Rising demand for private education in Vietnam

March 28, 2024 | 16:49

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Solid growth in expenditure for education indicates higher awareness and demand, especially for private education, foreign languages, entrance examinations, and extracurricular activities, according to an industry report released by FiinGroup on March 25.

Rising demand for private education in Vietnam

The report points out that Vietnam has favourable demographic factors for education on the back of solid GDP growth, and growing disposable income and household spending. Accordingly, education spending has witnessed solid growth as 47 per cent of household expenditure in major cities. The high school-age population of 24.5 million is forecast to grow by 0.6 per cent until 2030, so the demand for education is surging.

The number of students in private education in Vietnam rose 10.9 per cent from 2017-2022. By 2022, Vietnam had about 510,000 students pursuing general education (K12) and 420 students in higher education.

Annual tuition fees for international schools are around $11,000-30,000, while tuition fees for bilingual school are $4,000-5,000 per year.

"Private education spending is rapidly rising, drawing interest from both domestic and international investors keen on seizing opportunities in this burgeoning market," says FiinGroup. In cities like Hanoi, the presence of international and bilingual schools remains limited, with a penetration rate of only 4 per cent for the 2023-2024 school year, suggesting substantial untapped potential for the private sector. Vinschool dominates, accounting for 28.3 per cent of market share by number of student enrolments at international and bilingual schools in Hanoi.

In light of this potential, foreign investors have actively penetrated Vietnam's market via mergers and acquisitions, green fields, and business collaborations. Some notable deals include KKR's $100 million into EQuest, and Baring Private Equity Asia's (BPEA) acquisition of a majority stake in Vietnam USA Society English Centres.

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