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CeleryMan
Joined: 12 Apr 2007
Location: Seoul
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 Posted: Tue Sep 04, 2007 11:00 pm Post subject: $8B? Are you kidding me!? |
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I have no affiliation with the ESL/EFL industry in Korea and was SHOCKED to read that it's an $8B business in this country (The Korea Herald 9/4/07).
I didn't realize just how much of a a demand as well as a premium Koreans are willing to pay to learn English ... wow!
It looks like the $8B pie is only getting larger as industry outsiders are starting to launch and/or invest in their own english language academies.
For those current teachers with an entrepreneurial spirit, this must excite you? |
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cbclark4
Joined: 20 Aug 2006
Location: Masan
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| Posted: Tue Sep 04, 2007 11:03 pm Post subject: |
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| That comes out to about 800,000 per foriegn teacher. |
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Juregen
Joined: 30 May 2006
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| Posted: Tue Sep 04, 2007 11:22 pm Post subject: |
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I guess you guys majored in Languages and not in Business.
I would like to see a more detailed rapport of the spendings. One big number doesn't say anything. |
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CeleryMan
Joined: 12 Apr 2007
Location: Seoul
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| Posted: Tue Sep 04, 2007 11:30 pm Post subject: |
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Forgive my ignorance as I'm sure this topic has probably been discussed at length before...
For those currently teaching in the private sector, do you see new business models emerging? Given the local knowledge Foreign teachers have I would imagine with a little luck and marketing savvy ya'll could get more of that $8B change?? |
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CeleryMan
Joined: 12 Apr 2007
Location: Seoul
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| Posted: Tue Sep 04, 2007 11:38 pm Post subject: |
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| Juregen wrote: |
I guess you guys majored in Languages and not in Business.
I would like to see a more detailed rapport of the spendings. One big number doesn't say anything. |
No business degree here, you're absolutely right. The $8B reference is applies to the private sector only; where most of the upside appears to be.
What fascinates me is the premium Koreans are willing to be pay for instuctor-led training. Online training seems to be another growing cash-cow.
Juregen, I've included a link for your reference and look forward to your comments
https://www.koreaherald.co.kr/archives/result_contents.asp?id=200709040050&query=hagwon%20capital |
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cbclark4
Joined: 20 Aug 2006
Location: Masan
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| Posted: Wed Sep 05, 2007 12:33 am Post subject: |
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| That's spending at $200 per citizen per year. |
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SPINOZA
Joined: 10 Jun 2005
Location: $eoul
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| Posted: Wed Sep 05, 2007 1:20 am Post subject: |
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| cbclark4 wrote: |
| That's spending at $200 per citizen per year. |
$160.
SK population is nearly 50m. |
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cbclark4
Joined: 20 Aug 2006
Location: Masan
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| Posted: Wed Sep 05, 2007 1:53 am Post subject: |
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| SPINOZA wrote: |
| cbclark4 wrote: |
| That's spending at $200 per citizen per year. |
$160.
SK population is nearly 50m. |
I wasn't counting DokDo  |
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Troll_Bait
Joined: 04 Jan 2006
Location: [T]eaching experience doesn't matter much. -Lee Young-chan (pictured)
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| Posted: Wed Sep 05, 2007 2:11 am Post subject: |
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I think that the money refers to all kind of hogwons (e.g. for studying math, piano, Chinese, etc.), not just the ones that teach English. |
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CeleryMan
Joined: 12 Apr 2007
Location: Seoul
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| Posted: Wed Sep 05, 2007 2:42 am Post subject: |
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| Troll_Bait wrote: |
I think that the money refers to all kind of hogwons (e.g. for studying math, piano, Chinese, etc.), not just the ones that teach English. |
I think you're right but therein lies the beauty of it all. You make killer margins on the English offering and offer bundled services (babysitting, I guess) like the painting, karate, whatever; which is simply more icing on the cake.
My coworker tells me he pays ~200,000 won/mo for his toddler's daycare. The daycare center charges 600,000 per child for english classes/mo. |
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sojourner1
Joined: 17 Apr 2007
Location: Where meggi swim and 2 wheeled tractors go sput put chug alugg pug pug
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| Posted: Wed Sep 05, 2007 2:53 am Post subject: |
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I figure a foreign English teacher in a hagwon usually turns over 140,000,000 to 240,000,000 Won per year depending on how many hours a week, how many kids, and how much parents are charged. I calculate I am producing 195,000,000 Won cash inflow in this one year run. As you can see, there is a big money for the hagwon owners to make, it's not chump change. Too bad, the pay is not higher for the risks and challenges of living in here as well as for the high cost of that college degree. It could easily be 60,000,000 Won per year and still be highly profitable for the hagwon owners.
The 8,000,000,000,000 Won or $8,000,000,000 US seems over stated. |
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Juregen
Joined: 30 May 2006
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| Posted: Wed Sep 05, 2007 5:24 am Post subject: |
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The article clearly states about $8B.
The article is trying to show that the private education industry is being noticed by serious investment companies. These investment companies have a lot of interest in entertainment as well.
As is often heard on this board, we see that they are really thinking more of edutainment then actual education.
The good news is that some kind of specialist said the market is not crowded yet, this indicates that there is still plenty of opportunities to fill demand.
As long as demand is higher then supply, prices will remain high.
It also indicates that everyone will be going into niche markets.
If this article is true, I am betting that wages will go up. Demand in private education increases demand in teachers, the amount of teachers (with minimum capability) is pretty fixed (everyone fighting over the same resource) so wages will go up.
It will also create a trend to "off shoring". This is already pretty obvious in Korea, and it will get worse.
So all in all
Good news for parents (more selection)
Good news for teachers (more demand)
Good news for hagwons (no unused capacity)
For hagwons it will be important to keep the growth of capacity under control. Once capacity is greater then demand, the private education could well collapse under its own weight. |
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Juregen
Joined: 30 May 2006
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| Posted: Wed Sep 05, 2007 5:28 am Post subject: |
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| CeleryMan wrote: |
| Troll_Bait wrote: |
I think that the money refers to all kind of hogwons (e.g. for studying math, piano, Chinese, etc.), not just the ones that teach English. |
I think you're right but therein lies the beauty of it all. You make killer margins on the English offering and offer bundled services (babysitting, I guess) like the painting, karate, whatever; which is simply more icing on the cake.
My coworker tells me he pays ~200,000 won/mo for his toddler's daycare. The daycare center charges 600,000 per child for english classes/mo. |
This is the niche strategies I am talking about.
My personal idea for a hagwon would be one where the students would come for three hours or so and will get additional education in Music Language and Science. Still working on the business plan though, some things don't add up.
The main idea is that this way kids don't have to move around to much, a bit more safe. |
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cubanlord
Joined: 08 Jul 2005
Location: In Japan!
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| Posted: Wed Sep 05, 2007 2:09 pm Post subject: |
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| Juregen wrote: |
I would like to see a more detailed rapport of the spendings. One big number doesn't say anything. |
Then you should read my 20 page report on the pervasiveness of English in South Korea. You want numbers and facts? Go for it. 
You'll find it under useful information for ESL'er's on my website. |
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itaewonguy
Joined: 25 Mar 2003
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| Posted: Wed Sep 05, 2007 9:25 pm Post subject: |
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your wonjung is making a killing!! dont believe him when he tells you he cant afford to give you a raise!
do the math!! some of the big schools with over 10 foreign teachers the owner is making close to 30-50million a month for himself!!
schools like avalon, polly, etc.. the owners are making over 50million a month some even 100million A MONTH!!!! |
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