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Transcript of A Business Initiative: Education Portal in China v. 2.1 1 A Business Initiative for Launching An...
A Business Initiative: Education Portal in China
v. 2.11
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.
September 15, 2000September 15, 2000
A Business Initiative: Education Portal in China
v. 2.12
Why China? Cultural BackgroundsWhy China? Cultural Backgrounds
Population: 1.26 billion Urban: 29% ( = 370 millions) Ethnic groups: Han Chinese, 92% Education: Compulsory, 7 - 17
Literacy (1996): 82%Age Distribution (%)
40-5922%
60 +10%
20-2918%
< 1932%
30-3918%
A Business Initiative: Education Portal in China
v. 2.13
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 and cultural characters
Why China? Cultural BackgroundsWhy China? Cultural Backgrounds
A Business Initiative: Education Portal in China
v. 2.14
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
Why China? Cultural BackgroundsWhy China? Cultural Backgrounds
A Business Initiative: Education Portal in China
v. 2.15
The one and the same Chinese language has been the most cherished fortune for Chinese people through the history to date.
Based on its unified cultural heritage, today’s China could constitute the largest single media market in the world
Why China? Cultural BackgroundsWhy China? Cultural Backgrounds
A Business Initiative: Education Portal in China
v. 2.16
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 at very high rates.
Why China? Economic IndicatorsWhy China? Economic Indicators
A Business Initiative: Education Portal in China
v. 2.17
Household 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!
Why China? Economic IndicatorsWhy China? Economic Indicators
A Business Initiative: Education Portal in China
v. 2.18
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
Why China? Media BusinessWhy China? Media Business
A Business Initiative: Education Portal in China
v. 2.19
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
Why China? Media BusinessWhy China? Media Business
A Business Initiative: Education Portal in China
v. 2.110
Forecast
In the past years, number of Internet users has been doubled every half year. Internet is forming the fastest growing business in China.
China will constitute the largest Internet market of the whole Asia-Pacific region in a few years
Source: CNNIC, August 2000
(Millions)
Why Internet in China?Why Internet in China?
Number of Internet users in China
0.1 0.2 0.5 0.9 2.0 4.68.9
16.928.0
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
A Business Initiative: Education Portal in China
v. 2.111
Since 1998, when the number of Chinese Internet users attained 2 millions, Chinese Internet startups have generated great buzz in the whole society Successful listings of several leading Chinese Internet portals on Nasdaq have resulted in greater enthusiasm of international venture capitals and str
ategic investors
Why Internet in China?Why Internet in China?
A Business Initiative: Education Portal in China
v. 2.112
Despite the overall setbacks of Nasdaq listing companies, the 4 China-based Internet companies are still favored by international investors
Why Internet in China?Why Internet in China?
Note: Figures are based on the closing price on Sep 17, 2000
0
10
20
30
China.com Sina.com Sohu.com Netease.com
Sto
ck P
rice
(US
$)
0
500
1,000
1,500
Mkt
Cap
(US
$ M
illio
ns)
Stock Price Mkt Cap
A Business Initiative: Education Portal in China
v. 2.113
Internet has brought to Chinese people totally new experience: A new world of information A new world of communications A new world of business
The advent of Internet is pointing to the most progressive, well-educated and affluent generation of Chinese people
Why Internet in China?Why Internet in China?
A Business Initiative: Education Portal in China
v. 2.114
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: CNNIC, Jan 2000
Why Internet in China?Why Internet in China?
A Business Initiative: Education Portal in China
v. 2.115
While sina.com is dominating the Internet buzz in China, other e-business-oriented web sites are growing faster than the general interest sites.
8848.net, a Chinese B2C e-shopping portal, is going to be listed on Nasdaq very soon
Why Internet in China?Why Internet in China?
A Business Initiative: Education Portal in China
v. 2.116
Though the fastest growing business segment, Internet in China has great room for new developments Current problems are consisting in the following:
Lack of infrastructures: Payment, credit system, bandwidth Speculation / gamble motives Lack of clear business model and profit zones Lack of long-term objectives Lack of experience Lack of capital market Inefficient distribution system
All these problems suggest that we could carry on more sophisticated thinking on the e-Business developments
Why Internet in China?Why Internet in China?
