The move, though in its early stages, will give IDP direct access to the IELTS market in China, valued at $380 million, 40% of the global IELTS market worth $1bn.
“We undertook a strategic review of the mainland China market. We’ve been looking at the market for some time, and we believe the time is right to alter our approach to that market.
“We always saw our absence from that market from an IELTS testing perspective as a gap in our coverage,” said IDP CEO and director Tennealle O’Shannessy, in a company 2024 annual earnings call on August 29.
While noting that the expansion was still in its “early days”, O’Shannessy highlighted the size of the Chinese market – the largest globally – and the benefit of diversifying IDP’s global IELTS business away from India, which is experiencing greater volatility caused by regulatory changes worldwide.
IDP is expected to be operational in China by the second half of 2025 and its market entry is predicted to increase the company’s earnings by an average of 5% from 2026-2028, according to a report by Morgan Stanley.
IELTS’ vast global operations are carried out by a collaborative partnership between the British Council, IDP and Cambridge English, with each organisation holding an equal one-third share.
Up until now, IDP has held an agreement with BC, which has historically been responsible for all aspects of marketing and distribution of the test in China, with IDP receiving a royalty fee, paid on per test basis.
IDP recently announced it won’t be renewing the agreement, meaning it will no longer receive the royalties but is free to distribute the test in China, competing against BC as it does in most global markets.
According to O’Shannessy, the move is driven by IDP’s “strategic objective of expanding our geographic presence by reaching more people in more places”.
While the IELTS China market carries an estimated value of $380m and delivers approximately 850,000 tests annually, India’s market (for which IDP is the sole operator) is currently valued by Morgan Stanley at $200m.
“If the 850,000 number is accurate, China represents about 50% of all IELTS testing done by the British Council, as their most recent annual report noted the delivery of 1.8 million tests. This means that competition in this key market could have a significant impact on the British Council,” SELT expert Michael Goodine wrote on LinkedIn.
We always saw our absence from that market from an IELTS testing perspective as a gap in our coverage
Tennealle O’Shannessy, IDP
Additionally, China is experiencing a lesser impact from regulatory changes in Australia, the UK and Canada than India where there has been greater scrutiny and student visa denials.
From January to June 2024, visa approval ratings in Australia were down by 14% and 51% for China and India respectively, with the UK seeing aa 15% reduction in visas for Chinese students, compared to 28% in India.
In Canada, China’s visa approval rates last year were +20% for China and +5% for India, according to the report.
By 2028, Morgan Stanley estimated that IDP will have a 40% share of IELTS in China, where it is planning to outsource its testing network to an established testing operator, with marketing and examiners arranged by IDP.
Such a model will speed up IDP’s entry in China and make it “capital light”, said Morgan Stanley, stating that the undisclosed partner is a “reputable operator with an already well-established geographic presence”.
IDP’s expansion comes after the UK Home Office announced plans earlier this year to overhaul the SELT market, moving away from the current model based on multiple providers to a dedicated Home Offices test (HOELT) developed by one supplier.
“If done quickly, the establishment of the establishment of a test centre network across China would give IDP a truly global presence and could cement their place as a frontrunner to win the second lot (delivery) for the new HOELT test,” said Goodine.
Currently, British Council and TOEFL (ETS) have an estimated 100 testing centres in China, with Pearson PTE running approximately 40.
Given British Council’s 20+ years in the market, “a lot of the heavy lifting on brand investment has already been done by BC” and IELTS is positioned as the number one English language test in China, further easing IDP’s entry into the market.
