China's population of children under to six is said to have exceeded 100 million in 2016

Liu Ying can hardly remember the last time she had a free weekend. As the person in charge of business development at MAMALOOK, a Beijing-based company providing English language training to kids, the 29-year-old saw her workload increase drastically over the past few months together with the rapid expansion of her business.

"My schedule is so tight. Our English-training solution is in high demand and investors are beating down my door to become franchisees," Liu told ChinAfrica. Since its first language training outlet opened in May 2014, MAMALOOK, which serves children aged two to 12, has expanded its franchise network to 51 locations across China, with another 20 under negotiation.

This mirrors the Chinese private sector's growing interests in education services over the past few years. As the middle class expands and parents, especially those of the post-1980s generation, attach more and more importance to their kids' preschool education, the demand for early education services is growing and becoming more diversified. As a result, private investments started flowing into the early education sector.

The market value of early education businesses for kids aged zero to six, for example, is expected to reach 300 billion yuan ($43.5 billion) in 2020, according to reports by Forward Business Information Co. Ltd., an investment consultancy firm based in Shenzhen in south China's Guangdong Province.

Driven by demand

According to the National Bureau of Statistics of China, a total of 17.86 million infants were born in China in 2016. The annual figure stood at around 16 million from 2010-13 and slightly increased in 2014 and 2015 with the end of China's one-child family planning policy. The country's population of children aged zero to six in 2016 was estimated to have exceeded 100 million.

"It is such a large population, and this is what makes investors bullish on business prospects for preschool education," Liu said, noting that the bulk of this lucrative market will be tapped in the next five to 10 years.

Most Chinese born in the 1980s are the only child in their families. "Being brought up in a well-off environment, they, now becoming parents, value early education and are willing to purchase products and services for their kids, starting from a very young age," Liu said.

Lu Yao, 30, perfectly fits this trend. The young mother purchased a membership to an early education club in Beijing for her one-year-old son, in addition to subscribing to related books and video products. Despite being busy with her work, she manages to take her son to gym and music classes twice a week.

"The books and videos help me better interact with my kid and develop his intelligence. The enrichment activities and programs in the early education club are enjoyable and rewarding," Lu told ChinAfrica.

Fitness classes for kids make up a major part of the growing early education industry in China

At an annual cost of 1,400 yuan ($203), the books and videos are delivered to her home on a monthly basis. Her package of 72 gym and music classes costs about 16,000 yuan ($2,320).

As the needs and interests of each child vary, so too do the early education programs. Instead of gym and music, Beijing resident Zhang Juan chose painting and dancing classes for her four-year-old girl. "I spent at least 10,000 yuan ($1,450) on my girl's extracurricular activities last year," she said.

A hot venture

China's revised Law on the Promotion of Privately-Run Schools, to be implemented in September this year, will lay a stronger legal foundation for further development of the private education sector. It will allow educational companies to choose whether they will operate as non-profit entities or as commercial businesses. The prohibition on listing of commercial education businesses will also be lifted.

According to the revised law, private schools offering nine-year compulsory education must be non-profit and under strict supervision. "Other parts of the educational system like preschool, high school and higher education will face no risk of policy uncertainty. We are expecting a healthier ecosystem in the education industry, with more and more investments coming into this sector," noted Gao Shuai, a lawyer at Beijing Dacheng Law Firm.

This improved legal environment is already producing results. Besides startups opening franchise outlets of preschool education services, non-education companies listed on the A-share market are now entering the sector by acquiring established early education businesses.

Vtron Group Co. Ltd., a video wall solutions provider, acquired Hoing Education and its 1,192 kindergartens in early 2015 for 520 million yuan ($75.3 million). Since then, providing operating solutions to kindergartens has been a flagship activity of Vtron.

Vtron's venture in the sector paid off handsomely. According to the company's 2016 annual report, its total revenue amounted to 1.05 billion yuan ($152 million), a year-on-year increase of 12.11 percent. A total of 37.5 percent of the revenue came from its newly purchased preschool education business.

In contrast to Vtron's focus on physical kindergarten facilities, Hodgen, a manufacturer of intelligent household appliances based in east China Jiangsu Province, is taking a strong stance in the sector by offering online education services.

"Against the backdrop of the new economic normal and the impact of the ceiling effect on manufacturing companies' growth, more and more of them are seeking new growth momentums. Education sector, with its great prospects and favorable policy environment, is a good choice under the current circumstances," noted Liu.

More efforts ahead

As it is the case with other emerging sectors, the early education industry will have to deal with many issues, not the least of which is quality control, according to insiders. As of now, companies providing preschool education services have no mature teaching system or assessment standard.

"Many early education clubs or centers have no fixed and consistent curriculum or stable teaching facilities to guarantee the quality of their services," noted Yuan Ailing, an expert with School of Education of South China Normal University in Guangdong Province. "There should be better market access standards and more strict supervision on such businesses," she said.

Experts believe the market should play its due role in this regard, as the sector remains profit-driven. "Meanwhile, the government can set requirements for businesses entering this sector and guarantee that consumers have legal channels to safeguard their rights in cases of fraud or disputes," said Xiong Bingqi, Deputy Director of the 21st Century Education Research Institute, a public education think tank.