a business initiative: education portal in china v. 2.0 1 a business initiative for launching an...

A Business Initiative: Education Portal in China

v. 2.01

A Business Initiative for LaunchA Business Initiative for Launchinging

An Education PortalAn Education Portalin Chinain China

Presented byPresented by

Zenocom Ltd.Zenocom Ltd.

Aplus Business Consulting Ltd.Aplus Business Consulting Ltd.

Newton Press Ltd.Newton Press Ltd.

August 25, 2000August 25, 2000


v. 2.02

Chinese Cultural BackgroundsChinese Cultural Backgrounds

Population: 1.26 billion Urban: 29% ( = 0.37 billion) Ethnic groups: Han Chinese, 92% Education: Compulsory, 7 - 17

Literacy (1996): 82%

Age Distribution (%)

40-5922%

60 +10%

20-2918%

< 1932%

30-3918%

Over 70% of Chinese people are still living in rural areas under poor conditions


v. 2.03


The Han Chinese culture has been dominated the Chinese history of more than 5,000 years

Though different pronunciations have resulted in hundreds of dialects, the written Chinese language is one and the same

The unified written Chinese language has been the major driving force in shaping the Chinese national identity


v. 2.04


In China, the ability to read and write is the highly respected prestige for people

Teaching children to recite and learn to appreciate ancient poems and articles constitutes the most important part of pre-school education

Ancient Chinese texts of 2000 years ago are far more closer to modern Chinese people than the ancient Greek texts to modern Western people


v. 2.05


Based on its unified cultural heritage, today’s China could constitute the largest single media market in the world. The one and the same Chinese language has been the most cherished fortune for Chinese people through the history to date.


v. 2.06

Chinese Economic IndicatorsChinese Economic Indicators

GDP Growth Rate

0%

2%

4%

6%

8%

10%

12%

'81-90

avg.

'95 '97 '98 '99 '00estm. Source: IMF

Per Capita Annual Income

US$0

US$500

US$1,000

US$1,500

US$2,000

US$2,500

US$3,000

'97 '99

Rural Ten Big Cities

Even amid the financial crisis sweeping the whole Asia, Chinese economy growth kept very high rates.


v. 2.07

Chinese Economic IndicatorsChinese Economic Indicators

The Purpose for Saving0% 10% 20% 30% 40% 50% 60% 70%

For sickness orinjury

To financeeducation

For old age

For child'smarriage

To finance ownbiz

To buy homeappliance

To remodel thehome

Source: Gallup 1999

Household Spending Distribution(%)

Clothing7%

Home9%

Dailygoods ex.

food8%

Education7%

T&E7%

Insurance4%

Medical3%

Food39%

Saving16%

To finance education is among the top priority for Chinese people.


v. 2.08

Chinese Economic IndicatorsChinese Economic IndicatorsHousehold Ownerships

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Color TV

Phone

Pager

Portable Stereo

VCD

CD Player

Mobile Phone

Rural Ten Big Cities Source: Gallup 1999

So, what is next for people to own? Computer and Internet access!


v. 2.09

Chinese Media OverviewChinese Media Overview

Like everywhere else in the world, TV is the single most powerful medium in China

At least 55% of the total population is covered by various TV programs, i.e., total TV audience is more than 700 millions.

Penetration of TV0% 20% 40% 60% 80% 100%

Rural Urban

TV Audience0 100 200 300 400 500 600 700 800

Rural Urban Total

Millions


v. 2.010

Chinese Media OverviewChinese Media Overview

While TV is the strongest medium, Chinese people keep very strong reading propensity

According to the SRG research, over 80% of residents in the big three cities regularly read at least one newspaper

Penetration ofnewspapers

0% 20% 40% 60% 80% 100%

Beijing

Shanghai

Guangzhou


v. 2.011

Number of Internet users in China

0.1 0.2 0.5 0.9 2.04.6

8.9

16.9

28.0

60.0

0

10

20

30

40

50

60

70

Dec '96 Jun '97 Dec '97 Jun '98 Dec '98 Jun '99 Dec '99 Jun '00 Dec '00 Dec '02

Forecast

A Bird View on China Media BusinessA Bird View on China Media BusinessMedia Penetration: InternetMedia Penetration: Internet

In the past years, number of Internet users has been doubled every half year

Source: CNNIC, August 2000

(Millions)


v. 2.012

Internet: The Emerging New MediaInternet: The Emerging New Media

Major Internet players in China: Sina.com (Nasdaq: SINA) Sohu.com (Nasdaq: SOHU) Netease.com (Nasdaq: NTES) China.com (Nasdaq: CHINA) 8848.net

Main Investors: IDG Intel Dell Yahoo!

