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Highlights of Vietnam's education market

Highlights of Vietnam's education market

Saturday 03, 12 2022
The educational model from preschool to high school is inherently a reliable business model, and Vietnam in particular offers great opportunities for organizations and investors.

A flourishing market

L.E.K. Consulting has recently published a report on the impact of the COVID-19 pandemic on the education sector. The report shows that economic growth has led to strong growth in the private education sector, with a compound annual growth rate (CAGR) of 11% between 2016 and 2020. Despite being affected by the COVID-19 pandemic, Vietnam's economy still recorded a growth of 2-3% in 2020 - one of the highest growth rates in the world.

Vietnamcredit private education sector

Vietnam's private education sector for students from kindergarten to high school (K12) will thrive on rapid economic growth. Vietnam’s education system is divided into four groups: international, bilingual, domestic private, and private.

The bilingual education segment in HCMC and Hanoi grew by 17% per year between 2016 and 2020. With increasing income of the people and the huge demand for learning English, a number of about 3 million students in Ho Chi Minh City and Hanoi tend to move to bilingual school.

Currently, bilingual schools are better equipped to help students prepare for university studies in English-speaking countries. In addition, the tuition fees at these bilingual schools are also lower than in some newly established international schools.

The segment of international schools that offer training programs from the UK, USA or The International Baccalaureate Diploma Program usually target foreign students residing in Vietnam because English is the only medium of instruction. Moreover, foreign families may also be able to afford higher tuition fees.

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A world-class education system can offer opportunity to access higher education abroad more easily, leading to the flourishing of this market in Vietnam in recent times.

Ho Chi Minh City and Hanoi are the centers of high quality education

According to the data provided by cities, the number of students of the right age for high quality education in Hanoi is around 1.3 million. This figure increased by 1.6% during the 2016-2020 period and is forecast to continue growing at a compound annual growth rate of around 2%.

Meanwhile, the size of Ho Chi Minh City's private education market is estimated to be worth around 560 million euros (equivalent to VND 15,200 billion) in 2020, with 25% market share belonging to high-end bilingual schools.

A thriving economy coupled with government initiatives has allowed to increase the affordability of Vietnamese people in the two cities as well as attract more foreigners to reside in the country, thereby creating sustainable demand and strong growth prospects for the private education market.

Vietnamcredit Investors and educational

Investors and educational institutions were quick to seize this opportunity. A number of prominent international investment funds have invested in key assets, while reputable international educational institutions from preschool to high school have expanded their operations in many branches.

Those who are eyeing this market looking for business expansion opportunities will be encouraged by Vietnam's ability to effectively respond to the pandemic and the overall positive signal of the private education sector in Vietnam. The educational model from preschool to high school is inherently a reliable business model, and Vietnam in particular offers great opportunities for organizations and investors.

Source: L.E.K. Consulting

Compiled by VietnamCredit

 

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