Daekyo Aligns Early Childhood Education to Children's Perspectives Overseas as Well

Daekyo, struggling in the education business sector due to the declining school-age population, is accelerating its efforts to target overseas markets.

Daekyo announced on the 27th that it opened a 'ToniToni' directly operated center in Malaysia this month, following its opening in Hong Kong last June. ToniToni is a specialized brand for infant and toddler play and physical education. In 2022, Daekyo introduced the ToniToni program in the form of educational services at two locations within kids' cafes in Vietnam.

Daekyo, Tnitni Malaysia Directly Managed Center View. (Photo by Daekyo)

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Daekyo is facing difficulties in its core education business due to the domestic decline in the school-age population. The education business, which accounts for 90% of total sales, has seen a decrease in performance, resulting in four consecutive years of operating losses since 2020. Accordingly, the company is focusing on overseas markets where there is high demand for early education and strong trust in the Korean education method.

Although Daekyo began its overseas business in the 1990s, its performance has not been favorable. It entered the overseas market by establishing the local subsidiary 'Daekyo America' in Los Angeles in 1991, and by 2017, the number of overseas subsidiaries had increased to 12. However, even after 10 years of operation, it failed to generate significant profits, and around 2020, it underwent restructuring, reducing the number of overseas subsidiaries to six this year, half of what it was in 2017.

After experiencing ups and downs in its overseas business, Daekyo is challenging itself again to pioneer overseas markets through selection and concentration. The plan is to focus on the Southeast Asian and North American markets, which have high growth potential. Vietnam serves as a forward base for the Southeast Asian market. Daekyo opened the international kindergarten 'Ellis' in Vietnam last April and is planning to expand its Southeast Asian business based on the achievements in the Vietnamese market. The expansion into the Hong Kong and Malaysian markets is also interpreted as reflecting positive results from Vietnam.

A Daekyo official explained, "Despite infant and toddler play and physical education being unfamiliar in Malaysia, there was very high interest in ToniToni, with more than 200 children participating in trial classes."

However, it seems more time is needed before the overseas business can generate substantial results. Overseas business sales in the first half of this year were 8.3 billion KRW, slightly down from 8.8 billion KRW during the same period last year. Last year’s overseas business sales totaled 16.9 billion KRW. The company plans to open a ToniToni directly operated center in the United States within this year and lead its overseas business focusing on profitability.

A Daekyo official said, "We are steadily expanding our overseas business and will rapidly grow mainly in the Southeast Asian and North American markets, which have high growth potential."

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