Sina.com is dominating the Chinese Web-based news service


v. 2.013

Internet has brought to Chinese people totally new experience: A new world of information A new world of communications A new world of business

With the advent of Internet, e-Business has become a dominant theme



v. 2.014


Internet users tend to be: Young and energetic Well educated Eager to try new things

Age breakdown of Chinese Internetusers

Above 406%

36~406%

31~3510%

25~3034%

Below 2444%

88% of users are aged below 35 84% have taken at least 3-year college education

Education breakdown of ChineseInternet users

University orabove52%

3-Yr College32%

High Schoolor below

16%

Source: CNIC, Jan 2000


v. 2.015

While sina.com is dominating the Internet buzz in China, other e-business-oriented web sites are growing faster than the news-oriented sites.



v. 2.016

Problems in e-Business development in China: Lack of infrastructures: Payment, credit system, bandwidth Speculation / gamble motives Lack of clear business model and profit zone Lack of long-term objectives Lack of experience Lack of capital market

All these problems suggest that we need more sophisticated thinking on the e-Business developments



v. 2.017

The current dominant portals are all news-oriented and difficult to present visible profit zones The current e-commerce portals are difficult to present their business models because of the yet-to-complete infrastructures In contrast, the demand for on-line education is outstanding and will constitute a profit generator in the very near future.

Why Education?Why Education?


v. 2.018

To whom the education portal we can address? For getting better career opportunities, large quantity of Chinese business people who are eager to learn business management knowledge and to obtain diplomas from world-known education institutions Tremendous young people who are thirsty for improving their professional skills: computing / networking, finance / accounting, sales / marketing / communications, Western languages Corporate clients who want to improve their employees’ business qualifications Western business people who are eager to learn Chinese business systems and environment.

Why Education? DemandWhy Education? Demand


v. 2.019

To create a web site that is centered with education- and knowledge-related contents and therefore to create a very large web-based community for learning

Provide aggregated entry into online education business, one of the key components of the larger knowledge-related e-commerce in China

Establishing and deepening Chinese educated net citizenship to create new base of customers for cross-selling products and services

Create new, enhanced operating platform for expanding other online knowledge shopping capabilities

On-line education offeringsOn-line education offerings


v. 2.020

I. Vast education- and knowledge-related contents: Create a very large data warehouse of various academic

resources based on multiple partners Daily campus news of both domestic and international education

institutions Info of education opportunities within and outside China On-line editions of both Chinese and European academic

journals and other academic resources Who-is-Who directories of outstanding Chinese and European

professors and researchers On-line directories of library resources E-zines of various disciplines and interests

On-line education OfferingsOn-line education Offerings


v. 2.021

II. Free education programs: Selected programs in arts and humanities Fine Arts Music


Note: Lots of opportunities of sponsorship could be found for

funding these non-profit programs


v. 2.022

III. Paid educational contents Business management courses (MBA) for Chinese students Advanced bio-science education would be the next big thing on the Net Other single-course programs for young professionals: computing / netw

orking, finance / accounting, sales / marketing / communications, Western languages, designing

Corp-sponsored certified training programs in computer sciences. (IBM, Oracle, Microsoft, Cisco, Intel …… would be most interested in such on-line programs.)

Corporate training programs provided by state-of-the-art consulting firms Introduction of Chinese business to European businessmen



v. 2.023


IV. Derived e-Commerce activities Based on the very large communities generated by

the integrated resources and various programs, on-line sales would be a natural result


v. 2.024

On-line education Offerings: On-line education Offerings: SummarySummary

Un-paid edu programs

E-commence

Paid edu programs&

Corp training programs

CommunitiesDirectories

AC resourcesAC-related newsGeneral-interest

newsBiz newsE-zines


v. 2.025

Business Model: For a Profitable Business Model: For a Profitable GrowthGrowth

(1) Create enough knowledge- and education-related information resources ……

(1) Create enough knowledge- and education-related information resources ……

(2) …… so that to create very large communities for on-line learning ……

(2) …… so that to create very large communities for on-line learning ……

(3) …… so that to offer various paid education and training programs and conduct e-Commerce activities

(3) …… so that to offer various paid education and training programs and conduct e-Commerce activities


v. 2.026

The education portal will adopt an external vendor strategy for customer service

Business Model – Customer ServiceBusiness Model – Customer Service

Considerations: Rapid time to market Avoidance of heavy fixed investment Ability to leverage vendor experience in online

services


v. 2.027

The education portal will adopt an external vendor strategy for customer service


Vendor Selected: Those who have significant resources in education Europe: University of Cergy, ESSEC, University Without Walls,

Transcultural Network, etc. China: Chinese Academy of Sciences (CAS), Chinese Academy and

