Japan’s language-related business sales have been on the decline, falling for the fourth straight in year in fiscal 2008, according to a market research firm.
English-language schools, the largest segment of the language market, admit they are hurting from a decline in adult classes and blame the sluggish economy and the fallout from the Nova Corp. bankruptcy.
But they see some hope in the market segment for children, for whom English will become a mandatory subject in two years.
According to Tokyo-based Yano Research Institute Ltd., language-related sales came to ¥767.2 billion in fiscal 2008, a 5.2 percent drop from the previous year.
The foreign-language school market dropped 5.6 percent overall, with sales for adults decreasing 9.1 percent, the market research firm said in a report released last month.
The market for those studying a language as a hobby or for educational purposes declined 17.3 percent, while sales from group lessons went down by 10.9 percent from a year earlier, according to the report.
The only segment that showed an increase among the adult language school market was for one-on-one lessons, which rose 1.6 percent from the previous year.
Susumu Ikegami, a spokesman for Geos Corp., which runs English-language schools in Japan and other countries, said they have been facing a serious decline.
“As the number of students decreased, the number of classrooms also declined,” said Ikegami, who declined to give the figure for the classrooms.
Ikegami said the market’s downward trend began about five years ago, although the reason is hard to pinpoint. However, he pointed out that the bankruptcy of Nova Corp. in October 2007 had some impact.
“Nova, which was the largest language school, caused distrust among the public about English-language schools,” he said.
This view is shared by the Yano report, which says the industry was hit hard by the fall of the largest school in the market.
Another possible factor, Ikegami suggested, is the global economic recession triggered last year by the collapse of Lehman Brothers Holdings Inc.
“Normally we aren’t really influenced by the economy, but this time we may be just trying to put the blame on the recession,” Ikegami said.
Other fields in the language-business market that are suffering are distance education, whose sales have dropped 1.7 percent, and the translation market, which has seen a 4.2 percent fall in sales.
Sales for study abroad services dropped by 13.9 percent.
Yet Masayoshi Kamikawa, director of the Advisory Committee on Studies Abroad, run by United Tours Co., said it actually saw an increase in the business year to September 2008. United Tours is owned by Kinki Nippon Tourist Co.
Kamikawa said the swine flu outbreak has caused the most damage this year, making people reluctant to travel overseas.
Amid the downward trend there are some areas with growing demand, such as early English education for children. English will be a mandatory subject in elementary schools starting in 2011 for fifth- and sixth-graders, or 10- to 12-year-olds, requiring schools to offer 35 periods a year.
Market segments related to children are already showing growth. For instance, the Yano Research report showed that sales in the preschool market and for outplacement services for temporary English teachers increased 8.4 percent and 11.1 percent respectively in 2008 compared with the previous year.
Kazue Kuramoto, sales manager of the temp English teacher service department at Tokyo-based Shane Language Services, said the need for English teachers at kindergartens and child care centers has been growing in recent years.
Shane Language Services, which employs 40 English teachers, dispatches English teachers to companies as well as kindergartens and child care centers.
“Since English education began in elementary schools, mothers of kindergartners are saying they would like to prepare earlier. So, the age is getting younger and younger,” said Kuramoto, adding that lessons for kindergartens have increased.
Kuramoto predicts that the market for dispatching English teachers to kindergartens and child care centers is likely to grow.
However, Ikegami of Geos said the overall outlook for the language-school market in Japan doesn’t appear bright.
“We have 53 schools overseas, and they are doing pretty well. So, while there is the chance of growth from a global outlook, we don’t really have a good picture for the Japanese market. Rather than getting more students, we are working to run the business more economically,” Ikegami said.