

3.2.5. Programming

3.2.6. Preparation for tests

3.2.7. Children’s platforms

3.2.8. Language platforms

3.3. Introduction of online education in Russian Universities

 

4. Практика создания курсов

4.1. Подходы к созданию контента

4.2. Models of monetization

4.3. Models of interaction between the author and platform

4.4. Price and period of creation of a course

4.5. The most popular directions

4.6. Lifetime of a course/qualification

4.7. How to improve of the course efficiency

4.8. Conditions for certification

 

5. Analysis of the competitive situation in the following areas

5.1. Best free courses

5.2. Programming

5.3. Game development

5.4. Data Science

5.5. Soft Skills / Personal Development

5.6. Project management

5.7. Sales

5.8. Internet entrepreneurship

5.9. Finance and capital markets

5.10. Cognitive technologies and chat bots

 

 

 

This information note is prepared by J’son & Partners Consulting. We strive to provide factual and prognostic data that fully reflect the situation and are available to us before issuing the material.

 

 

J'son & Partners Consulting present brief results of their research focused on the market of online education and aiming on determining the optimal business models with consideration of Russian and international experience.