3 Feb 2017
Unregulated but Profitable: China's After-school Child Care Market
- Photo: After-school fun at a Best Choice care centre. (Best Choice)
- Photo: Collection time outside one primary school.
- Photo: PX Union’s centre in Wuyang.
- Photo: Best Choice’s Huaqiao New Village centre.
- Photo: Sleeping arrangements at one Best Choice centre.
- Photo: PX Union’s canteen facilities.
- Photo: After-school snacking.
- Photo: Homework help at Best Choice.
With two working parents now the norm in many mainland households, after-school childcare centres are flourishing as never before, with add-on educational support proving a much sought-after service in this largely unregulated sector.
Many mainland cities are now home to a growing number of 'little dining tables' (xiaofanzhuo), dedicated after-school care centres that cover the gap between the end of class and the time that busy parents get home from work. Providing children with meals and a place to rest, many of these centres are located close to schools, with some operating from rented premises in nearby residential buildings.
Although popular, the food, bed and nanny services offered by such centres may no longer meet all of the needs of many mainland families. This has led to the arrival of a new generation of after-school centres that offer both child-care and educational facilities.
Based on several recent visits to primary schools and after-school centres in the Guangzhou area, it is clear that the demand for after-school child care remains robust, with those institutions that go the extra mile being particularly sought out.
After-school Care Services
According to 2016 figures from the National Bureau of Statistics, China is home to 96.922 million primary school students. Based on these statistics, it is estimated that at least 30 million urban households are in need of after-school care services.
In light of the huge demand for their services, many of the more well-known after-school child-care centres have secured multiple rounds of financing, with investment in such facilities having accelerated over recent years. It is now expected, though, that those centres that offer both care facilities and homework support will prove the most successful over the long-term.
A visit to the Tieyi Primary School in the Yuexiu district of Guangzhou demonstrated how these centres currently operate. As classes finished, staff from several care centres were waiting outside the school ready to greet their young charges, with each holding a sign bearing the name of their particular facility, including Xiaoshentong (Whizz Kid), Feima (Fat Mum), Losorn Robot and Lexueshi. Having lined up behind the appropriate sign, the children were then shepherded to their respective care centre.
The facilities at the PX Union centre in Guangzhou are typical of what awaits many of them. Here the sleeping area is divided into separate sections along gender lines, with each child assigned their own bed. All of the rooms are kitted out with ultra-violet disinfection lamps, mosquito traps and air purifiers. Children who chose not to take a nap have the option or reading or doing their homework, all under the watchful eye of qualified teachers. Afternoon snacks and evening meals, meanwhile, are prepared by expert dietitians and feature a mixture of meat, vegetables, fruit and dairy products designed to ensure that the children's nutritional needs are properly met.
Another popular chain is Superior, a Taiwan-based after-school care and tutoring network (www.super888.com.tw), which operates on the mainland under the Best Choice (www.chaoyou100.com) brand. Outlining how competitive the sector has become, Huang Yunzhi, a teacher at the group's Huaqiao New Village facility, said: "There are at least 15 child-care centres within five minutes' walk of our centre. There is even another Taiwan-funded institution just across the street from us."
Among its locally-owned competitors is PX Union (www.px-union.com), which first opened its doors over the summer 2016 vacation. According to Ms Shi, a member of the centre's teaching staff, the original plan was to take just 10 students. Overwhelmed with inquiries from parents, the centre had 30 children on its books within six months of opening. With space for a maximum of 60, it is now considering screening applicants prior to admission.
In Beijing and a number of other major mainland cities, the problem of child care is aggravated by the heavy smog that often forces primary schools to suspend classes. With both parents working in many families, some child-care centres are now offering temporary help on smoggy days.
While demand is great for such services, competition is extremely keen, with many care centres offering a premium range of services as a way of wooing parents. PX Union's Wuyang centre, for instance, offers the option of afternoon care, evening care and day care, as well as summer and winter vacation care packages. According to Shi, the centre is now also offering discounts on some of its service in a bid to boost its appeal and strengthen its brand image.
With Chinese parents all too willing to spend heavily on their children's safety and education, several established Taiwan child-care chains are now eyeing the mainland as the primary target for their expansion plans. At the forefront of this is Superior, which was founded in 1984 and now has 16 directly run centres in Taiwan, as well as 186 franchised operations.
This upmarket after-school child-care provider first ventured onto the mainland in 2014 and now has six directly run and 58 franchised centres around the country. According to Zhang Suozhu, its Mainland Business Development Manager, while the child-care market is huge, to date there are very few established brands. One of the key problems, he believes, is the lack of properly trained staff in many domestically managed care centres. By contrast, Superior is committed to continually providing vocational training for all off its employees.
