Shunshun Liu Xue, a new o2o(online to offline) platform in China that focuses on overseas study consultation has recently attracted $18 million Series A funding from Hao Wei Lai, a leading Chinese pre-college education company, only 12 days after they received $2 million seed funding from IDG Partners Investment on June 1.
Since 2009, China has surpassed India and ranked the first in its number of international students in the United States. In the 2013-2014 school year, the United Sates hosted 274,439 international students from China, which made up 31% of the total number. There is also a 16% increase when compared to that number of last school year.
Picture retrieved from Institute of International Education
According to Forbes, a Chinese student applying for college in the United States is willing to pay $60,000-$70,000 just in the application process and the most costly part is to hire a consultant, which takes up to $30,000. This number from the stats of AIC Education and Taurus Education is quite on the expensive side for the average cost of hiring a consultant through traditional overseas study agency is from $4,000 to $10,000.
The $70,000 College Application Click on the link/image to be directed to the Forbes video
Founders of AIC Education and Taurus Education were both Chinese graduates from top U.S. colleges. The latter even builds its core consultation and teaching team with all Chinese graduates from outstanding U.S. colleges.
This strategy of Taurus Education did not come out of nowhere.
Getting into an average U.S. college is no longer really attractive to all Chinese students who crave to step on this continent. More often than not, they are more interested in getting into the “good ones”.
Palmdrive, a new study abroad service company started in 2014, has astutely seized the opportunity to get its spot in the competitive overseas study consulting battlefield: starting from Stanford, it manages to get in touch with thousands of Chinese students in the U.S. and get them involved in its business. Its valiant effort leads to the proud statement on its official website: over 90% in the 1329 tutors are from top 30 universities in the world.
According to the comments of several Palmdrive users, they never get to meet their tutors in person from the beginning to the end of the application process. Even so, some believe that the discussion through Skype “has greatly helped in the application process” and that they value the chance to discuss with previous successful applicants.
The screenshot of Palmdrive’s official webpage, showcasing their tutors from top U.S. colleges (From left to right: University of California: Berkeley, Columbia University, Harvard University, The Massachusetts Institute of Technology)
Shunshun, led by Yang Zhang, a 2007 Harvard graduate, is probably trying to take a similar path to success in the overseas study consultation industry.
This platform enables the users, including parents and the students, to find their right consultant match online. Except for an initial meeting offline in one of Shunshun’s experience center, the rest of the application process will be done online.
Previously the general manager of the overseas study department in Education International Cooperation Group(EIC Education), Zhang is more ambitious than his younger counterparts.
Zhang says in 36Kr’s interview that he wants to build a C2C(consultant to client) platform and Zhang claims that it will help to “free” the consultants. In other words, he believes that in this way Shunshun will help to maximize the profit a consultant could gain from the consulting process and thus lead to smaller work load and better work of the consultants.
On the same day Hao Wei Lai filled $18 million in Shunshun, Zhang announced that the consultants in Shunshun were provided with 8,000 yuan(around $1350) base salary plus 100% consulting fees from the client. Considering the old rule of consultant getting around 10% of the consulting fees, Yang Zhang believes that Shunshun will be attractive to the best consultants in this field. As of July, 2015, Shunshun has gathered 54 experienced consultants most of which have worked with over 300 students.
Photo retrieved from www,ycwb.com
As an online platform, Shunshun is also able to offer a more competitive price to its clients. According to Zhang, the price of consultation in Shunshun could be around 80% of the price in traditional agencies.
Zhang’s confidence about this new platform also comes from the support of Hao Wei Lai (Tomorrow Advancing Life). In addition to the $18 million funding, as the first pre-college education company in China that went public (NYSE:XRS), Hao Wei Lai has huge impact in the industry and abundant student resources to support the operation of Shunshun at the early stage.
The overseas study market is a comparatively small one, with around 500,000 clients each year for the largest U.S. market. This market, however, is both increasing in quantity and in demand of high-quality services.
Some service providers are trying to bring better consultants into the game–in Palmdrive, they believe in successful previous applicants; Shunshun, however, is trying to redesign the way to get in touch with client, to change the profit share and even to alter the way overseas study consulting used to be done. Shunshun has undoubtedly taken its first few steps to a faster and more transparent overseas study consulting process, but we might need to find out whether it can provide qualified online service with proper supervision and whether it can attract enough targeted outstanding consultant to fulfill its ambition before we can actually call it a success.