Taiwan Today

"Mom, I've earned 10 BabyBucks!" says a boy who has just finished his "work," milking a model cow. There are 11 children working hard to milk two such cows under the guidance of a "Big Sister," a staff member supervising the activity. Children who complete their jobs receive 10 BabyBucks, a virtual currency used at BabyBoss City, an indoor education and entertainment center and Taiwan's only child-sized "real city."

The city covers an area of 7,603 square meters, taking up the whole seventh floor of a shopping mall in eastern Taipei. It has some 50 pavilions offering 70 occupations for children aged 3 to 15 to experience and learn more about adult work. Since it officially opened in 2008, the center has attracted more than 600,000 visitors, including more than 1,000 school groups as well as some 30,000 "VIP" members, with membership rising by some hundreds every day.

For visitors, BabyBoss and other progressive teaching facilities offer a new model of child-centered learning that combines education and games to help children gain a deeper understanding of adult life as well as stimulate their imagination about their futures. It is also an example of the growing industry of "edutainment"--businesses based on educating children through a wide range of entertaining games, music, storytelling, hands-on activities and even magic shows. Given the response to such businesses so far, both parents and children seem to love the idea.

In 2008, the under-12 population in Taiwan was 3.2 million, a nearly 16 percent decrease from five years earlier. Nevertheless, the market for goods and services targeting children was estimated at NT$320 billion (US$10.2 billion) that year, according to the Directorate-General of Budget, Accounting and Statistics. A survey of 3,347 people conducted by Business Weekly in 2008 shows 34 percent of parents in Taiwan spend at least one third of the family income on their children. In addition, more than 70 percent of interviewees said that exploring their child's potential and language learning are what they are willing to spend the most money on. That means not only is children's education a burgeoning industry in general, but businesses that can both educate and entertain young clients in particular stand to reap big rewards.

BabyBoss general manager Lin Mei-fang says parent company Taiwan SECOM Group saw a business opportunity in setting up the children's venue, as there were no such edutainment centers for children aged 3 to 15 living in Taipei. Taiwan's outdoor theme parks are too far from the urban center and have only simple facilities for children, she says. After evaluating the potential market, SECOM invested some NT$400 million (US$12.18 million) and one year setting up the city, including spending on its realistic facilities and personnel training.

Those cows in the "Kuang Chuan Dairy Farm," for example, not only secrete milk, but also moo when touched on their bellies. A child-sized airplane, provided for would-be flight attendants and pilots, cost around NT$4 million (US$122,000) to build. Lin emphasizes that the investment in facilities is to let parents know that "BabyBoss is not a theme park, but a fun place that has a lot of educational ideas behind the scenes."

Three-Year-Old Clerks

"It's our principle to teach children according to their aptitude," says Sunny Chen, advertising and promotion manager for BabyBoss. "The lessons we give to children are adjustable depending on their ages and abilities." Three-year-old clerks in the convenience store, for example, are shown how to arrange merchandise. Older participants can learn how to check for expired products or operate the cash register.

Moreover, before starting their work, children are taught the complete process of the job and acquire a basic understanding of the industry to which it belongs. "What they learn in BabyBoss can help to compensate for the insufficiency of formal school education," Lin Mei-fang explains. Schools focus on knowledge such as Chinese, geography and history, while BabyBoss helps them broaden their horizons, she says.

Children who choose to be a dairy farm operator, for example, learn that milk purification is a necessary step before the product is sold and drunk. They also know how to milk a cow in the correct manner. "It's impossible to learn these things from any course in Taiwan's schools," the general manager says.

Zhu Guang-juan, a teacher in the Department of Education at National Taipei University of Education, says the hands-on activities at BabyBoss help children realize where money comes from and teach them that one earns a salary "only if you work." Also, children learn to cooperate with others through play, especially for activities in which larger groups of participants have to work together, she says. The "builders," for example, have to pave roads together.

Zhu says she also visits the center with her university students to let them observe the ways in which children learn through play. "The visits are to let my students see how kids can be educated through games," she says.

Wang Yin-chen, a mother visiting BabyBoss with her son, says her child now realizes the meaning of working hard to make money after a busy day at the center. She also praises the high quality of its facilities, saying it is well worth a visit.

Those visits are not cheap compared with many other local children's venues, however. Some parents have criticized the admission fee starting at NT$900 (US$26) per child on weekdays and NT$500 (US$15) per adult to NT$1,100 (US$32) per child on Sundays and holidays. Since the economic downturn began last September though, BabyBoss has launched a VIP card that offers preferential prices to members. The company also gives discounts on group tickets for kindergarten and elementary school students on weekdays to boost attendance during those times.

Fresh Activities

Nevertheless, general manager Lin says BabyBoss is not targeting high-income families, but, rather, parents who agree with its educational ideas. In fact, as Taiwan is a competitive market, Lin says the company's strategy is to give customers reasons to keep coming back. "Customers feel fresh activities are key," she says. Four times a year, the exhibits are reevaluated, less popular pavilions are eliminated and new ones are added, often depending on corporate sponsorship or upcoming cultural celebrations. For example, Santa Claus replaces delivery staff during Christmas time. This approach, along with the high quality facilities and education-based activities, contribute to an average 70 percent customer return rate, she says.

