New Oriental, ATA form joint venture

New Oriental Education & Technology Group and ATA Inc, a Beijing-based provider of advanced testing technologies and testing-related services, have set up a joint venture. It is expected to use New Oriental's online channel to develop a new education and training website. Wu Changqing / For China Daily

Educational services provider New Oriental Education & Technology Group and ATA Inc, a Beijing-based provider of advanced testing technologies and testing-related services, have set up a joint venture to tap growth opportunities in the Chinese online and mobile education market and to train working professionals.

The new venture is expected to use New Oriental's existing Koolearn.com's online education and distribution channel to develop a new online education and training website, as well as mobile apps, catering to the workforce in China with an initial focus on the healthcare, accounting and finance industries.

ATA will invest 13.5 million yuan ($2.17 million), representing a 45 percent stake in the new cooperative venture, and New Oriental will invest 16.5 million yuan for a 55 percent stake.

The new joint venture will have free and unlimited access to New Oriental's learning management system, courseware authoring tools, and both live and archived broadcasting platforms and technical resources. The company will also have access to ATA's student resources, learning tools, software and other technical resources.

The two companies expect to finalize the executive management team for the joint venture in the coming weeks and launch the new online education and training website by the end of this year.

Cheng-Yaw Sun, ATA's chief executive officer, said: "Our goal with this new joint venture is to enable ATA to expand and strengthen its online continuing education business, while providing ATA with direct exposure and increased brand awareness to the consumer market, which has been a goal we have been working toward in recent years."

Online professional training is expected to have a market value of 42.9 billion yuan by 2017 from 12.9 billion yuan in 2010, said the China Online Education Report 2014 released by iResearch, a research organization on China's Internet industry.

Among those who have participated in online education, 38.7 percent use it for professional training, including financial management and Internet technology skills, the highest among other education categories.

Liu Dongmei, an analyst who covers the education sector for iResearch, said online professional education users were the highest spenders among all categories and had strong, clear demands and targets.

The courses, including accounting and foreign languages, are higher in standardization and thus easier to improve the efficiency of the education. Online education is the most compatible method for working professionals to study after work, she said.

IResearch's report said the investment in online education in 2013 mainly focused on preschool, language training and middle school education, accounting for 80 percent.

But despite the large scale of the users in these categories, their consumption habits still take time to nurture, prolonging the time to profit. But professional education is expected to attract a fresh round of investment as the market becomes more mature.