Preschool or Childcare Market in China – Dual-Income Households to Boost Market Growth | Technavio


BEIJING–()–Technavio’s latest market research report on the preschool or childcare market in China provides an analysis on the most important trends expected to impact the market outlook from 2017-2021. Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.

The preschool or childcare market in China is expected to grow at a CAGR of more than 14%. The abolishment of the one-child policy and the increase in the average household income of people has led to low-price sensitivity resulting in an increase in demand for quality education. A few of the cities that have the highest number of preschools or childcare centers in China include Shanghai, Hunan, Henan, Guangdong, and Sichuan.

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The top three emerging market trends driving the preschool or childcare market in China according to Technavio research analysts are:

  • Increase in educational expenditure in Chinese households
  • Growing dual-income households
  • Rising investments in education sector

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Increase in educational expenditure in Chinese households

China has seen an increase in the living standards of Chinese citizens, owing to urbanization. In 2016, the country's urbanization was over 50% and this is expected to increase by 10% over the next decade. This will eventually lead to higher GDP per capita, paving the way for improved disposable income.

According to Jhansi Mary, a lead analyst at Technavio for k12 and higher education research, “Education has been a key area of expenditure in Chinese households. The growing disposable income or increase in wealth enables parents to provide quality education to their children. With higher living standards in China, people are engaging themselves in spending a significant amount of money on education, entertainment, and cultural activities. Although this trend is visible in all the segments of the education market, it is the most pronounced in the higher education segment.”

Growing dual-income households

There has been a significant increase in the number of working women in China comprising of 46% of the country's labor force. An increase in the number of working mothers has led to a rise in the disposable income. Owing to this, an increasing number of families in China can afford good preschools for their children. This will enhance the number of enrollments.

In such households, parents also have higher awareness pertaining to the benefits of sending children to preschools for learning activities. Furthermore, dual-income households have a good understanding of the types of preschools and can choose the appropriate preschool for their children.

Rising investments in education sector

The growth of the education market and the rising importance of standardized tests have led to an increase in start-ups in the test preparation market in China. Initiatives such as Project 211 and Project 985 by the government of China help in strengthening the growth of higher educational institutions.

The government has made preschool education mandatory in China. This has driven the growth of the education market in the country. Parents in China are seeking preschool education for their children before sending them to primary schools. Therefore, significant investments are being made in preschools to provide the best facilities and infrastructure to students.

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