Local Media Company Makes Inroads Into Tuition Business

It was reported by The Business Times on 5 August 2017 that the local media giant, Singapore Press Holdings (SPH) would join hands with the Han Language Centre, the most established and largest Chinese tuition centre in Singapore, with a total of 19 outlets across the island. SPH will acquire a 75% stake of the Han Language Centre with a total of $8.5 million. This was after the media company’s strategic move to invest $12 million in the pre-school education provider, MindChamps in 2014.

There has been overwhelming media publicity on the success of local tuition business in Singapore. The increasingly intense competition has prompted many tuition centre owners, including economics tuition providers, to resort to aggressive marketing on various media platforms. The local dailies run by SPH are among the popular choices by tuition centre owners such as economics tuition centre owners to advertise their services among the students and their parents. One can safely conclude without looking at the financials of SPH that these tuition providers, be it economics tuition, mathematics tuition or others, have contributed a great deal to the media company’s annual revenue. A one page advertisement by an economics tutor for example, can cost around S$40,000. Is it not unusual for an economics tutor to put up 4 such advertisements each year. Was it the lucrative profit that had drawn the media company to make inroads into this billion dollar tuition business?

A Move to Strengthen their Education Portfolio

According to the media report, this was a move to strengthen SPH’s education portfolio. SPH currently holds a 22% stake in MindChamps, a reputable name for pre-school education in Singapore. With this new joint venture with the Han Language Centre, it now gets to enjoy a share of the pie of Chinese tuition targeting primary and secondary school students. Will the media company stop at pre-school education and Chinese tuition for primary and secondary levels? I believe not. On the contrary, I believe in time to come, it will take a step further to penetrate into education services for other subjects like economics tuition and mathematics tuition and at various other levels like JC and even tertiary levels.

A Win-win for the Media Company and the Chinese Tuition Centre

The joint venture between SPH and the Han Language Centre is definitely a win win for both parties. On the one hand, the media company gets a share of the lucrative pie of Singapore’s billion dollar tuition business. On the other hand, the Chinese tuition centre can tap on SPH’s vast resources to further expand its reach to more learners in Singapore. When it comes to tuition, media publicity is probably the second most important source of information for parents, just next to word-of-mouth. That is also why some tutors, especially economics tuition providers fork out hundreds of thousand dollars to advertise in newspapers every year. With this collaboration, the media group will spare no efforts in promoting the Chinese tuition centre on all available platforms in order to maximize its share of profit.

The Way Forward for Tuition Business

In the face of the intensified competition in tuition market, especially economics tuition, a small or less successful tuition centre may lose its market share to a big and more reputable one. To survive in the competition, some small tuition centres including economics tuition centres may look at partnering other tuition centres or large companies to gain access to rich resources for further business development/expansion. The partnership will not only create synergy among tuition centre owners, but also bring about saving on cost of rental, advertising and so on.

In conclusion, with more and more joining in the competition, be it economics tutor, mathematics tutor or even the media company, the way forward for tuition business will be consolidation. Only by doing this, they can stay unscathed and emerge even stronger in the increasingly intense competition.

Linda Geng

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