China’s Ministry of Education (MoE) stated that it will partner with other departments to further regulate the online education market, in an interview with the Central Commission for Discipline Inspection and the National Supervisory Commission (CCDI), according to the latter authority’s official website on January 18. This is due to the large number of advertisements online education institutions are posting close to the start of students’ winter vacation, pressuring students to take online courses, thereby inducing anxiety and increasing the financial burden for both parents and students.
Such advertisements appear in sponsorships in TV programs, metro and bus station ads, and social media marketing, making it difficult for parents and students to avoid such messaging. Moreover, marketing costs for these institutions are also rising. Citing CCDI, for the first nine months of 2020, the marketing and sales fees of three main online education players, Yuanfudao, Zuoyebang, and TAL Education’s [TAL:US] Xueersi, reached RMB5.5bn, more than double that of the same period in 2019. According to Sina, in 2Q20, NetEase Youdao’s [DAO:US] selling expenses per capita exceeded RMB1,500 while that of GSX Techedu’s [GSX:US] rose to nearly RMB2,000. For reference, in 2020, the highest figure was around RMB1,000.
In addition to marketing, CCDI also pointed out other issues arising from the expansion of online education, such as excessive prepayments, high charges without timely refunds, and misleading tutoring ads. Previously, MoE established a basic management system for online tutoring, requiring educational institutions to register with provincial educational bureaus, specifying institutions’ duties regarding charging and refunding, etc. This time, MoE indicated that it will continue strengthening daily monitoring and collaborations with other departments, such as the State Administration for Industry and Commerce and the State Administration for Market Regulation, to crack down on false marketing, absconding with funds, and others.