'Enrichment' classes a lucrative business in Asia-Pacific

Spending on education is a significant part of total household expenditure for many families in Asia-Pacific. Two thirds of parents spend on extra tuition for children, according to MasterCard’s latest survey, Consumer Purchasing Priorities—Education.

The report is based on interviews conducted between 7 November 2012 and 2 February 2013 with 7,678 respondents from 16 Asia-Pacific markets: Thailand, Bangladesh, China, Japan, Korea, Australia, Malaysia, Myanmar, New Zealand, Taiwan, Vietnam, Hong Kong, Indonesia, Singapore, India and the Philippines.

The findings show that more than two thirds of Asia-Pacific consumers save regularly for their children’s education, which on average takes up 14 per cent of their monthly household income. The highest market is Myanmar at 18 per cent; the lowest is New Zealand with 8 per cent.

More than two thirds of households also pay for enrichment classes, on top of regular school fees, according to the report.

“Most parents want their children to have enriched educational opportunities and this has contributed to the growth within the educational sector throughout Asia,” Katsuyuki Harada, PR director of Kumon Asia & Oceania, told Campaign Asia-Pacific.

Kumon, an Osaka-based education brand, has 360,000 subject enrollments in Asia and Oceania, including Australia, New Zealand, India, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Sri Lanka, Thailand and Vietnam, according to the company.

“An area where we have experienced consistent growth over the past years is within the preschool education market,” Harada said. “Throughout the Asia-Pacific region, many parents are now taking a proactive approach to education and choosing to enrol their children early to experience the benefits of developing strong academic foundations at a young age.”

All together, global education brands such as Kumon, Daekyo and Mathnasium have about six million members in Asia-Pacific, excluding China, Terry Son, managing director of global business division at Daekyo, told Campaign Asia-Pacific.

“South Korea, Taiwan, Hong Kong, Singapore and Malaysia were the main leaders in the industry till now, but we expect Vietnam, Thailand, Indonesia and India to show significant growth in the near future,” Son said.

The MasterCard report shows that more than half of parents in India (54 per cent), Taiwan (52 per cent) and Thailand (52 per cent) are spending on extra tuition classes for their children, followed by Malaysia (46 per cent), Singapore (45 per cent) and Bangladesh (45 per cent).

“Education is a vital part of the family budget,” said Georgette Tan, group head of communications, APMEA at MasterCard. “A large proportion of households are saving specifically to support their family’s educational needs.”

The report also indicates that the majority of children in China (53 per cent) and South Korea (50 per cent) are enrolled in learning a foreign language, while markets such as Australia, New Zealand and the Philippines place more emphasis on sports. More than 50 per cent of respondents from Hong Kong preferred that their children learn a musical instrument.

“The after-school programme business started off mainly with math classes in South Korea and Japan,” said Son. “However, other programmes such as English and native languages were added on and is currently showing an average growth of 5 to 10 per cent each year.”

Many Asia-Pacific consumers said they intend to take up an educational course in the next year, with the highest number in China (53 per cent), followed by South Korea (50), Malaysia (44), Thailand (43), Hong Kong (41), and Singapore (38). The lowest percentages are found in India (8), Indonesia (12), Japan (14) and Vietnam (16).

“This does reflect the growing pressure that is put on children to perform academically across the region,” said Tan. “Above all, however, there appears to be little to differentiate how people view education as a critical part of their household spending, in both emerging and developed markets.”   

Marketing efforts tend to be local in nature, with even the larger players abstaining from large campaigns. 

Kumon lets its franchises tailor marketing for the local markets. "While all regions and countries share fundamental practices in communicating the values of Kumon, certain marketing strategies will differ due to local values and educational beliefs in each country,” Harada said.

However, he said one of the most effective ways of increasing its profile that Kumon has experienced is through word of mouth in local communities, as students demonstrate their achievements through their continuous learning.

Daekyo's Eye Level, which recently rebranded from its previous name, E.nopi, has positioned itself as a high-end product and is quickly expanding its market by launching its products in various countries and by developing its programmes in local languages such as Indonesian, according to the company.

“Asian parents tend to feel strongly responsible for educating their children,” Son said. “Moreover, Asia is emerging as a big market, especially Vietnam, India and China, due to its economic growth. Such factors will allow the education industry to quickly grow and become one of the most valuable sectors in the near future.”