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What is the most recent global market size for test-prep education?
According to a July 2017 article in The Journal, research company Technavio estimated that the 2016 global market size for test preparation was $24.57 billion (USD). Regionally, growth in the market is driven by Asian test prep companies, while in terms of platforms, the online test prep market is helping to drive global growth. Other factors influencing the market include increased K-12 benchmark testing in the US, increasing low or no cost options, and increases in post-secondary school enrollments in the US and China.
REGIONAL MARKETS
While, according to a 2016 report, the US test prep market is predicted to have a reasonable 3% CAGR through 2020, with a 2016 value of $328 million, Asian markets are expected to fare much better. According to a 2017 Technavio report, China's market can expect a 2017-2021 CAGR in excess of 15%, while finance and education expert Nikhil Mahajan, speaking in an April 2016 interview, stated that India's test prep market size had reached Rs.378 billion, or $5.961 billion (USD) by 2015-2016, on the strength of a 14% CAGR since 2008-2009.
PLATFORMS
The shift to online options has also impacted the test preparation market. Both the SAT and ACT now offer online test prep in partnership with Khan Academy and Kaplan respectively. Differences in platform preferences between K-12 and post-secondary help to drive growth in online test prep, with parents of K-12 students having more interest in and more willingness to pay for in-person prep for their children, while adult post-secondary and post-graduate students, who are more likely to pay for their own prep, are more likely to prefer online prep. The largest share of the test prep market is made up of the post-secondary test-takers who prefer online options; in China, post-secondary test prep reached nearly 65% of 2015 test prep revenues, and in the US, the segment is expected to account for 67% of the market by 2020. This growth in the segment of customers most interested in online options may explain why the self-paced online test prep segment is predicted to have a 7.82% global CAGR from 2017 through 2021.
OTHER MARKET TRENDS
In the US, the increase in benchmark testing for K-12 students has led to a corresponding growth in the test prep market for these tests. In India and China, increases in the economic status of individuals and families may help spur growth. In the US, the college-age population is increasing, and college entrance is increasing in China as well. Low-cost and free options have also impacted the market, while according to statistics from FairTest published in May 2017, there were "950 colleges and universities in the United States that no longer require test scores for admission." This is a small number compared to the total test-prep market, with US GED students alone amounting to 800,000 in 2016, but if the idea of abandoning admission tests were to take hold, the outlook for the market could become less impressive.
CONCLUSION
With a current market size of $24.57 billion (USD) in 2016, and an expected size of $32.13 billion by 2021, the global test prep market size is expected to continue to grow, driven regionally by strong Asian markets, and by the increase in online options, including self-paced prep, and growth in the post-secondary segment.