A Business Initiative: Education Portal in China
v. 2.117
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.
Education: A New DimensionEducation: A New Dimension
A Business Initiative: Education Portal in China
v. 2.118
Compared with other products, knowledge might be the most sustainable and competitive product in the e-Business era Knowledge products are more relevant for people to improve their life quality Knowledge products are easier to sell through the Net Knowledge products don’t require a complicated system of distribution. Fufilments are much cheaper An on-line / off-line mix approach could be easily applied to the knowledge products. Distribution of off-line materials could greatly help sell the programs
Why Education?Why Education?
A Business Initiative: Education Portal in China
v. 2.119
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
Household Spending Distribution(%)
Clothing7%
Home9%
Dailygoods ex.
food8%
Education7%
T&E7%
Insurance4%
Medical3%
Food39%
Saving16%
Source: Gallup 1999
To finance education is among the top priorities for Chinese people
Why Education?Why Education?
A Business Initiative: Education Portal in China
v. 2.120
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 eager to improve 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. 2.121
Under the researches led by a group of leading European, Asian and African researchers, a theory of reciprocal knowledge is been developed, which could constitute a set of methodologies for people to communicate between different traditions and cultures
Instead the traditional “imperialist” communication theories, methodologies based on reciprocal knowledge could constitute a totally new foundation for different people to learn each other Internet, based on its own interactive and decentralized characteristics, could be the best platform for utilizing the reciprocal knowledge
Why Education? Towards Why Education? Towards Reciprocal KnowledgeReciprocal Knowledge
A Business Initiative: Education Portal in China
v. 2.122
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. 2.123
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. 2.124
II. Free education programs: Selected programs in arts and humanities On-line seminars on selected advanced
disciplines like bio-science, hosted by the world leading scientists
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. 2.125
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. 2.126
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 and cross-sales would be a natural result
A Business Initiative: Education Portal in China
v. 2.127
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. 2.128
Business Model: Towards the Business Model: Towards the Profitable Growth in ChinaProfitable Growth in China
(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. 2.129
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. 2.130
The education portal will develop the programs with the following considerations:
Business Model – Customer ServiceBusiness Model – Customer Service
Customer-centric and service-oriented Integrated Interactive Localized Personalized Easy to navigate Applications that require little-to-zero training
A Business Initiative: Education Portal in China
v. 2.131
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 and are able to provide the world class programs Europe:
University of Cergy University of Paris I University of Paris VII University of Paris VIII ENST University Without Walls Transcultural Network, etc.
A Business Initiative: Education Portal in China
v. 2.132
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 and are able to provide the world class programs China:
Chinese Academy of Sciences (CAS) Chinese Academy and Social Sciences Leading Chinese universities
A Business Initiative: Education Portal in China
v. 2.133
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 and are able to provide the world class programs International corporations who can provide certified professional
training programs IBM Cisco Oracle Microsoft, etc.
Professional consultants who can provide corporate training programs Earnest & Young Aplus Business Consulting Ltd., etc.
A Business Initiative: Education Portal in China
v. 2.134
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. 2.135
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. 2.136
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. 2.137
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. 2.138
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. 2.139
Cost & revenue constituentsCost & revenue constituents
Revenues Membership fee Tuition fee: Regular students & trainees Tuition fee: Corporate clients Advertising & sponsorships E-commerce
A Business Initiative: Education Portal in China
v. 2.140
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. 2.141
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$,000)
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
Yr
00
Yr
01
Yr
02
Yr
03
Overheads & G&AResearch & promotionVariable cost
A Business Initiative: Education Portal in China
v. 2.142
Financial forecast: P&LFinancial forecast: P&L
P&L Yr '00 ~ 03
-10,000
-5,000
0
5,000
10,000
15,000
20,000
Yr
00
Yr
01
Yr
02
Yr
03
Revenue Cost Net Income
(US$,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. 2.143
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. 2.144
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. 2.145
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. 2.146
Mr Lu Xiang
3/F, Building C, A3 Baijiazhuang Road, Beijing 100020
*
Tel
(86-10)65923373, 65867609
*
Fax
(86-10)65859114
*
ContactContact