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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
A Business Initiative: Education Portal in China
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
A Business Initiative: Education Portal in China
v. 2.03
Chinese Cultural BackgroundsChinese Cultural Backgrounds
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
A Business Initiative: Education Portal in China
v. 2.04
Chinese Cultural BackgroundsChinese Cultural Backgrounds
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
A Business Initiative: Education Portal in China
v. 2.05
Chinese Cultural BackgroundsChinese Cultural Backgrounds
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.
A Business Initiative: Education Portal in China
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.
A Business Initiative: Education Portal in China
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.
A Business Initiative: Education Portal in China
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!
A Business Initiative: Education Portal in China
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
A Business Initiative: Education Portal in China
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
A Business Initiative: Education Portal in China
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)
A Business Initiative: Education Portal in China
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
A Business Initiative: Education Portal in China
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
Internet: The Emerging New MediaInternet: The Emerging New Media
A Business Initiative: Education Portal in China
v. 2.014
Internet: The Emerging New MediaInternet: The Emerging New Media
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
A Business Initiative: Education Portal in China
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.
Internet: The Emerging New MediaInternet: The Emerging New Media
A Business Initiative: Education Portal in China
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
Internet: The Emerging New MediaInternet: The Emerging New Media
A Business Initiative: Education Portal in China
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?
A Business Initiative: Education Portal in China
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
A Business Initiative: Education Portal in China
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
A Business Initiative: Education Portal in China
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
A Business Initiative: Education Portal in China
v. 2.021
II. Free education programs: Selected programs in arts and humanities Fine Arts Music
On-line education OfferingsOn-line education Offerings
Note: Lots of opportunities of sponsorship could be found for
funding these non-profit programs
A Business Initiative: Education Portal in China
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
On-line education OfferingsOn-line education Offerings
A Business Initiative: Education Portal in China
v. 2.023
On-line education OfferingsOn-line education Offerings
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
A Business Initiative: Education Portal in China
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
A Business Initiative: Education Portal in China
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
A Business Initiative: Education Portal in China
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
A Business Initiative: Education Portal in China
v. 2.027
The education portal will adopt an external vendor strategy for customer service
Business Model – Customer ServiceBusiness Model – 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
A Business Initiative: Education Portal in China
v. 2.028
Approach: On-line / Off-line Mix
Business Model – Customer ServiceBusiness Model – Customer Service
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.]
A Business Initiative: Education Portal in China
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
A Business Initiative: Education Portal in China
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
A Business Initiative: Education Portal in China
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
Timing & ScheduleTiming & Schedule
A Business Initiative: Education Portal in China
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
Timing & ScheduleTiming & Schedule
A Business Initiative: Education Portal in China
v. 2.033
Cost & revenue constituentsCost & revenue constituents
Revenues Membership fee Tuition fee: Regular students Tuition fee: Corporate clients Advertising & sponsorships E-commerce
A Business Initiative: Education Portal in China
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
A Business Initiative: Education Portal in China
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
A Business Initiative: Education Portal in China
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)
A Business Initiative: Education Portal in China
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
A Business Initiative: Education Portal 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
Participants in ChinaParticipants in China
A Business Initiative: Education Portal in China
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.
Participants in ChinaParticipants in China
A Business Initiative: Education Portal in China
v. 2.040
Mr Lu Xiang
3/F, Building C, A3 Baijiazhuang Road, Beijing 100020
*
Tel
(86-10)65923373, 65867609
*
Fax
(86-10)65859114
*
ContactContact