Like millions of Chinese university students, Li Hao has enrolled in all kinds of traditional tutoring classes to sharpen his English skills during vacations. But not this summer.

Li registered for online courses to prepare for a TOEFL exam. "Going online means a flexible schedule, affordable price and more options," Li says.

Like a growing number of young Chinese, he is eschewing the rigid teaching style, fixed schedules and costs of bricks-and-mortar tuition in favor of massive open online courses (MOOCs).

Over the past decade, soaring office rents and labor costs have challenged the traditional education model. Diverse learning needs, including smaller class sizes and tailored services, have propped up the online education industry.

China's education market will transform in the next three to five years, with "40 percent online and 60 percent offline," forecasts Yu Minhong, CEO of New Oriental Education & Technology Group (NOETG), a listed education company.

Meanwhile, the government is building the Open University of China, enabling students to earn qualifications online, and the Ministry of Education is asking key universities to offer MOOCs supported by subsidies under the National Outline for Medium and Long-term Education Reform and Development (2010-2020).

According to the Report on the Diversification of China' s Education Industry 2014 issued by Deloitte, China has seen 2.3 online education startups spring up every day in the year to the end of March 2014 and the market was worth 80 billion yuan last year.

Since 2012, overseas online education providers, including Coursera, Udacity and Lynda, have gained momentum in China, while domestic platforms like Netease Open Courses, Duobei.com and SmartStudy.com have jumped on the bandwagon.

Wei Xiaoliang worked as a tutor and a course manager in NOETG for nine years. In 2014, he created SmartStudy.com and 20 expert tutors left NOETG and joined his company within a month. Li Hao was a student and keen fan of Wei's courses in NOETG and enrolled in his online TOEFL Speaking and Writing Courses on SmartStudy.com.

Li Hao goes to SmartStudy's O2O learning center in Beijing. "I think it's better than facing a computer alone at home. The teaching supervisor follows my learning schedule and guides me," Li says.

Wei believes online education is more than a simple online course. "When students come to the learning center, teaching supervisors arrange the schedule and chart their learning progress. Online and offline is cohesively intertwined," Wei says.

"It's like going to the gym. Some are fine with self-training; others need a trainer. Some are more social, and can learn within a pair or group; others are more independent, so they only need the Internet access at home."

China's three Internet giants - Baidu, Alibaba and Tencent - have all made major investments in online education since 2014.

In September last year, SmartStudy.com announced that Baidu had invested 10.6 million US dollars in its A round of financing, putting SmartStudy's estimated value at 100 million US dollars, a record for an online education start up in China.

Alibaba has opened its own online education platform, Xue.taobao.com. Taobao students can watch the live courses or videos with their own accounts.

One of the most popular courses is a Keynote skill course taught by Xu Cen. It now has more than 100,000 hits online.

"Online learning is really convenient, but putting videos of traditional classes on the web is common and should not be called online education," Xu Cen says.

Xu majored in recording and film-making in college, and has many skills that other Internet tutors lack. His courses are like movies - with a rhythm and a storyline.

"Online courses require better presentation. Only courses with quality content, good presentation and excellent promotion are received well," says Xu.

Unlike students in a traditional class, online students will stop learning at any time if they tire of a course.

Xu is proud of his course quality. A recently released guitar course sold 1,000 copies on the first release day.

More Chinese want to learn practical skills like cooking and car maintenance, and prefer more flexible online learning over traditional study.

"Many laymen investors are now eying the education industry, but online education is quite unlike the e-commerce of a decade ago," Wei says. "The latter is a trade platform and the former is a vertical field. It's a challenge to change people's learning habits."

Despite the growing demand, many online schools find it hard to recruit students. One big problem is that online education lacks innovative or original content, leading to piracy. Xu Cen turned to Taobao for help to combat the piracy of his courses, but received no satisfactory answers.

The lack of tutors is also a bottleneck. Xu wants to gather as many good tutors as possible and produce only quality courses.

Wei values teaching and research as the core of developing online education but "better Internet technology and product design would add color to facts and better present quality teaching materials."

"The biggest difference between the online and traditional courses is the former is an interactive learning process based on quality content, research and behavior analysis," Wei says.

SmartStudy.com spends 30 percent of its resources on research and development.

A wearable device to assist online learning could be a reality in two and a half years. "For instance, if you put on a helmet, two people in different regions can communicate. If you are in Beijing, you would see a teacher in Los Angles writing on a board," Wei says.

"Not every Chinese finds online education their cup of tea, but more are showing their enthusiasm," Wei says. "Most of our clients are students and professionals aged 15 to 30. They represent the future. With the market being evermore standardized, learning habits and attitudes are also changing."