The transfer, although in its early phases, will give IDP direct entry to the IELTS market in China, valued at $380 million, 40% of the worldwide IELTS market value $1bn.
“We undertook a strategic evaluation of the mainland China market. We’ve been taking a look at the marketplace for a while, and we consider the time is true to change our strategy to that market.
“We all the time noticed our absence from that market from an IELTS testing perspective as a niche in our protection,” mentioned IDP CEO and director Tennealle O’Shannessy, in an organization 2024 annual earnings name on August 29.
Whereas noting that the enlargement was nonetheless in its “early days”, O’Shannessy highlighted the scale of the Chinese language market – the most important globally – and the advantage of diversifying IDP’s international IELTS enterprise away from India, which is experiencing better volatility brought on by regulatory adjustments worldwide.
IDP is anticipated to be operational in China by the second half of 2025 and its market entry is predicted to extend the corporate’s earnings by a mean of 5% from 2026-2028, in accordance with a report by Morgan Stanley.
IELTS’ huge international operations are carried out by a collaborative partnership between the British Council, IDP and Cambridge English, with every organisation holding an equal one-third share.
Up till now, IDP has held an settlement with BC, which has traditionally been accountable for all points of promoting and distribution of the check in China, with IDP receiving a royalty charge, paid on per check foundation.
IDP lately introduced it received’t be renewing the settlement, which means it can not obtain the royalties however is free to distribute the check in China, competing towards BC because it does in most international markets.
In keeping with O’Shannessy, the transfer is pushed by IDP’s “strategic goal of increasing our geographic presence by reaching extra individuals in additional locations”.
Whereas the IELTS China market carries an estimated worth of $380m and delivers roughly 850,000 exams yearly, India’s market (for which IDP is the only real operator) is at the moment valued by Morgan Stanley at $200m.
We all the time noticed our absence from that market from an IELTS testing perspective as a niche in our protection
Tennealle O’Shannessy, IDP
Moreover, China is experiencing a lesser affect from regulatory adjustments in Australia, the UK and Canada than India the place there was better scrutiny and scholar visa denials.
From January to June 2024, visa approval rankings in Australia have been down by 14% and 51% for China and India respectively, with the UK seeing aa 15% discount in visas for Chinese language college students, in comparison with 28% in India.
In Canada, China’s visa approval charges final yr have been +20% for China and +5% for India, in accordance with the report.
By 2028, Morgan Stanley estimated that IDP could have a 40% share of IELTS in China, the place it’s planning to outsource its testing community to a longtime testing operator, with advertising and marketing and examiners organized by IDP.
Such a mannequin will velocity up IDP’s entry in China and make it “capital mild”, mentioned Morgan Stanley, stating that the undisclosed companion is a “respected operator with an already well-established geographic presence”.
At the moment, British Council and TOEFL (ETS) have an estimated 100 testing centres in China, with Pearson PTE working roughly 40.
Given British Council’s 20+ years available in the market, “loads of the heavy lifting on model funding has already been achieved by BC” and IELTS is positioned because the primary English language check in China, additional easing IDP’s entry into the market.
