December 2013 issue

News Round Up
Inside the industry
Agency Survey
Secondary Focus 1
Secondary Focus 2
Tertiary Focus 1
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Market Analysis

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Robust China and Hong Kong

Stable demand for education abroad among Chinese and Hong Kong students is continuing to favourably impact business for outbound agents, as Claire Twyman reports.

Key points
The total number of students placed by the eight agencies in our survey was 1,361
Individual agencies placed between 30 and 540 students on courses per year
Average business growth was 10.6 per cent
The average length of stay for Chinese and Hong Kong students was 20 weeks
Overall, 69 per cent of Chinese and Hong Kong students preferred residential accommodation when studying overseas
The largest percentage of Chinese and Hong Kong students (92 per cent) were studying for the purpose of further studies overseas
Higher education is the largest sector of the study abroad market for Chinese and Hong Kong agencies (47 per cent)

Most popular course requests Average percentage of agency business by sector
1. University foundation 27.5%
2. GCSE/A-level/IB/Pre-U24%
3. Under-/postgraduate degree 23%
4. Junior 14%
5. General 3.5%
6. Academic preparation 3%
7. Language plus work 2%
8. Intensive 1.5%
9. Summer vacation 1%
1.Higher Education 46.7%
2.Secondary 45.6%
3.Language 4.6%
4.Work and travel 2.8%
5.Volunteer 0.2%
6.Internships 0.1%

Reasons for studying overseas Top destinations

1.Further studies overseas 92%
2.Future work 5%
3.Pleasure 1.5%
4.Other 1.5%

1.USA 53.4%
2.UK 31.4%
3.Canada 9.3%
4.Australia 3.3%
5.New Zealand 1.9%
6.Germany 0.6%
7.France 0.1%

How do agents recruit students?
How do agencies find new schools to represent?

1.Word-of-mouth 33.1%
2.Seminars to students 20.2%
3.Internet 11.5%
4.Press 10.2%
5.E/online marketing 8.1%
6.Mail shots 6%
7.Advertising on TV/radio 2.9%
8.Other 8%

1.B2b conferences 62%
2.18% Fairs and expos
3.Internet 10%
4.STM 4%
5.Other press 4%
6.Other 2%

Market growth

Demand for an overseas education from Chinese and Hong Kong students showed little sign of waning over the past 12 months, with six of the eight agent participants in this survey reporting business growth of between 10-to-34 per cent. Business remained stable for one Chinese agent, while another from Hong Kong saw a decline. Overall average growth was at a healthy 10.6 per cent – double the rate of our last agency survey on China in 2011 (see LTM January 2011, p42). However, it must be noted that this survey is of three agencies from China, four from Hong Kong and one anonymous participant.

“According to figures from the Ministry of Education, the number of Chinese students studying abroad has increased by 20 per cent every year over the past five years,” affirms Xuewen E., Vice President of the Beijing Overseas Study Service Association (Bossa) in China – the largest association representing Chinese agents. Fuelling demand is a limited number of places available for domestic students at Chinese universities, due to oversubscription, as well as students desiring a Western education. “The market is also growing because of favourable economic conditions,” he adds, favouring parents who want their children to take the American SAT test at high school, which is not readily available in the country.

And in Hong Kong, agent participants report similar growth trends. “It is estimated that 30,000 students from Hong Kong study abroad each year,” says one agent with a growth rate of 30 per cent over the past 12 months. “Demand for HE is high because universities in Hong Kong are also full.”

Language and destination trends

English was the language of choice for 98 per cent of Chinese and Hong Kong students, with programmes taught in languages including French, Italian and Spanish making up a small percentage of bookings. With the majority of students looking to study in English-speaking countries such as the USA (53.4 per cent) and the UK (31.4 per cent), this is not surprising. There was more differentiation between destinations choices in our 2011 survey of Chinese agents though, with Japan, Korea and Asian EFL countries such as Singapore and Malaysia making the top destination list on that occasion.

The USA gained 20.2 percentage points since the last survey, while the UK and Canada received an additional 14.4 and 2.3 points respectively. Australia and New Zealand collectively had 5.2 per cent market share in this survey, while Germany and France received 0.7 per cent of bookings (none in the 2011 survey).

Student and course trends

Most students studied abroad for future study purposes overseas in this survey, while only 66 per cent did in 2011. Five per cent wanted to increase their future work opportunities this time, while three per cent were studying purely for pleasure or for other reasons.

This trend is reflected in the types of courses chosen, with university foundation courses (27.5 per cent) and secondary education courses (24 per cent) taking the top spots. The result is skewed, however, because one Hong Kong agent that worked with 500 students over the past 12 months placed 200 on university foundation courses, while others placed comparatively fewer clients on this programme type. If this agent’s results were omitted, foundation courses would represent 8.3 per cent of bookings. Still, this proportion is fairly sizeable.

Under- and postgraduate degree courses were not far behind with 23 per cent of bookings. Language programmes made up 22.5 per cent – a shift since the last survey where 45 per cent of students requested language courses.

Agency business

The importance placed on secondary education overseas has grown, making up 45.6 per cent of agency business – only 1.1 per cent behind HE. In 2011, HE accounted for 54 per cent of business, while secondary education represented 25 per cent. Meanwhile, language programme enrolments have dropped by 8.4 percentage points, while volunteer and internship placements have also declined.

In terms of student recruitment methods, word-of-mouth accounted for 33 per cent of enrolments in both surveys, while seminars to students were more popular in this survey (20.2 per cent). One Chinese agent commented that social media is a useful recruitment tool. In total, 11.5 per cent of enrolments came via the agency website, while 8.1 per cent were via online marketing. The most popular way to forge new partnerships with schools was through b2b workshops (62 per cent), with one citing Alphe Japan, Alphe Korea and ICEF workshops. Student fairs and expos were also popular (accounting for 18 per cent of partnerships).

Looking ahead

“Over the past seven or eight years, very few agencies have been approved by government to operate legally,” says Xuewen, adding that some otherwise reputable agencies are operating without a license. Earlier this year, though, he explains the government decentralised agency licensing powers from federal government to local education departments, who should have the capacity to license more deserving agencies. “In 2014, there will be a boom of new approved agencies,” he says.

Hong Kong agents are generally also optimistic, although one says that he hopes the recent restructuring of the education system does not have a positive impact on domestic enrolments. Another anticipates a modest increase due to a new partnership with a popular university in the USA and increased marketing activities. He has also started to see a small increase in requests for other Asian languages such as Japanese and Korean, which he thinks might continue into 2014. claire@hothousemedia.com

China Key Facts

Population: 1,349,585,838
Unemployment: 6.5%
GDP per capita: US$9,300
GDP growth rate in 2012: 7.8%
Inflation rate in 2012: 2.6%

Source: CIA Factbook

Import commodities: engineering products, chemicals, transport equipment, energy products, minerals and nonferrous metals, textiles and clothing, food, beverages and tobacco

Hong Kong Key Facts

Population: 7,182,724
Unemployment: 3.3%
GDP per capita: US$52,300
GDP growth rate in 2012: 1.4%
Inflation rate in 2012: 4.1%

Thank you to the following agencies for taking part in this survey: British United Education Services; Guangdong CTS Visa Consulting Service; Hamilton Gregg International Educational Consulting; Hong Kong Overseas Study Centre/Hong Kong Study Tours Centre; Milton International Education Group; Unis Education; and UK Education Association. NB: one agency answered the survey anonymously.
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