[AI Era Education Industry] Connecting ChatGPT with Education... Giving the 'Red Pen' to AI Hands

① Kyowon Group Enters 1 Trillion Won Club First in Education Industry
Started Edutech Business in 2015 with 'Smart Red Pen'
Built Data Integration Platform...Providing Personalized Learning

Editor's NoteThe education industry is fiercely competing amid the wave of change collectively referred to as 'Edutech.' Edutech is a combination of education and technology, referring to education that utilizes big data, artificial intelligence (AI), and more. Traditional education companies, which grew centered on workbooks, are pouring company-wide efforts into digital transformation using the know-how they have accumulated. Emerging edutech companies are threatening existing firms with their innovative technological capabilities. We examined what changes education companies are pursuing in the edutech era.

Kyowon Group headquarters located in Jung-gu, Seoul.

Kyowon is a strong player in the education industry that grew through traditional workbook businesses and was the first in the education sector to join the ‘1 trillion won club.’ Since 2015, it took its first step into edutech by launching the ‘Smart Red Pen,’ which combines paper workbooks with tablet PCs. This service provides various educational content through a dedicated smart pen and tablet PC while preserving the advantages unique to workbooks, such as one-on-one student management. It was completed over six years by consolidating Kyowon’s 30 years of educational know-how, about 200 professionals, and 70 billion won in research and development (R&D) expenses.

The edutech service introduced by Kyowon soon led the change in learning methods. Parents, who were anxious about their children holding tablet PCs rather than paper books, gradually changed their perceptions. This change was possible because of a solid visiting sales organization built through workbook brands like Red Pen and Kumon. Other education companies benchmarking Kyowon also began to introduce digital educational devices one after another. Now, it is an era where learning through IT devices such as smartphones or tablet PCs is more familiar.

Before COVID-19, edutech in the education industry was not as comprehensive a concept encompassing AI or big data as it is now. It was a form of education slightly more advanced than ‘e-learning,’ which simply converted offline educational content into digital or online formats. However, with the rapid wave of the Fourth Industrial Revolution technologies such as AI, big data, metaverse (extended virtual worlds), augmented reality (AR), and virtual reality (VR), combined with the impact of COVID-19, the scope and market size of edutech expanded. Edutech, once just a form of educational service, has now rapidly emerged as a core industry shaking up education. The Korea Edutech Industry Association projected that the domestic edutech market size will grow from 7.325 trillion won in 2021 to 9.9833 trillion won by 2025.

Jang Pyung-soon, Chairman of Kyowon Group.

Kyowon responded by launching various edutech services such as ‘I Can Do’ and ‘Smart Kumon N.’ However, due to a declining school-age population and increasing competitors, profitability deterioration was unavoidable. Operating profit in the education business division, which reached 87.5 billion won in 2019 before COVID-19, dropped to 18 billion won last year, a reduction to one-fifth. During the same period, sales showed little change, from 1.0673 trillion won to 1.0037 trillion won, but there is a possibility that Kyowon may exit the education industry’s exclusive ‘1 trillion won club,’ which had been its pride. Meanwhile, Woongjin ThinkBig, the industry’s second-largest player, is aiming to join the 1 trillion won club this year.

Feeling a sense of crisis, Kyowon embarked on a large-scale organizational reform. In 2020, it established the ‘Technology Innovation Center,’ which serves as the control tower for digital strategy within the group, and is promoting company-wide digital transformation. It is also undertaking various data-related projects such as AI and big data. Kyowon plans to build an ‘Integrated Customer Data Platform’ that consolidates customer data scattered across multiple affiliates. The strategy is to strengthen data connectivity across all business areas and to collect and analyze customer feedback left on social networking services (SNS) and blogs, reflecting customer experience as much as possible from product planning to development and marketing.

Kyowon is also actively strengthening its edutech competitiveness. Having invested 40 billion won in edutech R&D last year, Kyowon increased this to 50 billion won this year. It plans to provide hyper-personalized learning services tailored to each student’s ability by integrating the globally trending generative AI with existing educational products. Currently, it is conducting a proof of concept (PoC) to link ‘ChatGPT’ with its edutech products.

Kyowon is exploring ways to utilize the metaverse for learning and work. Recently, through a business agreement with Zigbang, Kyowon decided to jointly develop a cooperation model that builds a learning center within the metaverse and supports remote work. A Kyowon official said, “We will pursue innovation in each business area through the development of next-generation AI-based services and the expansion of digital customer experiences,” adding, “We will continuously create new customer value.”

In addition to the education business, Kyowon is focusing on business diversification through subsidiaries such as Kyowon Tour, Kyowon Wells, and Kyowon Life, covering travel, rental, and funeral services. In May, Kyowon launched the funeral specialist brand ‘Kyowon Yeum,’ and on the 10th of last month, it released the comprehensive funeral platform ‘Cheotjang,’ strengthening its funeral business. With increasing demand for professional funeral services due to aging and nuclear families, Kyowon plans to expand its business accordingly.

'Smart Hwasang Land', an integrated video service provided by Kyowon Edu's leading Edutech brands.