My Take

Tutoring in Hong Kong has become a lesson in big business

PUBLISHED : Saturday, 17 October, 2015, 1:29am
UPDATED : Saturday, 17 October, 2015, 1:29am

Who says we don't pay teachers enough? At least when it comes to those private tutorial stars, they are being paid banker-like salaries.

Last week, Modern Education ran an open letter in local newspapers offering Lam Yat-yan, a star tutor at rival Beacon College, HK$85 million if he jumps ship and takes 25,000 students with him.

Now Beacon has filed for an initial public offering. Those rare few who have read its investor prospectus may be struck by one of its many warnings.

"The loss of such a tutor's service to our group may cause a significant reduction in student enrolments and materially and adversely affect our business," it said.

Well, Lam, 28, is Beacon's top tutor and cash cow who singlehandedly made about HK$131 million for the school in the last financial year, equivalent roughly to 40 per cent of its total revenue of HK$328 million. If you ever wonder whether Modern Education's provocative offer of HK$85 million was just attention-seeking, you may think again. Lam, who teaches Chinese, is worth that much. His loss to Beacon would be catastrophic, though so far he said he wouldn't leave.

"An extra HK$50 million, HK$80 million makes no difference to me," he wrote on Facebook.

Modern Education's high-profile move on Beacon is not just about poaching a star employee, but to undermine a key rival's listing ambition. It is truly a nasty business, partly because so much money is at stake. Euromonitor, the market research group, estimates the industry generated revenue of more than HK$1 billion last year. About 180,300 students, mostly from secondary schools, enrol in private tutorial schools.

This parasitic business lives on the inefficiencies of our education system, and preys on the insecurity of young pupils and their parents. The industry's HK$1 billion annual revenue is more than 4 per cent of what the government spends on secondary school education.

Granted, some private tutoring is inevitable. But if our schools and the education system have been working properly, parents shouldn't have to pay a billion a year to get help for their children. Instead, private tutoring has become an escalating arms race among students. That's why it's a great business.