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The Secret to Language Training Business Success: Real-Time Engagement Featured

The Secret to Language Training Business Success: Real-Time Engagement

By Author: Lance Huang In Business

While 2020 was turbulent for many educational institutions as they shifted to remote classes, some language-learning providers overcame the odds and realized record growth by embedding real-time engagement components—such as interactive voice, video, and streaming—into their solutions.

I was interested in understanding how these providers innovated business models and adapted to the changing environment. Here are three trends I have identified that are reshaping the language learning space.

  • Business model transformation #1: Some providers offered asynchronous learning content and tools for free, attracting a large user base. However, that didn’t have a direct financial impact. To monetize their products, these players embed real-time engagement into their ecosystem and charge users for a premium live interactive experience.
  • Business model transformation #2: Other providers already offering in-person classes may have a hefty price tag that barred some students from quality content, which capped their total addressable market. Many players have successfully leveraged real-time engagement to drive down the cost of learning and make knowledge more accessible and affordable.
  • Business model transformation #3: Brick and mortar learning centers were common places where face-to-face learning happened prior to COVID-19. Negatively impacted by COVID-19 and lockdowns, they explored ways to replicate the on-site learning experience in a virtual environment.

Following online traces and internet footprints, I have identified five global players pioneering real-time engagement and evolving with innovative product offerings.

Monetizing A Large Free User Base

Duolingo

Building the large user base: As one of the most popular language-learning apps with 500 million total app downloads, Duolingo has seen a surge of usage and attention: new users on Duolingo increased by 101% in March 2020 while the Duolingo mobile app monthly active user count grew steadily during the last 6 months. Such rapid growth was not only attributed to the increasing interest in language learning during the lock-down, but also due to the freemium business model Duolingo adopted and the gamified experience the main app provides.

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The necessary transformation: Although the total number of users on Duolingo’s platform was rapidly increasing, the paying customer conversion rate remained low: 80% of Duolingo’s revenue came from 4% of its users.

The benefits of real-time engagement: Duolingo found additional revenue streams besides its main app by leveraging real-time engagement to adopt online proctoring. For example, the company launched Duolingo English Test, a computer-adaptive language proficiency test that takes less than 1 hour to finish. Since the tests are remotely monitored by human proctors with the help of AI, students can take the test anywhere, anytime, at the cost of $49. Accepted by over 2,000 institutions, the Duolingo English Test has been increasingly used by colleges to determine international student admissions. Driven by increasing demand from countries like India and the cancelation of many on-the-ground English proficiency tests, the Duolingo English Test has seen a whopping 1,500% growth in the number of test-takers in 2020. This diversified proficiency test offering not only complemented Duolingo’s language learning apps but also became a driver of rapid business growth. Despite the success of the online assessment product, Duolingo has not fully unlocked the commercial value of real-time engagement in their main learning app. I will write a second article that will depict a re-imagined Duolingo ecosystem, supercharged by live interactive elements.

Youdao

The necessary transformation: As a leading EdTech company based in China, Youdao (NYSE: DAO) did not initially have a clear path to monetization. Founded in 2006 as a part of NetEase, Inc. (NASDAQ: NTES), Youdao started off by offering an English-Chinese e-dictionary for free. As the translation software gained traction, Youdao gradually accumulated a large user base. Although Youdao established a strong presence in the market, it struggled with generating revenue since the sole product is a free tool.

Monetization opportunities unlocked by real-time engagement: In 2014, Youdao started offering Youdao Premium Online Courses, which featured live interactive classes for language learners. Youdao adopted the dual-teacher mode to improve teacher-student engagement and enhance overall learning outcomes in a large class setting. In this mode, one experienced teacher delivered content remotely, while another teacher’s assistant (TA) facilitated students in a smaller group by answering questions via real-time messaging or live video chatting.

The benefit of real-time engagement: Youdao’s live classes played a vital role as the main revenue engine that contributed more to the company than its advertisement business. According to the company’s Q3 2020 financial report, the total net revenues of Youdao were RMB896 million ($132 million), a 159% increase from the same period in 2019. Over 60% of its revenue came from the Youdao Premium Online Courses, which has also seen a 308.6% increase.

Democratizing Language Learning

Preply

The business basics: Founded in 2013, Preply is a fast-growing startup that provides an online tutoring marketplace. Its video-based tutoring platform allows language learners to have 1:1 private tutoring sessions with a native speaker based on his/her language, price, nationality, and availability.

