The “Outsiders” in China’s K-12 Space

The “outsiders” – organizations who are not the traditional education providers, have cemented their position after 20+ years of entering the industry. Biguiyuan, a well-known Guangdong real estate developer, established their first school in 1994; today, they own 15 schools with 30,000 students. Lecheng, a Beijing real estate developer, established BCIS in 2005, is one of the top international school providers today with 8 batches of graduates. The No.1 real estate player Wanke also has two spin-off education brands – Maisha and Deyingle in South and East China, delivering IGCSE, AP and VCE programs.

In addition to real estate companies, internet players are also actively entering the industry. The players include TenCent, Jingdong and Ali, established Shenzhen Mingde (TenCent), Yungu (Ali) and Nanjing Foreign Language Xianlin Sub-campus (Jingdong). The formula varies from obtaining management rights of public schools to joint shareholding. Ali invested RMB1.2b (USD170m) into Yungu School, with a capacity of 3,000 students. There are mixed comments towards these schools: despite their strong financial backing, these “outsiders” are facing significant challenges in management employment and aligning with the directions set by investors. Other real estate developers who have also entered the education field include Poly Group, Hengda, Wanda, Zhengrong, Zhongrui, NewOpen, etc. Many see education as a stable business to compensate for their high-risk core businesses, especially when their core business has already provided a pool of students for its K-12 schools.

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