Social Sciences and several outstanding universities International corps like IBM for professional training programs Other: Earnest & Young and Aplus Business Consulting Ltd. for

corporate training programs


v. 2.028

Approach: On-line / Off-line Mix


Because of the inadequacy of the bandwidth, we would like to try a mixed approach for the proposed programs Students / trainees study at home or at work based on the

interactive CDRoms and textbooks step-by-step On-line Q&As and discussions between students / trainees and

tutors Vis-a-vis instructions several times in a year. (In any case,

physical contacts are necessary for all education programs.) [In the places where broadbands are available and affordable, we

could try a pure on-line model.]


v. 2.029

Low risk cost structure Limited up-front investments Strong push for variable cost structure Low break-even point

Aggressive outsourcing Rapid time to market Ability to flexibly test and analyze multiple offers Soft / gradual launch

Business Development StrategyBusiness Development Strategy


v. 2.030

Phase One (Oct 2000 ~ Mar 2001) Overall designing of the architectures, especially the

database structure Setup of the operation entity and the work team Integration of major academic resources: at least

200,000 contents pages Setup of partnerships Key government relations and approvals

Timing & ScheduleTiming & Schedule


v. 2.031

Phase Two (Feb ~ Jun 2001) Definite designing of the paid education contents Construction of paid contents Launch of the free contents Construction of physical education institution Integration of related parties in Europe and China Integration of the work flow Test of the learning programs



v. 2.032

Phase Three (Jul ~ Sep 2001) Completion of the paid contents construction and final

test of the learning programs Pre-launch marketing Launch of the Europe MBA and the corporate training

programs Student enrollment: Europe MBA and corporate training

programs



v. 2.033

Cost & revenue constituentsCost & revenue constituents

Revenues Membership fee Tuition fee: Regular students Tuition fee: Corporate clients Advertising & sponsorships E-commerce


v. 2.034

Cost & revenue constituentsCost & revenue constituents

Costs Pre-launch cost: site construction and

research Variable cost: ongoing site expansion and

mantainence Research, public relation & promotion Overheads


v. 2.035

Financial forecast:Financial forecast:Revenue & costRevenue & cost

0

2000

4000

6000

8000

10000

12000

14000

16000

18000Y

r 0

0

Yr

01

Yr

02

Yr

03

E-commerceAdverisingTuition fee: Corporate clientsTuition fee: StudentsMembership fee

US$,000)

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

Yr

00

Yr

01

Yr

02

Yr

03

Overheads & G&AResearch & promotionVariable cost


v. 2.036

Financial forecast: P&LFinancial forecast: P&L

P&L Yr '00 ~ 03

-10,000

-5,000

0

5,000

10,000

15,000

20,000

Yr

00

Yr

01

Yr

02

Yr

03

Revenue Cost Net Income

(US$,000)

Cum P&L Yr '00 ~ 03

-20,000

-10,000

0

10,000

20,000

30,000

40,000

50,000

Yr 0

0

Yr 0

1

Yr 0

2

Yr 0

3

Cum Revenue Cum Cost

Cum Net Income

(US$,000)


v. 2.037

Leading entities Aplus Business Consulting Ltd.: The leading Chinese consulting firm

specializing in marketing communications and customer publishing for international IT clients. In the past years, IBM, Cisco and Compaq are among its client list.

Newton Press Ltd.: An affiliate to Aplus, specializing in print media business and consulting for international publishing companies. It has formed close partnership with several European publishers.

Zenocom Ltd.: Also an affiliate to Aplus, specializing in development of Web business. In addition to its “Science on Line” (SOL) Web site, it is providing Web content service to IBM, Cisco, Compaq and iTeleWeb Inc.

Participants in ChinaParticipants in China


v. 2.038

These three entities, all under the leadership of Mr. Lu Xiang, will join hands together to form partnership with European institutions. Their resources relating to Web content creation will be integrated into one force.

Under Zenocom’s name, negotiations for an acquisition of the Information Center of the Chinese Academy of Sciences is ongoing



v. 2.039

Supporting entities Chinese Academy of Sciences.: The leading and the

largest scientific research organization in China. Chinese Academy of Social Sciences.: The leading and

the largest research organization specializing in humanities and social sciences.

Fudan University, Nanjing University & Zhejiang University: Major leading universities in the most affluent region of China

China National Library.: The largest library in Asia.



v. 2.040

Mr Lu Xiang

3/F, Building C, A3 Baijiazhuang Road, Beijing 100020

*

Tel

(86-10)65923373, 65867609

*

Fax

(86-10)65859114

*

Email

[email protected]

[email protected]

ContactContact

a business initiative: education portal in china v. 2.0 1 a business initiative for launching an...

Documents

u education

education portal

chinese media overview

years u

business initiative

chinese history

u computer

u urban