This PIE News article by Polly Nash has a ton of relevant details re: IDP’s move to begin direct testing in China.  It notes:

  1. IELTS testing in China is valued at about $380 million, or about 40% of the global IELTS value.
  2. Morgan Stanley estimates that about 850,000 IELTS tests are taken in China each year.
  3. Morgan Stanley further estimates that IDP could grab 40% of the Chinese IELTS market by 2028.
  4. IDP will outsource test center operation to an established third party.

If the 850,000 number is accurate, China represents about 50% of all IELTS testing done by the British Council, as their most recent annual report noted the delivery of 1.8 million tests.  This means that competition in this key market could have a significant impact on the British Council.

Outsourcing the test centers could be costly in the short term, but I’m sure IDP could supplement a third party network with “self-operated” centers.  That’s something ETS has pursued in China in recent years.

IDP Education shares are trading at $13.45 as I write this.  Shares are down 32% since the beginning of the year, and are down quite a lot more from their pandemic high of $38.88.

It isn’t necessary to describe once again the challenges that IDP faces, as they are already well known. That said, it is worth taking a moment to write about a potential bright spot that hasn’t been sufficiently covered elsewhere.

According to IDP’s most recent annual report, the company plans to begin “direct testing” of IELTS in China in the near future. That is, they plan to take registrations and operate IELTS test centers around the country.

It may come as a surprise to some readers to learn that IDP doesn’t do those things at the present time. Instead, the British Council has a monopoly on IELTS testing in China. Per an agreement between them and IDP, IDP is paid a flat-rate royalty for every administration of the IELTS that is carried out in the country.  I don’t know what that fee is.

In most other countries, IDP and British Council compete with each other when it comes to delivering IELTS (except for India, where IDP has enjoyed a monopoly since buying out the British Council’s operations in 2022).

What makes the move to direct testing particularly exciting is the fact that during peak testing periods, some students find it hard to book spots at IELTS test centers (and TOEFL test centers, for that matter).  According to anecdotal reports that have been shared with me, test takers sometimes resort to paying third parties to quickly to book spots at test centers as soon as they become available.  Other times they travel outside China to take tests.  You’ll recall reports in the Korean press a few months ago about “exam tourism” to that country.  Said the Chosun Daily at that time:

“The British Council, which administers IELTS, noted that they have observed a significant number of Chinese expeditionary candidates coming to Korea recently. Although they do not have statistics sorted by nationality, it is estimated that as many as half of the 30,000 people who take IELTS in Korea annually could be Chinese.”

I’ve been told that Malaysia is a popular destination for Chinese test takers as well.  Before the war, people went as far as Moscow to take tests.

This suggests to me that if IDP enters the market they won’t have any trouble filling seats at test centers.

Beyond that, a few other points are worth mentioning:

  1. Official numbers are not available to me, but I think it’s safe to say that the IELTS is the most popular test of its type in China, having surpassed the TOEFL in total test volume some years ago.  This is mostly because of the rise of Canada and Australia as study destinations, but also because the IELTS is a very attractive test for individuals in China.  The option of taking the IELTS on paper remains quite popular in China, and that’s something that competing testmakers don’t offer.  Test takers are also drawn to the test because of the 19 prep books published by Cambridge Press.  Again, that’s something that competing tests can’t match. People like the IELTS. When IDP enters the market, they will have a customer base that already appreciates their product.
  2. As discussed recently on the ICEF Monitor Podcast, the slowing of economic growth in China, coupled with high youth unemployment, may create opportunities for firms involved in the study abroad business.  Already, we’ve seen that young people in China are more likely than before to stay in school instead of entering the job market right after their undergraduate studies. This may translate into an uptick in individuals considering the option of studying abroad.  Of course, this could create more demand for the IELTS in China, even as demand shrinks in the key market of India. Because of the specific schools Canada-bound students often target, they may be less impacted by regulatory changes than students in other markets.  Again, this could keep demand for the IELTS high.
  3. If done quickly, the establishment of a test center network across China would give IDP a truly global presence, and could cement their place as a frontrunner to win the second lot (delivery) for the new HOELT test.
  4. The cost of taking the IELTS in China from the British Council is about $460 AUD.  According to IDP’s most recent annual report their worldwide average fee is currently $306. Direct testing will certainly increase their average fee.

