New Oriental not worried by competition

Updated: 2015-09-30 08:26

By Su Zhou(China Daily)

  Print Mail Large Medium  Small 分享按钮 0

Many operators of startup online education companies once claimed that they would overthrow New Oriental, the country's largest private online educational chain. Quite a few of them were former employees of New Oriental.

Yu Minhong, chairman of New Oriental, said that instead of being overthrown, New Oriental has managed to evolve by participating in popular entrepreneurship and innovation.

"Inside a well-structured organization, the innovative capability will be limited," said Yu, 53. "There is no doubt that an innovative idea can develop better outside of an organization."

Yu arguably became the richest teacher in China after New Oriental was listed on the New York Stock Exchange in 2006.

New Oriental doesn't plan to wait around to be replaced, Yu said. It has invested in many startup projects, some launched by its former employees.

"If a project works, the company can go public or be bought back and become an important part of New Oriental," Yu said, adding that the projects chosen for investment all have close connections with New Oriental's business chain.

When so many of its challengers are talking about the Internet-Plus strategy or Internet thinking, Yu thinks the topic is not worth discussion.

"No company can turn its back on the Internet and mobile Internet," Yu said.

"However, I don't agree that education can work solely online or offline. It has to be a combination of both. Classrooms, face-to-face interaction and paid classes cannot be replaced."

As a member of the China Entrepreneur Club, Yu has visited many countries to explore innovative ideas and seek partnerships with other Chinese business people.

During his last trip to Germany, he was impressed by the wide adoption of big-data technology at local enterprises.

"No one was talking Internet thinking to me," Yu said.

Yu, a former English teacher at Peking University, said the key point of New Oriental is to build its Internet business chain and ecological chain based on teaching at ground level.

"There are hundreds of startups claiming they are going to replace us. However, as far as I know, some of them are already being replaced by others. And New Oriental is still enjoying an average annual growth rate of 20 percent, both in student enrollment and revenue."

Yu also set up an angel investment fund called Hong Tai with Sheng Xitai, an old hand in the PE industry. The fund, described as Yu's second startup project, focuses on the angel investment and early-stage projects in media, culture, education and entertainment, as well as high-tech and mobile Internet industries.

Twenty out of 50 projects have already entered the "A" financing round, Yu said.

Despite a high failure rate, Yu still considers encouraging innovation and entrepreneurship a good thing because new business models, and even the prototype of China's future big enterprises, will start there.