Fewer Starbucks for More Skills in Chinese Kids
It is not a secret that Chinese parents are spending a lot of money on their children’s extra-curricular activities, hoping to give them an edge to compete with their peers down the road.
Do Not Lose at the Starting Line
In Chinese this saying is 不输在起跑线上. This is an important concept that summarizes the competition starts early. Because when you see it as a race, more preparations would never be a bad thing.
The Very Early Days
In order for the kid to get into the best kindergarten with international teaching faculty and state-of-the-art facilities and a hefty tuition fee (typically 3,000 — 15,000 yuan or USD 428–1,712 per month), parents have to first get into the associated pre-schools. Therefore you would often see pregnant mom-to-be in line for school open-day visits or interview prep consultancy. In Hong Kong, where the competition is the most fierce, the top 5 pre-schools have an admission rate of about 1–4%, which is lower than the reported admission rate of 4.5% at Harvard University in 2019.
The Foundation of Performance.
For example, the fight for baby powder shelf space is immense. In a typical supermarket or online, you will find limitless brands of baby powder imported from U.S., U.K., Australia, New Zealand, Germany, the Netherlands and Switzerland. With prices typically 40–80% higher than domestically produced milk powder, families have no problem buying the best formulae that would help produce the smartest and strongest.
Do Not Skim on Education No Matter How Poor You Might Be
This saying in Chinese is 再穷不能穷教育, which shows the importance of buying the best Education. A recent study revealed that in order to support their children’s extra-curricular education fees:
- 78.3% are willing to sacrifice their own lifestyle
- 38.2% have given up personal interests and activities
- 27.6% have dramatically cut back or totally given up own entertainment
- 33% have traded family holidays
In monetary terms, the majority (66%) are spending 20–50% of entire family income on these extra-curricular Education.
Before Kids Turned 6
There are the golden years for multi-dimension skill development, because once kids get into primary schools at 6, they will lose all their free time to homework and school activities. This window becomes very critical for parents to expose their kids to as many interest classses as possible to identify their potential talents. When we looked online for the variety of classses available, we found literally hundreds of them ranging from the typical academic skills (such as reading, speaking and writing Chinese, English as well as Math) to Arts, Performing Arts, Modeling, Sports, Martial Arts, to Advanced Olympian Math, Memory Training, Public Speaking. Recital, Debate, STEM (Science, Technology, Engineering and Math) and Social Etiquette Training.
How Much Do Parents Spend?
To find out we spoke to a bunch of parents in different cities in China using our internal referrals.
Mrs Zhao, Beijing
“My daughter is in her fifth grade (11 years old). Outside school, she is going to Olympics Math, Advanced English, Piano, Violin, Ballet and Mcing classes. Each year we spend about RMB 50,000 (USD 7,120) on them. Even though they are very expensive we also have no choice. Nowadays kids need to have many different skills as they grow up. We rather get her into classes that she doesn’t like rather than missing the ones that would suit her well.” (宁可错报，不能耽搁)
Mrs. Hu, Shanghai
“My son is now first year Junior High School (12 year old). I have found him tutors for one-on-one Math and English classes. They would cost about 1,000 yuans for two hours. At the beginning, I would sit around some cafe while waiting for him. But once I realize the coffee costs start to add up, I even stopped getting Milk Tea from 7–11.”
Mrs. Li, Nanjing
“ My son XuanXuan is 4 years old. Our friend recently referred an EQ (Emotional Quotient) training class for him. Each class is 90 minutes divided into 70 minutes of training for him and 20 minutes training for me and my husband. The instructors taught him how to manage his anger, fear and other emotions. For us parents, we also learned how to communicate more effectively with XuanXuan. The program is quite effective as my son has become more calm and shows less tantrums at home. We have paid about 12,000 yuan (USD 1,708) for the 60-session program over 9 months.
Digging into the Facts.
Finally, we got on China’ SuperApp Wechat to easily find a few schools near our office in Shenzhen. Our goal was to hear directly from them how much they actually charged.
A Ballet School in Nanshan, Shenzhen China
This school ranks number 3 in the Dance Training category in the Dianping APP with 2,355 check-in and 6,55 five-star reviews. The page is nicely done, filled with hundreds of pictures and videos taken at their recent classes and stage performances. Each instructor has a detailed profile of their credentials. They specialize in classical ballet classes for the age of 3 and above, and have recently opened their 6th location in the city.
Using the Contact Merchant button in the Dianping APP, we got connected to their Center Manager Charmine. When I asked about the detailed fees, she directed us to their Official Wechat account and send us the following:
The programs are designed for different age group for 3-year-old (Enlightenment Level) all the way to 10-year-old+ (Professional Course). Each program has 90 classes with 60 minutes each. The program fees range from 16,200 to 21,600 yuan (USD 2,307 to 3,076) as the child grows older, with average per-hour class of 180 to 240 yuan (USD 25 to 34).
When we asked her for smaller packages citing our uncertainty for “our child’s commitment”, she gave us another option of 34-class instead of 90-class packages with average per-hour class of 200 to 260 yuan (USD 28 to 37). She also mentioned that there are many class slots across the week so it is very easy to schedule multiple classes per week if we want.
So we did this calculation ourselves. By committing to a bigger package, we would save 10% in total. This does seem to be a good idea because as we understand ballet training is something that would take a long time to improve. Therefore we are pretty convinced that most parents would go for the higher but better value option.
The next day, we decided to show up at the school’s another center (not the one we spoke to on Wechat) to check out the actual facility. The location is at the Nanshan Sports Stadium, where they have multiple floors dedicated to Enrichment Centers. Before we got to the Ballet Center, we discovered this a fencing school a Taekwondo school we walked in the reverse traffic of the kids coming off their class.
The ballet school is located past a few other schools at the new wing of the main floor. We were taken by the sound coming from the end where the ballet school is even before we got to the entrance.
Most parents were on their phone while waiting for their daughters in class. There were 8 dance rooms at the facility, each with 15–20 students inside practising with their respective instructors. From their dresses we could instantly recognize that they teach not only Ballet but also Jazz, Folk, and Hip Hop.
Conversation with a parent
Finally, we sat down outside one of the rooms with younger dancers (about 4–6 years old) and struck up a conversation with a mom.
ChinaPOTION: Ni Hao (meaning Hi), is your girl in this class?
Mom: Ni Hao (meaning Hi).
ChinaPOTION: Do you know how much are the classes?
Mom: Oh everything is in the APP.
ChinaPOTION: Great. Which packages would you recommend? My daughter has done the trial and she kinda likes it.
Mom: We paid for the 180-class package as we live quite close. We figured 1 class on weekday and 1 class on weekend and some intensive training in the summer for performances, it would only last about 1 year.
ChinaPOTION: I see. That makes sense. Thanks!
On our way back to the office on a DiDi car (the Uber of China with 90% of the ridesharing market), we did a quick math again:
[8 dance rooms] x [on average 17.5 students in each room] x [180 yuan per student per class] = 25,200 yuan (USD 3,595) in one hour, on a normal Saturday morning.
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