Anyhow.  All of the above assumes that IDP Education has found a test center partner and have taken care of whatever obligations they might have to the NEEA.  Those two things could, of course, present challenges in the short term.

I urge everyone interested in testing to keep an eye on China.  It’s easy to miss key details since this particular social network isn’t allowed to operate in the country… but it remains critically important to the plans of all the testing firms.  More important than some people might realize!

Below are photos of the endcap displays of TOEFL and IELTS books at the big Kyobo Books location near Seoul City Hall.  Even more books of both types are found on the store’s shelves.  Eagle-eyed readers will spot a mixture of both official and third party publications.

When trying to account for why certain tests are popular in the East Asian market, it is really important to pay attention to the amount of prep materials on the market, especially (but not only) collections of practice tests.

To some extent, here in Korea TOEFL and IELTS have avoided the headwinds they face in other markets because there is such a healthy ecosystem of prep materials available.  The PTE is doing okay here, but it isn’t challenging IELTS to the same extent that it is in India.  Likewise, while the DET has a lot of fans here, it hasn’t supplanted the TOEFL as a test for America-bound students like it has in Europe.

People here want to take tests that they can prepare for on their own.  Young people in Korea spend a lot of time studying for tests, and are pretty good at breaking them down to their component parts and mastering them bit by bit.  But that can only be done when they have access to a ton of super accurate study materials. Reputable third party publishers here are trusted to produce practice tests that are 99% similar to the real thing. That’s one reason why some people here are sticking with the legacy tests.

In markets with less of this sort of stuff, there is less reason to stick with the legacy tests.

In part this explains the high volumes (in Korea) of somewhat older English tests like the G-TELP, TOEIC and OPIc, all of which remain extremely popular in the region.  Surprisingly so.

Test makers should keep this in mind.  They should also remember that the legacy tests can count on third party publishers to crank out a steady stream of materials on their own, but upstarts might have to shoulder some of the burden themselves.

(For the record, I didn’t spot any PTE books and I’m not sure any are available from Korea publishers at all.  I didn’t spot any DET books either, though the influential “Siwon School” company does have a line on the market.)

The Chinese market deserves a post all of its own.  So… I think I’ll save my thoughts on that one for a later date.

IDP Education held its annual general meeting yesterday.  Shares slid 7.44% in response.  Here’s a PDF summary provided by IDP.  Most of the news is old news, previously shared in the annual report published a little while ago.

If you are curious, the precise number of IELTS tests delivered by IDP in FY2024 was 1,584,100, a decline of 18% compared to FY2023.  They report 3.98 million IELTS tests being taken in total.  That seems a bit high, but perhaps the British Council is doing better than I imagine.

Nothing is mentioned in the presentation file about IDP’s plans for direct testing in China, which I am really bullish on.  I think they represent a really fantastic opportunity for IDP and will make life easier for learners in China.  I’ll write more on that topic later, I suppose.

The PIE News has some useful numbers regarding which tests were used by students entering the UK for studies in the 23/24 enrollment cycle.  The numbers come from Enroly, which apparently processes a third of all international student applications for the UK.

It reports that about 65% of students took an English to show they met the language requirements for a student visa.

About 34 percent of students used an IELTS score to meet those requirements.  About 8 percent used a PTE score.  About 10 percent used a score from one of the other SELT tests.  About 13 percent used a score from a non-SELT test.

TOEFL and Duolingo are the biggest non-SELT tests, but there are others.

IRCC has announced that language score requirements will be added to the PGWP application process.  University graduates will need a score equivalent to CLB level 7 and college graduates will need a CLB level 5 equivalent. A list of acceptable tests hasn’t been given, but one imagines that IELTS General, CELPIP and PTE Core scores will be accepted (as they are for PR applications at this time).  In case you are wondering, an IELTS score of 6 is equivalent to CLB level 7.

