China’s largest private education company, New Oriental Education & Technology Group, has set up a subsidiary to offer wine and alcoholic beverages, as it tries to diversify its services, after the publicly listed company became the largest casualty in China’s private tutoring overhaul.
The tutoring company which offers a wide range of education services saw its shares plunging by over 90% after China’s cabinet, The State Council, announced a basket of regulations that effectively ended the country’s US$100 billion private tutoring industry.
The jarring education regulations would request all private education companies to be registered as non-profit entities and banned formations of any new for-profit education companies and foreign investment in such companies.
According to Chinese media reports, the new company set up by New Oriental has an initial capital injection of RMB 10 million (US$1.56 million) and will be offering services from crop seeds, food to alcoholic beverage and broadcasting.
This came two months after the company made an announcement that it will pivot and diversity its services other than education. “We will keep operating businesses that are not related to basic education and focus our resources on other educational products and services,” the company said back in August.
In the same month, Wall Street English, one of the world’s largest English-tutoring firms, with about 3 million alumni and annual enrolments of roughly 180,000 students – filed for bankruptcy following the drastic education crackdown.
Meanwhile, in wine education sector, WSET, the world’s biggest wine and spirits education provider, is still waiting for its operation to resume in mainland China, after the country suspended its operation over its NGO status.
The exclusion in the Chinese market has downgraded China to its fourth biggest market for WSET.