Jia Yong-jie, a mother of two, says that her daughters wanted to play other roles at BabyBoss, so they have visited three times. "If there are new pavilions established, I would like to bring them back again," she adds.

Aside from ticket sales, corporate sponsorship is a major source of income, with a sponsorship fee of NT$6.5 million (US$191,000) per corporation per year. In addition to funding, sponsors also provide know-how and instruction for the center's staff, who must take a one-month training course including interning on a pavilion before they can begin employment as an activity supervisor.

In turn, the center is also a platform for brand marketing. Sony Corp., a sponsor of both BabyBoss and Kidzania, a similar children's venue in Japan, views both places as combining the trends of experiential marketing and children's marketing, according to Tsai Yi-lin, brand and public affairs assistant manager of Sony Taiwan Ltd. "We aim to let our consumers experience the value behind our brand, not promote individual products," she says.

Other sponsors include multinational enterprises such as Coca-Cola Co. and the Royal Bank of Scotland, as well as local brands including Kuang Chuan Dairy Co., TransAsia Airways and I-mei Foods Co. Ltd., one of the biggest food companies in Taiwan. Only one sponsor is allowed from each industry sector.

Developing marketing channels through co-branding is the next step for this growing edutainment venue. After becoming a corporate sponsor in February, the well-known snack producer Kuei Kuei recently launched new packaging for its products that includes the BabyBoss logo, a first for the food company in its more than 40-year history. New packaging is also planned for ice-cream maker Duroyal with items featuring the BabyBoss image scheduled for release at the end of April this year.

Power of Stories

"Can a mountain have a baby? No, but, this mountain did. The baby wasn't a boy or girl. The baby was a monkey." As the host speaks the words, an animated monkey suddenly jumps onto a projection screen. Now with all the children's attention, the storyteller suddenly dons a monkey hat from out of nowhere. This is a small room full of laughing children, and Jeremy Lee Monk, the host and CEO of the story house My Story Island, is telling the traditional Chinese story Journey to the West. As the story continues, Monk changes his costumes from that of a monkey to a monk and even Buddha, and the laughter never stops.

My Story Island might operate on a smaller scale than the multimillion-dollar micro-city that makes up the BabyBoss complex, but it shares many of the same core values of making learning an enjoyable experience by engaging children in the process. "As a frontrunner in children's edutainment, we make every effort to make learning fun," Monk says.

That sense of fun starts with the venue's décor, which is designed to appeal to young visitors. On walking into the story house, located in downtown Taipei, colorful wall art and a giant-sized book hanging from the ceiling burst into sight. The front counter is shaped like a rabbit with a big pink nose, and a pig painted on the wall is actually a child-sized door.

There are three performance rooms, which host different kinds of activities aimed at different age groups. Shows in the Circus Tales room combine English stories, computer animation and magic, while hand-made animal-shaped chairs provide the seating for the room. The Magic room targets 2 to 5-year-olds, and shows feature physical movements along with the stories and hands-on activities afterwards. Host Sara Vittrer, for example, who is also a yoga teacher, incorporates yoga for children into her performances. Children who hear the story "The Wish Doll" work with the host in producing crafts after the end of the story while also learning about different colors. In the Sky Castle room, performances include musical instruments, with children playing interactive musical games during stories.

The production of a show takes around two months and only three shows can be created at a time. The birth of a new story needs the cooperation of a wide range of creative individuals starting with artists designing the visuals for all the characters, writers creating original story ideas, animators and finally producers writing the scripts.

After the arts content is ready, it takes another month to train the hosts, with the storytellers receiving instruction in how to interact with children. Yoga teacher Vittrer says she received training in how to communicate with young children and incorporate different movements into the process of storytelling from CEO Monk and another trainer, Chocolate Lin. "We need to make sure that they know how to get kids involved and attract them," Monk says.

Performances at My Story Island are based around four "themes" per year, with each theme including 12 shows, resulting in a mix of old and new shows each month. "People see the quality," Monk explains. "This is why audiences keep coming back."

Currently, the magic of this kind of storytelling attracts an average of 800 to 1,000 visitors a month to the venue, he says. On a recent visit, the staff point out one 3-year-old girl, who had seen the same story seven times. Monk says, as the sole English-speaking story house in Taiwan, the amusing elements such as music and magic are added because the principle is to let children know "English is fun."

Moreover, the performance house pays close attention to the content of its stories, with Monk saying children can learn valuable lessons through the tales. "Since the beginning of time, all countries around the world have used stories to teach kids," such as the legends told by indigenous people, he says. My Story Island's production of Jack and the Beanstalk, for example, cautions audience members not to be greedy or they may face the same consequences as Jack, Monk says. "Show it in stories and kids understand why that is bad behavior," he says.

Parents also appreciate this educational aspect of the stories. "Children not only hear stories but also learn something new in each story," says mother Xiao Zhi-ling. She cites the story house's performance of Cinderella, saying it teaches children how to read a clock.

