{"id":8727,"date":"2019-02-23T14:13:03","date_gmt":"2019-02-23T19:13:03","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/vipkid-ubernization-in-edtech\/"},"modified":"2019-02-24T22:36:55","modified_gmt":"2019-02-25T03:36:55","slug":"vipkid-ubernization-in-edtech","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/vipkid-ubernization-in-edtech\/","title":{"rendered":"VIPKid \u2013 \u201cUbernization\u201d in EdTech"},"content":{"rendered":"<p><iframe loading=\"lazy\" title=\"VIPKid 2018 Commercial\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/hDPFSHMWKFA?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p>&nbsp;<\/p>\n<p>With the rise of middle class and growingly anxious parents, China\u2019s K12 online education market reached a size of $4.4 billion in 2017 and CAGR of over 30% since 2012.[1] VIPKid, an EdTech platform founded in 2013 in Beijing, matches K12 students in China with teachers in North America for real-time English tutorials. VIPKid currently connects over 500,000 paying students with over 60,000 teachers.[2]<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Function of the Platform<\/strong><\/p>\n<p>Similar to how Uber matches riders and drivers, VIPKid\u2019s virtual classroom allows a student in China to have a 1:1 live session with a teacher in the United States (see <strong>Chart 1<\/strong>). The curriculum is based on the U.S. Common Core State Standards.[3] Students pay on average $3000 annually to enroll in VIPKid\u2019s curriculum.[4] Teachers get paid at $14-22 hourly rate depending on assessment and reviews.[5]<\/p>\n<figure id=\"attachment_8725\" aria-describedby=\"caption-attachment-8725\" style=\"width: 640px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2019\/02\/maxresdefault.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-8725 size-large\" src=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2019\/02\/maxresdefault-1024x576.jpg\" alt=\"Source: Youtube screenshot, https:\/\/www.youtube.com\/watch?v=93CUJeMBT00\" width=\"640\" height=\"360\" srcset=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2019\/02\/maxresdefault-1024x576.jpg 1024w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2019\/02\/maxresdefault-300x169.jpg 300w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2019\/02\/maxresdefault-768x432.jpg 768w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2019\/02\/maxresdefault-600x338.jpg 600w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2019\/02\/maxresdefault.jpg 1280w\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" \/><\/a><figcaption id=\"caption-attachment-8725\" class=\"wp-caption-text\">Chart 1: VIPKid\u2019s Teacher Portal.\u00a0 Source:\u00a0 Youtube screenshot, <a href=\"https:\/\/www.youtube.com\/watch?v=93CUJeMBT00\">https:\/\/www.youtube.com\/watch?v=93CUJeMBT00<\/a>, accessed February 2019.<\/figcaption><\/figure>\n<p>&nbsp;<\/p>\n<p><strong>Interesting Elements of VIPKid<\/strong><\/p>\n<p><em><u>Untapped market segment<\/u><\/em><\/p>\n<p>VIPKid tapped into a market segment where parents couldn\u2019t afford international school\u2019s tuition yet still want their kids to have customized learning experience taught by native English speakers. Existing offerings such as lectures or 1:1 offline tutoring are either ineffective or expensive. VIPKid came in to address this market segment.<\/p>\n<p><em><u>Product: Immersive learning<\/u><\/em><em><u> experience at affordable rate<\/u><\/em><\/p>\n<p>Prior to taking the course, students will go through an initial test to assess their English level followed by course recommendations. The preview animation videos in each module raise kid\u2019s interest in the class. After each class, kids will be asked to do the review in the form of games.[6] This product offering ensures that kids have an immersive learning experience that\u2019s effective and fun.<\/p>\n<p><em><u>Highly selective faculty <\/u><\/em><\/p>\n<p>Teachers at VIPKid have to go through a series of interviews and background check before officially onboard. Besides, VIPKid requires all teachers to obtain the TESOL (Teaching English to Speakers of Other Languages) certificate.[7] Teachers are constantly evaluated by parents for performance.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Value Creation<\/strong><\/p>\n<p><em><u>For students<\/u><\/em><\/p>\n<p><strong>Personalization: <\/strong>As mentioned above, VIPKid provides kids with customized and immersive learning experience.<\/p>\n<p><strong>Flexibility: <\/strong>Students can schedule a class whenever and wherever convenient.<\/p>\n<p><strong>Access to native speakers: <\/strong>Students at VIPKid have access to native English speakers in North America to learn both pronunciations and cultures.<\/p>\n<p><em><u>For teachers<\/u><\/em><\/p>\n<p><strong>Flexibility: <\/strong>Teachers can work from home and manage their own schedule.<\/p>\n<p><strong>Make money while having fun: <\/strong>Teachers can use their free time to make money and enjoy interactions with students globally.<\/p>\n<p><strong>Skip course planning and grading: <\/strong>Lesson plans are provided by VIPKid. Teachers just need to review the material a few hours before a class.