After Beijing’s crackdown on the country’s once-lucrative tutoring sector, K12 businesses struggle to reinvent themselves by, among others, selling products on the internet
China’s tutoring company Gaotu Techedu (GOTU: NYSE) (Chinese: 高途教育) on March 2 added new businesses including online food sales, according to Tianyancha.com, a business data platform.
The company also added sales and retailing of cosmetics, general merchandise, farming products, and commercial real estate lease.
Established in 2014, the company, with legal representative Luo Bin and a registered capital of CNY 55 million (USD 8.713 million), was one of the largest online after-school tutoring brands in China.
But the high-flying sector crumbled after the government prohibited for-profit tutoring in any school subject for students receiving compulsory education last July. Companies have been searching for chances to branch out into new business areas.
Gaotu is not the first or only education firm to dabble in e-commerce. New Oriental (EDU: NYSE, 09901:HK) (Chinese: 新东方), another tutoring giant, shifted toward live-streaming e-commerce late last year to sell agricultural products. Its merchandise also included life’s essentials, clothing, bags, and suitcases.
TAL Education (TAL: NYSE) (Chinese: 好未来) tried to help teachers become anchors, encouraging them to sell textbooks and stationery through online platforms.
IDG-backed Yuanfudao (Chinese: 猿辅导) invested in selling down jackets, though the company denied this was their core business and said it would explore quality education.