I’m not sure of the usefulness of this requirement, as most students are required to meet similar requirements while applying to schools in the first place. But including it amongst the announced changes likely helps the minister establish the tone he’s going for.

Note, also, that a PGWP application is usually followed by a PR application, something which requires similar language scores. I suppose students will use the same scores for both applications. This makes the change not a particularly big deal, from my perspective.

In some cases, though, the change could result in students taking similar tests three times – when applying to universities, when applying for a PGWP and when applying for PR.  Test companies must be happy right now.

These Google Trends graphs for the past ten years are mildly interesting. They hint at an increasingly competitive market for English testing in India (but one impacted by forces beyond the control of testing companies). They also hint at a gradual embrace of the IELTS in East Asia markets where the TOEFL has traditionally been the number one test.

Recently I spoke to an ed-tech entrepreneur who had just returned from doing market research in El Salvador. Everyone there told him he needed to ensure that his tech could help students prepare for the TOEFL. I encouraged him to do that as well, but reminded him of trends in the rest of the world.

Michigan Language Assessment  is conducting a concordance study that will compare MET and IELTS (academic) scores.

Individuals who have recently taken the IELTS or will take the IELTS in the near future are invited to apply to join the study.  Those selected for the study may be eligible for a free in-person administration of the MET and/or reimbursement of IELTS test fees.

Best to act quickly, as both tests must be completed before October 25.  Note that only in-person administrations (of both tests) are eligible for the study.

The MET is one of many tests that I’ve been watching from the periphery, but don’t know nearly enough about. I suppose I should add an administration of this test to my queue.

The PIE just published a useful summary of the ownership structure of the IELTS test.  It can sometimes be tricky to wrap one’s head around the ownership of the test, which is shared, equally, between Cambridge English, the British Council (both non-profit organizations) and IDP Education (an Australian for-profit).  Making things even trickier is the fact that the latter two parties compete with each other to deliver the test in some (but not all) markets. One might predict friction between these parties, but they seem to get along pretty well.

As the PIE points out, the British Council may be “the logical choice” to develop the new English test that the Home Office has put out a tender for (currently referred to as the “HOELT” test). This makes sense considering their worldwide network of testing centers, and IELTS’s current status as a market leader.  But since Cambridge is responsible for the design, development and validity research of IELTS test items, perhaps a more likely front-runner is a new partnership between that organization and the British Council. Note also that the tender seems to invite separate bids for the development and delivery of the test, but how that would work in reality isn’t immediately clear.

That said, a question that comes to mind is whether an IELTS-ish test is even desirable. Is it safe to assume that this is what the Home Office is seeking?

Here’s a bit from a review of the IELTS by John Read published in Language Testing back in 2022:

“As its recent history shows, IELTS has been successful in incorporating technical innovations in the delivery of the test and in a whole range of back-office functions that support the industrial scale of its operations. However, in its adherence to design principles dating from the 1980s, it has proven resistant to any fundamental re-thinking of the construct of academic language proficiency in the light of current concerns in the field, such as the renewed focus on integrated tasks, the importance of assessing interactional competence, the value of diagnostic feedback, and the diversity of academic literacies. Although there are numerous IELTS-funded studies by external researchers suggesting ways in which [the] test could be enhanced, there is no sign of an integrated programme of renewal of the test.”

Keep in mind that the review isn’t all bad. But needless to say, a test like the IELTS has pros and cons.

If the Home Office is seeking a more modern approach to testing, perhaps there is an opportunity for a firm already known for producing such products.  That’s a big “if,” of course, but it is worth considering.

Shocking news out of the UK this morning.  The PIE is reporting that the UK Home Office is reconsidering how it handles Secure English Language Testing .  Rather than accepting results from a handful of approved tests, the Home Office is considering instead a single test, owned by the Home Office and designed by one supplier.   Says the PIE:

“The government appears to be planning to move away from the current concession model based on multiple Home Office-approved suppliers, to a dedicated test owned by the Home Office and designed by one supplier.