The benefit of real-time engagement: Leveraging a global network of tutors, Preply drives down the cost of language learning. The hourly rate of a tutoring session averages about $15 and can be even lower if you are based in the U.S and learning with a foreign language tutor. In addition to being cost-effective, Preply also uses machine learning to increase the efficiency of pairing tutors with learners, so users can schedule on-demand tutoring sessions with native speakers and learn a language at their own pace and schedule.

The business impact: Preply has already delivered over 2 million classes with 15,000 verified tutors of 160 nationalities teaching 50 languages. Like other language providers mentioned previously, Preply also saw a surge in traffic—it has recorded a 40% increase in traffic from January to March 2020. The number of learners and tutors in the U.S. has also doubled year over year.

New Oriental

The business basics: New Oriental is the largest provider of private educational services in China based on the number of program offerings, total student enrollments, and geographic presence. Its online education arm, Koolearn, has also seen a spurred growth from live interactive classes.

The urgent initiative: When Covid-19 first hit China, New Oriental responded actively to the policy initiative called “Suspending Classes Without Stopping Learning.” On Feb 10th, the company started offering synchronous K-12 courses covering both core and supplemental curriculum and broadcasted non-stop from 9 am to 5 pm on each school day, free of charge.

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The benefit of real-time engagement: Apart from creating an accessible remote learning platform for free, this bold initiative also had profound business implications. New Oriental retained existing users and successfully transitioned more than one million students to online classes. While onboarding new students, New Oriental also dramatically increased its market penetration into rural areas in China. Many rural students that experienced the flexibility of live classes for the first time in their lives have been converted into paid customers, even as COVID subsided in China.

The business impact: In FY 2020, total K-12 student enrollment grew from 572,000 in 2019 to 1,856,000, a 224.5% year-over-year increase. The revenue of its K-12 education was RMB 295 million ($43.5M), an increase of 85.4% compared to RMB 159 million ($23.5 million) in the same period in 2019.

Collaborating with the right partner: As the Education Lead at Agora, I was able to witness how New Oriental provided access to remote classrooms amidst coronavirus outbreaks. Teamed up with Agora, the leading voice, video, and live interactive streaming platform, New Oriental, and seamlessly transitioned one million students to a stable, interruption-free online classroom, in just seven days. This solution has performed without failure, even with extremely high-traffic data usage and in highly congested networks.

Blazing A Way into Online Learning

Kaplan

The necessary transformation: Kaplan, a leading brand offering a wide variety of educational services to individuals, corporations, and universities, saw a 15% decline in revenue due to Covid-19. Accounting for nearly half of its total revenue in 2019, Kaplan International was a booming business, offering in-person language immersion programs, through which 40,000 students studied abroad and experienced local culture each year. Due to travel restrictions enacted during the pandemic, this business unit took the heaviest hit, with a 31% decline from $178M in Q3 2019 to $123M in Q3 2020.

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The online shift powered by real-time engagement: Kaplan has explored means to reduce operational overhead and replicate the on-site learning experience. Kaplan International has launched K+ live services that offer live interactive classes for language learners. Kaplan’s Higher Education division, which provides online program management (OPM) solutions to colleges, has also seen steady growth as its customer, Purdue Global, experienced increased enrollments and higher retention rates. Besides commercial benefits, online classes also improve learning efficiency and create an immersive learning environment, allowing students attending K+ online classes to chat with native speakers and collaborate with peers, even while they are physically apart.

Empowering Language Learning with Real-Time Engagement

Language learning providers remained resilient and even realized record growth through well-considered monetization implementations, improved product accessibility, and strategic pivoting. It is not hard to discern that most of their product offerings are based on real-time engagement, ranging from online human proctoring to live interactive classes.

If you are considering enhancing the student experience with live interactive offerings, I firmly believe Agora is your best option in the market. As one of the most advanced developer platforms, Agora provides SDKs and building blocks to enable a wide range of real-time engagement possibilities including video, audio calls, and live interactive streaming. Operating a global network of over 200 data centers, Agora provides high-quality, ultra-low latency, and reliable video/audio experience for language learners around the globe. With our robust infrastructure and a wide variety of classroom management tools, you can focus on creating a customized and engaging online learning environment that works on any device, for any class size. To learn more about our education solutions, please visit our Education page or talk to us through our website.


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