iFlytek, Baidu, and BBK Are Capitalizing on Parental Fears of Educational Lag to Drive Sales
Lulu, an eleven-year-old once excelling in her studies at a prestigious school in Xiangyang, began to see her grades decline last year. In China, where education serves as the primary avenue for upward mobility, the competition for limited spots at top universities is fierce. Faced with this pressure and a government crackdown on after-school tutoring, Lulu’s mother, Yang Hongyi, sought an alternative solution to bolster her daughter’s academic performance: she invested in an AI-powered educational tablet from iFlytek, priced at 8,999 yuan ($1,255). “No parent wants their child to lag behind, especially at such a young age,” Yang remarked to Rest of World.
Tech giants like iFlytek and Baidu are spearheading a burgeoning industry centered on AI-driven educational tablets. For instance, the iFlytek T20 Pro, the model selected by Yang for her daughter, resembles an iPad but operates on a customized version of Android. Notably, the device’s software is restricted, preventing children from accessing games or other forms of entertainment. Instead, it offers a suite of applications leveraging Xinghuo, iFlytek’s extensive language model AI. These include an English chatbot for interactive learning, a gamified quiz tool for performance analysis, and OCR (optical character recognition) software capable of grading handwritten essays automatically.
This surge in AI-enhanced tablets is propelling the educational device market in China, forecasted to reach $20 billion by 2026, as projected by research firm Frost & Sullivan. While personal educational gadgets like portable dictionaries have existed for years, the integration of AI is revitalizing the sector, attracting major tech players like Baidu, which has introduced its own line of tablets featuring its AI chatbot, Ernie. Even internet sensation Austin Li has ventured into promoting educational tablets to parents on Douyin, a popular short-video app.
A significant driver behind the demand for educational tablets is the government’s crackdown on tutoring services. With China’s after-school educational system representing a massive industry, serving 137 million students in 2016, government measures to ease academic pressure included reviewing and revoking licenses of numerous offline and online education firms. However, despite these actions, demand for tutoring remains high, with many above-average students still relying on additional coaching. This surge in demand has led to rising tutoring fees, prompting some parents to seek alternative educational solutions like AI tablets.
A study conducted by consultancy firm iResearch revealed that 56.3% of surveyed parents anticipate allocating 10%-30% of their education budget to smart learning devices in the future, with 15.7% willing to allocate over 40%. This shift reflects changing spending patterns, with parents reallocating funds from tutoring to smart learning devices. iFlytek’s financial performance underscores this trend, with educational devices and services accounting for 29.14% of its revenue in the second quarter of 2023, boasting a gross profit margin of 48.64%, making education its most significant and lucrative business segment among its listed services.
Terry Hong, a parent residing in the coastal province of Shandong, shared her experience with educational tablets, revealing she purchased two different models for her children. “I opted for an iFlytek AI tablet for my eldest, who excels academically, as iFlytek is renowned for test preparation. For my younger son, I chose a BBK AI tablet, better suited for younger children who require additional support,” she explained to Rest of World. Similarly, Melody Liu, a Chinese parent living in Japan, acquired an iFlytek tablet during a visit to China, aiming to immerse her two children, aged 7 and 5, in Chinese K-12 education. “Chinese students often tackle more advanced material compared to their global counterparts at the same grade level. Keeping up with this pace ensures smoother schooling in Japan,” Liu remarked.
Cities like Xiangyang are witnessing a surge in dedicated shops offering educational tablets, indicating a significant market boom. IFlytek, for instance, reported opening 768 stores in 2022, marking a 100% increase from the previous year, with plans for further expansion in 2023. However, an investigation by Rest of World revealed that most of these stores, totaling 1,103, are situated in smaller, less-developed cities. In such regions lacking educational resources, parents are compelled to seek alternative solutions for supplementary education.
AI tablets have addressed a crucial need in China’s education sector, particularly catering to parents in less-developed areas who may feel ill-equipped to support their children academically and lack proficiency in technology. Rui Ma, a China tech analyst, emphasized the effectiveness of marketing solutions that tap into parental insecurities. However, education professionals caution that while AI tablets offer convenience, their impact on academic performance may be limited. Kelly Zhang, a former tutor, highlighted that the content provided by these tablets often lacks novelty compared to online resources.
Edward Wang, a veteran tutor, echoed Zhang’s sentiment, stressing that many teenagers lack the discipline required to fully utilize AI tablets for learning. Despite some benefits reported by parents like Hong, who noted her children’s progress with the tablet, issues such as inconsistent performance of features like essay scanning and errors in content remain prevalent. Wang emphasized that while iFlytek’s success in institutional sales is bolstered by partnerships with local governments, such initiatives can create pressure on parents to purchase these devices.
certain schools bypass regulations by imposing a “subscription fee” on parents for tablet use
Some parents interviewed by Rest of World revealed feeling coerced by schools to buy educational tablets, despite a government ban on compulsory device sales. An anonymous iFlytek sales agent disclosed that certain schools bypass regulations by imposing a “subscription fee” on parents for tablet use, effectively mandating purchases. Despite such practices, iFlytek denies involvement in coercive partnerships with public schools. For parents like Hong, the tablets have become integral to their children’s study routines, contributing to academic advancement beyond the standard curriculum.
Comments are closed