The service, carrying an estimated contract value of £1.13 billion, will cover the development and ongoing support of a Home Office branded test to be used globally for all HOELTs, and the facilitation of tests around the world.”

Read the whole tender here.

As most readers know, SELT-approved tests are those tests which are approved by the Home Office for visa and citizenship purposes.  They are delivered at test centers that meet the strict security requirements set by the Home Office.  Testing providers must also meet certain post-test requirements.  SELT-status is highly valued in the testing industry.

Within the UK, these tests are currently delivered by the IELTS partnership, Pearson, Trinity College and LanguageCert.  Outside of the UK, tests are delivered by the IELTS partnership, LanguageCert, Pearson and PSI.

The aforementioned change would represent a seismic shift in the language testing world.

A few thoughts and questions come to mind:

  1. It takes a very long time to develop a test.  Many years of research and development are required.  Would a Home Office-owned test end up being a variation of an existing test?
  2. Aside from the above-mentioned organizations, who might be capable of bidding for this tender?  Keep in mind that PSI is a subsidiary of ETS. 
  3. I would like to know more about the financial implications of this change.  How impacted would some of the major testing firms be by the loss of SELT business?  Perhaps some representatives of those firms will chime in. 
  4. Perhaps someone who follows the industry more closely than I do might wager a guess at how likely it is that the Home Office will actually go in this direction.  Obviously it is not set in stone. 
  5. If this change is implemented, will other governments follow suit? 
  6. Regular readers of this space know that I value competition. I feel that testing monopolies can sometimes be bad for test takers.  This change could reduce competition in the testing space. 
  7. I also value accessibility.  Accessibility is impacted by the number of approved test centers available to test takers, and how close they are. This change could reduce the number of test centers available to test takers.

I’ll post more news as it becomes available, obviously.A big thank-you goes to Polly Nash for digging this story up. Apparently the tender was put out during the holiday and went unnoticed by all but her.

Yesterday, IDP Education released its financial report for FY2024.

Regarding the IELTS test, a few things are worth mentioning here.  They are:

  1. IELTS test volumes are down 18% worldwide.
  2. IELTS test volumes are down 42% in India.
  3. Outside of India, things are rosier: IELTS test volumes are up 12%.
  4. IDP says they “expect to record a decline in volumes in [their] key business lines in FY25.”

IDP Education seems pretty determined to convey that IELTS declines are due to regulatory changes in Canada, Australia and the UK.  And that competition from other tests is not a major factor.  I don’t know if I buy that.  I think competition from Pearson and Duolingo is having a serious impact. But I’m just a guy on the Internet.  What do I know?

I listened to the shareholder’s call and about 30 seconds of it really captured my attention.  CEO Tennealle O’Shannessy said:

“We completed a strategic review of the mainland China market. Off the back of that, we are exploring a direct testing model in China. We’re at the early stages of this process, but we believe that over time this will open up additional growth for us as we connect directly with a greater number of test takers and students in China.”

Currently in China, the British Council alone administers the IELTS test (in conjunction with the NEEA, which is part of the Ministry of Education). Based on an agreement between IDP and the British Council, the British Council pays IDP a fee for each IELTS test that is taken in the country. This arrangement dates back to 2001.

What O’Shannessy seems to be suggesting is the  sunsetting of this arrangement in favor of IDP Education directly administering IELTS tests themselves in China.

This could be advantageous for both IDP and test takers. But, as is well known, China can be a tricky place to do business.

The IELTS partnership is picking up the pace! According to a new press release, people who take that test on a computer can now “usually” get their results in 1-2 days. That’s impressive for a test that is graded wholly by humans.

For the record, Pearson says that PTE scores “typically” arrive within two days. Duolingo says that DET scores arrive in two days (and no adverbs are used).

ETS still promises TOEFL scores in 4-8 days. They might have to speed things up in order to remain competitive.