Beijing’s crackdown spells tough times for Tencent-backed Yuanfudao, other off-campus tutoring providers

Widespread speculation about lay-offs in the off-campus tutoring sector has become a trending topic on Chinese social media

Beijing’s scrutiny of the sector comes after President Xi Jinping described the domestic market for K-12 after-school training services as a ‘social problem’

Reading Time:5 minutes

Published: 10:00am, 17 Jul 2021Updated: 10:00am, 17 Jul 2021

Four days before 22-year-old Emma Liu was expected to start her first full-time job as a private tutor for online classes at a Chinese start-up, the company called to notify her that work would be delayed for at least three months.

The call was made by Zebra AI Class, a unit under Tencent Holdings-backed Yuanfudao’s online education platform, which is part of the country’s vast off-campus tutoring market now under increased government scrutiny.

Besides disrupting her plans for the summer, Liu said the notice upended her life.

“I was ready to work and all of a sudden, I needed to look for a new job,” said Liu, a fresh graduate from a university in Xian, capital of northwest China’s Shaanxi province. “I can’t afford to wait [to start work at Zebra AI Class] and live in the city without any income.”

Liu’s predicament comes amid a regulatory crackdown on China’s once freewheeling off-campus tutoring market, casting a pall over the prospects for about 600,000 online institutions and tens of millions of people employed in the sector.

Tencent Holdings-backed Yuanfudao, the world’s most valuable education technology unicorn, operates a closed-loop online education platform. Photo: Handout

The stakes are high for China’s pre-college, off-campus education market. It is forecast to reach 730 billion yuan (US$112.6 billion) this year, up from 400 billion yuan in 2020, according to estimates by the National Institute for Education Sciences, consultancy Oliver Wyman and TAL Education Group.

Beijing’s crackdown spells tough times for Tencent-backed Yuanfudao, other off-campus tutoring providers

Widespread speculation about lay-offs in the off-campus tutoring sector has become a trending topic on Chinese social media Beijing’s scrutiny of the sector comes after President Xi Jinping described the domestic market for K-12 after-school training services as a ‘social problem’

Widespread speculation about lay-offs in the off-campus tutoring sector has become a trending topic on Chinese social media

Beijing’s scrutiny of the sector comes after President Xi Jinping described the domestic market for K-12 after-school training services as a ‘social problem’