Given these factors, the gloomy economy has not impacted the story house too much. Monk says that the company's average monthly income is around NT$400,000 (US$11,764) excluding outside shows. Last December saw the second best month since My Story Island opened in 2006. According to former marketing manager Maggie Yeh, revenue even rose 30 percent after the story house launched a promotion this January by offering 30 tickets for NT$6,000 (US$176), much cheaper than regular price of NT$500 per ticket. "Consumers who buy tickets feel it's worth it and special," Monk explains.

The performance house also offers outside shows in both English and Chinese at NT$30,000 (US$882) per English show, with such shows contributing some 20 percent of the firm's total income. Yeh says many enterprises, including department stores and several insurance companies, invite My Story Island to perform at their activities because other entertainers sometimes include too much product placement. Plus, the story house's productions have the ability to hold the attention of hundreds of people, she says. Prudential Assurance Company is one such company, choosing the story house to host 33 shows around Taiwan in 2007 for its family days.

Entertaining English

While BabyBoss and My Story Island represent opportunities for new kinds of businesses, at least one company is seeking to apply the new style of edutainment to one of the mainstays of children's private education; English-language learning.

Despite the declining birth rate, children's English-language teaching still seems to be a promising business opportunity. Between 2006 and 2008, the number of cram schools teaching foreign languages in Taiwan grew by 30 percent, according to statistics from the Ministry of Education, with the market for English learning having an annual turnover of more than NT$20 billion (US$635 million) in 2008. Of that amount, two thirds of the revenue came from classes for children.

"This market is expanding and competitive," says Liang Chih-cheng, chief strategy officer of Giraffe, a leading children's English cram school with 658 licensed franchise schools and an estimated 70,000 pupils across Taiwan.

Liang says they have been asking themselves "What would I want, if I were a child?" since the school's establishment. Therefore, from the decoration of classrooms to teaching materials and methods, Giraffe creates its school environment with children in mind, he says.

For starters, when Giraffe's president George Wei founded the school in 1987, he noticed that the materials used by some of his competitors were often introduced from other countries, and hence, were not always suitable for local students. Therefore, Wei decided his company would design original materials for its schools, edited by education and linguistics professionals, and including everyday language from children's daily lives, such as situations in school and at home. "The content must be related to their life to inspire their interest," Liang says.

Student textbooks also include large illustrations, rhymes and songs and the courses incorporate physical activities and role-playing into the teaching methodology. Revenue from the teaching materials, which are used in all of the company's franchise schools, is now the largest part of the company's income, at approximately 35 percent.

This "all-for-kids" approach has been widely supported by parents, with some of them even becoming franchise school owners. Franchise school operator Hong Xiu-ling says that it was the entertaining teaching materials that attracted her to the idea of opening a Giraffe school in Xihu, Changhua County. "When visiting other cram schools, all I saw was the teachers asking their students to cram for exams," she recalls. "Those kids were punished because they couldn't memorize all the vocabulary." She says Giraffe was an exception, emphasizing "happy learning," which matches her idea that "learning English should not become a terrifying memory for kids."

A mother, Zhang Zi-fang, says her daughter attended two other children's English chain schools, and finally lost interest in learning English because their classes focused on passing exams. Although the girl moved forward through successive levels, she could not memorize the increasing amount of vocabulary and grammar, which became a source of stress for her. "She even lost confidence in having a daily conversation in English with her father," Zhang says. The girl is adapting to classes at Giraffe, however, Zhang says.

In response to the general economic downturn as well as Taiwan's declining birthrate, the school has extended its range of target clients to include junior high students as well as kindergarten students.

Meanwhile, franchise fees from new schools have become a major source of income for the company. Franchisees pay NT$600,000 (US$17,647) for the first year and NT$150,000 (US$4,412) annually after that, making up approximately 30 percent of the company's annual revenue. Liang says the franchise part of the school's business took off unexpectedly about 10 years ago and was "suddenly booming." Last year, Giraffe president Wei decided to use television advertisements for the school's newly launched e-learning system of online review tests, and the number of franchise schools increased even more.

Bringing Out the Best

All three companies believe that the declining birthrate will not influence their businesses too much. They are confident that Taiwanese parents are concerned about their children's education and those who can afford to will continue to support children's businesses.

In fact, for industry giant BabyBoss, general manager Lin Mei-fang says the company is aiming for 25 percent growth in profits this year. "We are not only focusing on Taipei, but also extending our marketing channels and products to every corner of Taiwan," she says.

English-language school Giraffe is also planning to expand into rural areas such as Matsu, Fuxing Township of Taoyuan County and Puli Township of Nantou County. Liang says the school's online learning system can help elementary schoolchildren in remote areas to improve their English and close the gap in resources between rural and urban areas. The offshore islands of Matsu will likely see the first of this expansion as the school has contacted the island's Department of Education officials about the idea and a feasibility study is being conducted.

My Story Island CEO Jeremy Monk says that when the economy goes down, both the best and the cheapest businesses are able to survive. It is clear that he and many other business operators in the growing field of child edutainment are aiming for the premium end of the market, with a strategy firmly aimed at continuing the high quality and keeping learning fun.

Write to Vicky Huang at powery18@mail.gio.gov.tw