Matchmaker has love of online education

Jiayuan.com's booth at an international Internet exposition in Beijing. The online dating website went public on the Nasdaq in 2011. Provided to China Daily

Entrepreneur diverts her passion from lonely hearts to langauge skills

It takes some time to identify Gong Haiyanin's work station, from where she runs her second business after the success of Jiayuan.com - one of China's leading online matchmaking platforms.

Instead of having her own personal office as normal company leaders do, she simply puts herself in among the hundreds of her employees.

"I like it that everything just goes back to zero again," said Gong, founder and former chief executive officer of Jiayuan.com International Ltd.

Widely referred to as China's first online matchmaker, Gong became well-known for her first proper entrepreneurial experience, in which she started Jiayuan.com and developed it into a Nasdaq-listed company in 2011, eight years after she set it up.

Born to an impoverished family in a rural village in South China's Hunan province, Gong began to support her family when she was in high school and had her first experience of making money by running a stationery shop. It made her realize it need not be that hard to turn a profit.

After successfully bringing Jiayuan.com to the capital market, Gong stepped down from a management role at the online dating website.

"I think it was time for me to leave because I had made my contribution to the company to the most of my ability. I didn't think I could continue to explore my potential or try something new to fuel my growth as an entrepreneur if I chose to stay there," said Gong.

The day after she left her management job at Jiayuan.com, she embarked on starting her second business - online English education.

She made the decision to enter this relatively new sector out of her own desire for a better and more convenient oral English education experience.

During the roadshow for Jiayuan.com in the United States, Gong found that she could hardly speak a complete sentence in English when talking with potential US investors and had to depend on an interpreter.

"It wasted a lot of time and I also felt embarrassed," said Gong.

Immediately after she returned from the US, she signed up to a brick-and-mortar English teaching agency and paid 50,000 yuan ($8,048) for the course. It turned out not to be very effective for Gong. She found it hard to persist because it took much of her time getting to the class.

This unhappy experience inspired in her a determination to enter the online English education sector. By the end of 2012, 91waijiao.com was set up.

It offers a one-to-one online English learning experience to people who want to learn or improve their English skills, especially their oral English, with teachers mainly from the US.

In addition to US teachers, they also recruit teachers from the Philippines, but the cost of a class with a US teacher is much higher than that with one from the Philippines.

Gong was greatly influenced by a picture of a rural schoolgirl having an online English class with a US teacher in Yunnan province. It prompted her to broaden her online education ventures to cover primary and middle school education.

"The little girl was very thrilled when she saw the US teacher talking to her on the screen," recalled Gong. "I was deeply impressed and began to realize how much the Internet could do to tackle the problem of the uneven distribution of educational resources across China."

Hard on the heels of this came the birth of Tizi.com, also in 2012. This was a platform containing abundant quality primary and middle school educational resources, where teachers could download courseware materials free of charge and arrange tests and students could take tests and practice exercises. In addition, parents could keep updated about their children's achievements.

Recently, Gong has been busy in talks with potential institutional and individual investors, establishing details for a second round of fundraising.

The first round of financing, in which a venture capital fund established by NetEase Inc injected $4 million, is small in comparison with the second round, which is expected to be around $24 million, although Gong declined to provide further details.

The fund will mainly be used to expand the team of employees and to fuel the development of educational materials and online teaching tools, said Gong.

At the moment Gong presides over more than 180 employees, among whom 50 are working for 91waijiao.com. She plans to expand the team to 300 people by the end of this year. The number of paying customers at 91waijiao.com has reached 3,000. Gong wants to increase the figure to more than 10,000 by the end of this year.

One thing Gong insists on with her current business is that she only develops content, not the platform. "If you choose to go for the platform, it requires a gigantic investment in the early phase and involves high risk too," she said.

Gong considers online education a business characterized by high investment, high risk, high return but a very low success rate.

"In the next three to five years, there will be a boom in the industry. Many people will elect to start a business in the sector, but only a couple of them will survive," said Gong.

Unlike brick-and-mortar educational enterprises, two or three businesses are enough in the online education industry, she said.

"I believe my company will be one of the last standing," said Gong, attributing her confidence to the excellence of her team, their strong execution powers and the market-orientation policy that she established earlier than any rivals.

The challenge she is now facing is a race against time, she says. She has found a number of things are easier compared with the old days when she started Jiayuan.com, including raising capital, recruiting employees, corporate management and staff motivation.

"The biggest difference is that this time I was in the spotlight straight from when I started the business. A lot of people want to see how I end up with my second entrepreneurial effort," said Gong.

"I don't feel pressured because I have maintained my entrepreneurial passion and have now fallen in love with the business of online education."

Romance in a virtual world

Jiayuan.com was established in 2003 and went public on the Nasdaq in 2011. The number of its registered users is 100 million so far. Jiayuan.com generated net revenue of 492.6 million yuan ($79.28 million) in 2013, up 19.9 percent year-on-year.

Its net profit rose 8 percent year-on-year to reach 63.7 million yuan, according to its financial report.

Baihe.com was set up in 2005, with registered users of 70 million at present.

Zhenai.com was originally founded in 1998 under the name The Matchmaking Center but was officially named Zhenai.com in 2006. It now has 60 million registered users, statistics from iResearch Consulting Group show.

China's online dating market was worth 2 billion yuan in revenue in 2013, demonstrating a year-on-year increase of 31 percent, according to iResearch Consulting Group, a Beijing-based consulting firm. It forecasts the figure will be close to 3 billion yuan in 2015.