Since the pandemic, China has experienced a surge in new study abroad companies, particularly in Tier 2 and Tier 3 cities. Consultancies such as Bonard and Sunrise have each confirmed a notable increase in new agency incorporation these past several years.
However, the total number of students has not recovered as expected post-Covid. This, coupled with the emergence of international education programs in the market, such as foundation courses and 2+2 programs in the public and private sector, has meant that many established study abroad agents are struggling to survive due to rising management costs.
Consequently, the market looks challenging, increasing the difficulty of student recruitment for foreign institutions that traditionally rely on agencies.
Challenges for established agencies
This rapid market expansion has presented challenges for even well-established agencies. Many are struggling to adapt to the changing dynamics. For instance, a prominent agency reported that many of their counsellors are earning minimal salaries due to declining client numbers and difficulties in securing new business. This highlights the increasing pressure on agencies to remain competitive in this rapidly evolving market.
Fundamentally, the challenges for established agencies arise from cost and revenue pressures. Costs include tax, venue, human resources, and promotions, with human resources and promotion being the most critical.
Agencies need professional personnel to maintain service standards and capacity in the labour-intensive study abroad industry. Promotion methods have changed rapidly in the past five years. Social media platforms and short-form video platforms have gained prominence, often becoming more important than search engines and other traditional methods.
Fundamentally, the challenges for established agencies arise from cost and revenue pressure
Furthermore, these new marketing channels tend to favour personal profiles over organisational accounts. This is largely due to the platforms’ recommendation algorithms. Moreover, many counsellors are not comfortable appearing on camera, despite possessing extensive experience and professional knowledge, they lack the skills and topics to capture audience attention.
On the revenue side, acquiring customers is even more difficult than in the pre-Covid period. Customers are becoming more price-sensitive and are increasingly willing to work with smaller study abroad studios for personalised services.
The impact of enhanced information accessibility
The rise of digital platforms has fundamentally altered the information landscape for prospective students. With readily available information on social media platforms such as WeChat, Redbook, and TikTok, students and parents are now empowered to conduct independent research on universities, read reviews, and even connect with current students.
This increased access to information has lessened the reliance on traditional agency channels. In some cases, agents also find themselves competing with university marketing and recruitment teams who support students directly.
The rise of master agents and aggregators
In response to these market shifts, many established agencies have transitioned to the “master agent” or “aggregator” model. This involves acting as intermediaries between universities and smaller agencies, facilitating student recruitment while generating additional revenue streams. However, this model presents challenges for universities, particularly those with lower rankings.
Mingze Sang clarifies” “I would refer to aggregators as international university resource-holders or platforms.” Aggregators have existed in China for a while. However, the “risen” aggregators are often new agencies with strong connections to some foreign educators, enabling them to offer special programs. Some aggregators take the stance: “Every university is welcome on my platform. It’s up to you whether you can attract students.”
The number of agencies and agents is increasing, while the number of students is not growing at the same rate. Therefore, the market is transforming into a resource-driven one.
Aggregators have existed in China for a while. However, the “risen” aggregators are often new agencies with strong connections to some foreign educators, enabling them to offer special programs
Currently, many parents and students in China are seeking the best outcomes with the least investment. Consequently, those with strong connections to well-ranking universities and who can provide special programs to students are highly sought after. Regarding the traditional aggregators in China, who have been present for at least 15 years, the competition is even more fierce than among agencies. They are struggling with issues such as commission percentages and counselling services, and are focused on survival rather than growth.
Evolving student and parent priorities
The priorities of Chinese students and parents have also undergone significant evolution. While university rankings were once the primary determinant, factors such as career prospects, student experience, and the quality of life in the chosen city are now gaining greater importance. This necessitates a more nuanced and student-centric approach to recruitment.
Sang observes that the priorities of parents and students are employment after graduation. University rankings remain a key factor influencing their employment decisions. With foreign enterprises departing China and private companies facing challenges, parents often favour employers “in the system,” such as state-owned enterprises, hospitals, and universities. University ranking is crucial for standing out in a competitive job market. Furthermore, parents increasingly inquire about graduation requirements and the difficulty level of graduation.
Student motivations
Economic factors are influencing student choices in China. Post-Covid economic challenges have increased demand for international courses offered locally. These programs, offering global qualifications without the necessity of overseas travel, are attractive to many. Transnational education (TNE) programs are becoming more selective, enhancing their reputation and attracting students seeking high-quality international education experiences.
As Sang notes: “Excellent students are seeking top universities with specialised majors. Average students are seeking top universities regardless of majors. Below average students are seeking degrees, prefer to go abroad as late as possible, and desire special, safe, and affordable services.”
How universities can navigate the market
Foreign institutions hoping to maintain a strong presence in China must evolve with the market. The traditional reliance on agencies is no longer sufficient. Instead, universities must:
- Explore new opportunities beyond agency recruitment, diversifying their approach to attract Chinese students through multiple channels.
- Invest in TNE partnerships, including 2+2 programs, foundation courses, and collaborations with Chinese universities, which provide direct access to students without heavy reliance on agencies.
- Develop strong institutional collaborations with international schools in China, positioning themselves as trusted higher education pathways for students already enrolled in globally focused secondary education.
- Leverage digital spaces effectively by producing compelling, authentic content that speaks directly to students and parents.
- Enhance student experiences to attract and retain international talent.
- Embrace innovation through virtual campus tours, interactive Q&A sessions, and personalised communication.
Sang concludes: “For those well-ranking universities, such as the Australian Group of Eight, focus on ranking, maintain reasonable commissions, and be strict on graduation but not overly harsh on enrolment.
“For those lower-ranking universities, spend more time engaging with Chinese colleges and universities; as there are thousands of them in China, be flexible when dealing with universities, and rely on a bit of luck.”