In the case of Best Choice, it puts a particular emphasis on finding just the right site for its child-care centres. Each location must have an area of at least 300 square metres and has to be set in a commercial building compliant with all fire safety regulations.
Once selected, the company claims to spend about RMB8,000 per square metre on suitably refurbishing a new facility. For a 300-square-metre centre, it would cost between RMB250,000 and RMB300,000 (US$36,360-43,633) to provide the kind of comfortable, clean and bright environment that the group prides itself on. It may well be a good investment, with many parents prepared to pay a premium to child-care centres with an appealing environment and a higher level of service. Overall, Zhang remains optimistic about prospects in the sector, expecting the market to expand and established brands to ultimately reap the benefits.
Best Choice also attaches considerable importance to the provision of appropriate hardware facilities. According to Tang Wenting, Head of the chain's Huaqiao New Village centre, its parent company – Superior – has been operating in Taiwan for 30 years, allowing it to develop a high level of management and operational systems. This allowed the Huaqiao New Village to immediately benefit from the group's established hardware and educational protocols. Its teachers have also had the advantage of access to the group's existing training programmes, as well as its extensive educational resources.
According to Huang Yunzhi, a Teacher at the centre, Best Choice sets high standards for all its tutors, with all recruits having to be university graduates. Teachers are also required to attend three-day training courses at the company's Dongguan headquarters six times a year.
Rich and Varied Curriculum
In light of rising mainland income levels and changing attitudes among a new generation of parents, many after-school child-care centres now offer children far more than meals and a place to rest. As well as helping students with their homework, many offer a range of hobby and art classes.
According to Shi, his centre PX Union now offers a time-management course for primary three pupils and above. This teaches children how to plan their daily lives and study regimes, encouraging them to set a time for each activity and to stick to that schedule every day. The centre is now planning to introduce a course designed to boost each student's individual creativity.
On Superior's part, Zhang says the company provides a far greater variety of educational services than most other mainland child-care centres. As well as looking after children and assisting them with their homework, the group aims to nurture their talents with a diverse curriculum that extends to crosstalk and a range of artistic pursuits.
In the case of Best Choice's Huaqiao New Village centre, Huang says different themes are adopted on a regular basis, including a movie day, a story day and a fun English day, as well as regular competitions. The centre is also planning a winter camp over the 2017 winter vacation, which will allow participants to sign up for classes in art appreciation, reading, go chess, Japanese, English and a host of other subjects.
According to Tang, the Head of the centre, Best Choice's biggest selling point is its focus on education. In addition to its core facilities, the group places a considerable emphasis on education, frequently organising study trips for its teaching staff. During one such trip to Shenzhen, several of its teachers were introduced to the concept of maker education, a discipline that extends across programming design, robotics and several other creative fields. Recognising its value to the future development of students, the subject has now been incorporated into Best Choice's core curriculum.
While the teachers of both Best Choice and PX Union are confident they can meet the needs of the overwhelming majority of pupils, they also work with third parties when required. This can see external tutors brought in to provide additional support to students struggling with particular subjects, such as English or maths.
At present, China's after-school care market is largely unregulated, with different provinces adopting different guidelines. This has resulted in fees and standards varying considerably, while a whole host of service providers has emerged that damage the integrity of the sector with poorly trained staff and inadequate resources.
The hygiene standard of some child care-centres has also proved to be a concern, with a number reportedly having fly-infested kitchens. Several centres are also said to allow boys and girls to share the same poorly ventilated rooms.
There have also been some questions as to whether such centres should be based in residential buildings. According to a Mr Hu, a resident of Shenzhen, one of his neighbours runs a child-care centre in his apartment block, something that has occasioned a number of complaints regarding noise. The lift facilities are also said to be inadequate for the number of students attending, while it is unclear if the centre complies with local fire regulations.
In view of the widespread use of after-school care facilities, several local authorities have introduced their own regulatory requirements. In Zhejiang province, for instance, the kitchens in such establishments must comply with the food-safety requirements that govern restaurants and canteens.
Authorities in Hubei province have published guidelines that businesses launching on-campus after-school care services for primary school pupils must comply with, while in Fujian province, a training facility for child-care professionals has been established. Hunan province, however, has introduced the most draconian measures, having made moves to close down all of the unregistered operators in the sector. In general, all of these moves have been welcomed by the more serious players in the sector, with many believing that such legislation is necessary in order to ensure that the after-school care industry has a credible and sustainable future.
Xing Bin, Special Correspondent, Guangzhou