Date
11 December 2017
China’s new two-child policy is likely to increase the number of potential users of IT education products. Photo: Reuters
China’s new two-child policy is likely to increase the number of potential users of IT education products. Photo: Reuters

NetDragon a possible winner as China shifts to two-child policy

Chinese gaming firm NetDragon’s recent completion of a deal to acquire Britain’s loss-making Promethean World is a clear vote of confidence in the future of education technology, considering that it has been losing money in this business.

In the first half of 2015 alone, NetDragon’s own IT education business lost 57 million yuan (US$9 million), but that won’t stop the firm from making more investments to target the education and training market.

“We have no stop-loss target,” a senior executive told the Hong Kong Economic Journal.

While the company has no specific target for the education business to break even, it expects its investments in the China market will soon pay off.

Removal of the one-child policy will also help broaden the market potential. The current number of target users of its products—from kindergarten kids to middle school students—is estimated to be about 200 million people.

In Hong Kong, education technology is so far not quite popular; private schools are the main clients for the time being.

NetDragon also plans to crack the Vietnam and India markets, banking on the typical parents’ willingness to spend on their children’s education.

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CG

EJ Insight writer

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