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Value Capture<\/strong><strong>\u00a0<\/strong><\/p>\n<p><em><u>User <\/u><\/em><em><u>acquisition<\/u><\/em><\/p>\n<p>VIPKid\u2019s referral scheme encourages teachers to refer teachers, and parents to refer parents to grow its user base both on the supply side and demand side. VIPKid also spent aggressively on PR to build its premium brand image. For example, Kobe Bryant was invited as VIPKid\u2019s spokesman.[8]<\/p>\n<p><em><u>Technology<\/u><\/em><\/p>\n<p>VIPKid\u2019s platform is fueled by its strong technological capability. Its network system \u201cStarry Cloud\u201d installed five transpacific cables to ensure streaming quality and keeps latency under 200ms.[9]<\/p>\n<p><em><u>Capital<\/u><\/em><\/p>\n<p>Backed by leading investors such as Coatue Management, Sequoia Capital and Tencent, VIPKid received checks that totaled $825 million since 2013.[10] The most recent round in April 2018 valued the company at over $3 billion.[11]<\/p>\n<p>&nbsp;<\/p>\n<p><strong>The Road Ahead<\/strong><\/p>\n<p>In 2017, VIPKid launched Lingo Bus, a product focused on teaching Mandarin to kids globally.[12] We can imagine how similar products could be launched for other language vectors \u2014 for example, teaching French to a Japanese student. VIPKID\u2019s potential might just be at the tip of the iceberg.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Reference:<\/strong><\/p>\n<p>[1] iResearch. \u201c2018 China&#8217;s Online K12 Education Report.\u201d <a href=\"http:\/\/www.iresearchchina.com\/content\/details8_45510.html\">http:\/\/www.iresearchchina.com\/content\/details8_45510.html<\/a>, accessed February 2019.<\/p>\n<p>[2] VIPKid. \u201cAbout Us.\u201d <a href=\"https:\/\/www.vipkid.com.cn\/web\/about\">https:\/\/www.vipkid.com.cn\/web\/about<\/a>, accessed February 2019.<\/p>\n<p>[3] VIPKid Teachers. \u201cAbout VIPKID, FAQ.\u201d <a href=\"https:\/\/www.vipkidteachers.com\/faq\">https:\/\/www.vipkidteachers.com\/faq<\/a>, accessed February 2019.<\/p>\n<p>[4] Kuang, Shi. \u201cPerspective IVIPKID: Leading Online K12 English Tutorial Sector via Brand Positioning and Curriculum Edges.\u201d GF Securities, September 15, 2017. <a href=\"https:\/\/wenku.\/view\/b50424b9b9f67c1cfad6195f312b3169a551ea11.html\">https:\/\/wenku.\/view\/b50424b9b9f67c1cfad6195f312b3169a551ea11.html<\/a>, accessed February 2019.<\/p>\n<p>[5] Ibid.<\/p>\n<p>[6] Ibid.<\/p>\n<p>[7] Ibid.<\/p>\n<p>[8] Business Wire. \u201cKobe Bryant Announces Investment in Chinese Education Company VIPKID.\u201d August 23, 2016. <a href=\"https:\/\/www.businesswire.com\/news\/home\/20160823005760\/en\/Kobe-Bryant-Announces-Investment-Chinese-Education-Company\">https:\/\/www.businesswire.com\/news\/home\/20160823005760\/en\/Kobe-Bryant-Announces-Investment-Chinese-Education-Company<\/a>, accessed February 2019.<\/p>\n<p>[9] \u201cVIPKid\u2019s Technological Capacity.\u201d <em>21st Century Business Review<\/em>, September 30, 2018. <a href=\"https:\/\/baijiahao.\/s?id=1612917196257861129\">https:\/\/baijiahao.\/s?id=1612917196257861129<\/a>, accessed February 2019.<\/p>\n<p>[10] Crunchbase. \u201cFunding Rounds, VIPKid.\u201d <a href=\"https:\/\/www.crunchbase.com\/organization\/vipkid%23section-funding-rounds\">https:\/\/www.crunchbase.com\/organization\/vipkid#section-funding-rounds<\/a>, accessed February 2019.<\/p>\n<p>[11] Lunden, Ingrid. \u201cChina\u2019s VIPKID, which links English tutors with online learners, raises $500M at $3B+ valuation.\u201d TechCrunch, July 2018. <a href=\"https:\/\/techcrunch.com\/2018\/06\/21\/chinas-vipkid-which-links-native-english-speakers-with-online-learners-raises-another-500m-reportedly-at-3b-valuation\/\">https:\/\/techcrunch.com\/2018\/06\/21\/chinas-vipkid-which-links-native-english-speakers-with-online-learners-raises-another-500m-reportedly-at-3b-valuation\/<\/a>, accessed February 2019.<\/p>\n<p>[12] Business Wire. \u201cVIPKID Launches New Chinese Online Learning Platform Lingo Bus.\u201d August 23, 2017. <a href=\"https:\/\/www.businesswire.com\/news\/home\/20170823005630\/en\/VIPKID-Launches-New-Chinese-Online-Learning-Platform\">https:\/\/www.businesswire.com\/news\/home\/20170823005630\/en\/VIPKID-Launches-New-Chinese-Online-Learning-Platform<\/a>, accessed February 2019.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Uber matches drivers and riders. An EdTech startup matches students in China with English teachers in North America via its live streaming platform. <\/p>\n","protected":false},"author":9607,"featured_media":8728,"comment_status":"open","ping_status":"closed","template":"","categories":[639,1885,11,651,1252,59,2395],"class_list":["post-8727","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-china","category-digital-platform","category-edtech","category-education","category-shared-economy","category-streaming","category-vipkid","hck-taxonomy-organization-vipkid","hck-taxonomy-industry-education","hck-taxonomy-country-china"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/dig-it-blog-post-assignment-i-innovative-platforms\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>VIPKid \u2013 \u201cUbernization\u201d in EdTech - Digital Innovation and Transformation<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-digit\/submission\/vipkid-ubernization-in-edtech\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"VIPKid \u2013 \u201cUbernization\u201d in EdTech - Digital Innovation and Transformation\" \/>\n<meta property=\"og:description\" content=\"Uber matches drivers and riders. 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