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When you live abroad, there is always a longing for belongingness. Often, we find immigrant communities to be more close knit- gathering for social and cultural events, living in same neighborhoods, etc.

It’s estimated that there are over 60M China origin population (including descendants, source) across the world, making it the largest immigrant population. This has opened up opportunities for Chinese brands to export local snacks, medicine, liquor etc. Most interestingly- this has opened up export of Chinese language (Mandarin)!

Mandarin is the official language of China- spoken by ~1.1B people across the world. That is 16% of the world, not too far from English!

Say NiHao (你好) to Lingoace! 🙋‍♂️

Lingoace (LA), a Singapore based EdTech company- has built the largest live tutoring platform for kids in foreign countries (outside of China) to learn Chinese language- tapping on to the Chinese diaspora. It delivers classes in 1:1 or 1:few (4-6) format.

LA is operating in a market that could be $15B 🌍

• There are over 60M China origin individuals across the world- 10% in North America, 18% in other parts of Asia, 60% in SEA, and 6% in Europe and Australia.

• Chinese parents want their children to be able to speak fluent Chinese so that they are able to interact with their family back home and stay close to the roots.

• China is the second largest economy in the world and poses great opportunities for career- and Chinese language is sort-of-necessary to be successful in China’s job market. There is a natural pull for China origin individuals to move to China and be part of ‘hot’ job market or pursue entrepreneurship.

Landscape is very fragmented! 🧩

There are many traditional and new age avenues for kids as well as adults to learn Chinese:

Confucius Centers

Confucius Institutes are public educational and cultural promotion programs funded and arranged currently by the Chinese government- often in collaboration with host country schools. There are over 550+ Confucius institutes across 160+ countries.

Due to the involvement of government, there have been controversies around it and the model is heavily dependent on local partnerships in the host countries.

Mom and Pop Schools

There are various local institutes which offer Chinese language training in their local neighborhood. Many of them have also started conducting online classes due to the pandemic.

These platforms are usually constrained by supply of teachers and have a higher cost of operating due to the offline infrastructure.

The aunty-uncle tutor!

Given family and friends back in China, parents are able to find references within personal networks to find tutors who could teach online.
Usually, these classes are expensive and aren’t very well structured due to lack of well researched curriculum.

Online Platforms

There are several platforms which have been offering mandarin as one of the languages.

Tutor marketplaces usually don’t have high ownership of the experience and curriculum, which is why there was a gap for a mandarin focused platform with end to end ownership.

I also bought credits to practice my Mandarin with a teacher on iTalki but 80% of my credits have gone unused!

Chinese EdTechs

Due to China government’s double reduction policy (双减政策), after-school tutoring platforms in China have seen business scale down overnight.

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Impact of China’s EdTech Ban on Emerging Economies 🇮🇳🇮🇩🇻🇳

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a year ago · 11 likes · Rahul Maheshwari

Some platforms like Wukong, Zhangmen, etc. have started Mandarin tutoring courses for Chinese diaspora, riding on the LA wave.

Some unique channels for user acquisition! 👨‍👩‍👧

WeChat Marketing

LA has access to a unique channel of advertising- WeChat- equivalent of Facebook and Whatsapp in China, owned by Tencent. Chinese diaspora actively uses WeChat and through performance marketing on WeChat- it is much easier to target Chinese origin individuals abroad. In fact, organic growth efforts in Chinese social media can enable a great funnel for LA!

Facebook, Google

Facebook and Google are the most common channels for EdTech companies across the world.

Referral

Referral is also a common strategy for user acquisition used by EdTech companies, just that it could work even better for platforms like LA since it drives FOMO in the community and leads to adoption from one family to another.

Lingoace provides a wholesome Mandarin learning experience! 🧑‍💻

Pillars of Lingoace:

• Tutor Supply

  LA has built it’s supply side strength in China with native speakers who are well qualified. There is a high bar of recruitment followed by training and quality check to ensure a high quality experience for students.

  

• Programs and Curriculum

  LA has created standard programs with in-house experts which cater to students of all kind:

  • Early learners: Can’t speak the language

  • Advanced learners: Already have grip over the language

  • International Learners: Want to study Chinese as a second language

  

  Moreover, there are special courses built according to the curriculum of Ministry of Education (Singapore)

  

• Platform

  The platform is tech enabled which reduces the operational bandwidth for the team and enables a standard experience for the students. Parents purchase credits for the class, which they can use by scheduling the classes with the teacher through the dashboard. Classes are interactive and fun- supported by high quality visuals. The classes are followed by interactive home assignments for practice.

  

  

Pricing starts from $15 for 1:1 class! 🏷️

• Parents need to spend at least $750 while buying the credits!

  

• Localised pricing with 1:1 and 1:few classes in markets like Indonesia, Singapore etc.

  

• Study now, pay later!

  

Lingoace might be operating on ~20% contribution margin on first purchase! 🧧

• Assuming 55 classes on first purchase (2nd package), this would last a student ~6 months, if he or she is attending the class twice per week

• With teacher supply from China, assuming, a teacher would cost ~$11/- per hour, alongside guarantee of demand, leading to ~60% gross margin

• With renewal of courses after the 6 months period, unit economics per customer can improve significantly since renewal cost would be significantly lower than CAC

• Unit economics would see some improvement in 1:4-1:6 format as well

Growth levers in future 🪴

Beyond Chinese Diaspora

Given that 1/6th of the world speaks Chinese language, it is a great skill to have. This tailwind can enable LA to expand beyond Chinese Diaspora which is evident from some course offerings and their marketing material.

Adults

There is a strong demand for Chinese language learning in adult population across the world, expected to reach ~100M learners. This could be a natural next step for LA to conquer the market.

English Learning

English learning seems to be a strong upsell opportunity for the existing user base of LA and also to go beyond the Chinese diaspora. It has already launched a product play in this direction and also listed english live classes on the website.

Giants like VIPKid, Dada ABC had to shut down their China focused offerings last year after strict regulations of Chinese government. This has led to massive unemployment of native English tutors across the world. It seems to be a good time for LA to tap on the readily available supply as they diversify into English learning.

Learnings from Lingoace! 📕🇨🇳

Niche opportunity might not be niche

Prima facie, live tutoring for Chinese language might look like a niche market, but going global and deep might provide for a large enough market. That being said, it seems like a winner-take-most-market, given the strong brand recognition in an audience of 60-70M people.

Focus on quality and command pricing

LA built superior experience for students, parents and teachers which has enabled them to command premium pricing and dominate the market by building a strong global brand.

Next big opportunity? Indian Diaspora?

After Chinese, Indian diaspora is the second largest- over 30M+ people, with fast growth! There is a strong sense of belongingness in the Indian community, and you can often find them living in common neighborhoods. Indian origin kids are already doing classes to learn local languages with tutors from home, cultural courses in nearby hubs, etc.

In fact, the Indian economy is growing rapidly (produced over 46 unicorn startups in 2021 alone)- which could influence the Indian diaspora to consider moving back to the country. India is already witnessing early signs of reverse immigration.
That being said, unlike China, India has many languages- Hindi is only spoken by ~520M people, followed by Bengali, spoken by ~100M people and so on. This could create some challenges on demand and supply side...but food for thought- Lingoace for Indian Culture?

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