Goldman Sachs China Education April Tracker: ByteDance and TAL Lead AI Scale-Up; Offline Tutoring and Overseas Study TAMs Under Pressure
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Goldman Sachs' April China education tracker highlights a structural divergence. ByteDance and TAL are spearheading AI software and hardware scale-up. AI education hardware shipments surged 40% year-over-year, while software subscription revenues grew 60%. ByteDance's AI education products reached 50 million monthly active users (MAU). TAL increased its AI course revenue contribution to 20%. TAL's learning tablet gross merchandise value (GMV) grew 20% year-over-year, while Xueersi.com MAU increased 19%. Notably, Gauth generated $1.0 million in billings, up 35%, with a 49% rise in monthly billings per average DAU.
Conversely, offline tutoring and overseas study continue to face sustained total addressable market (TAM) headwinds. Policy restrictions are expected to shrink the offline tutoring TAM by 15%. The overseas study market has slowed to 5% growth due to tighter visa requirements and rising costs. Although high-end overseas consulting remains resilient, traditional tutoring agencies face pressure to transition toward AI-assisted instruction.
Despite the robust expansion in AI educational technology, it cannot fully offset the declines in traditional businesses. Consequently, overall industry revenue growth is revised down to 8%, below the previous forecast of 12%. Policy risks remain the primary uncertainty for traditional segments, while leading AI-focused companies experience shortened investment return cycles and improved profitability.
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