English education app testing waters in China

To keep Duolingo a free app, he created a business model to combine language learning and text translation. For example, many of the Spanish learners on Duolingo voluntarily help translate CNN's English news into Spanish as learning practice, and CNN pays Duolingo for these translations.

Rather than monetization, expanding into the potentially huge Chinese market is von Ahn's top priority. The market of online education in China was valued at 83.97 billion yuan ($13.55 billion) in 2013 by iResearch Group, an Internet consulting firm.

Top 8 most influential English training centers

Alibaba taps into language-learning biz

"With the increasing number of Internet users in China and a growing number of them getting used to taking classes online, the number of online learners in China is expected to grow from 67.2 million in 2013 to 120 million in 2017," said Liu Dongmei, an analyst with iResearch.

Liu said the flexibility of being able to learn whenever and wherever one wants is a big reason behind online education's growing popularity in China.

Many of the country's Internet titans, such as Alibaba Group Holding Ltd, and venture capitalists have vigorously invested in online education.

In online English education alone, Duolingo faces at least two huge rivals.

One is Beijing-based New Oriental Education and Tech Group Corp, the No 1 brick-and-mortar English language training provider, which is eager to expand into online education.

The other is Guangzhou-based YY Inc, a leading live video streaming platform in China, which aggressively entered the online English training field earlier this year, announcing it would spend 1 billion yuan over the next two years to offer free basic training sessions for TOEFL (Test of English as a Foreign Language) and IELTS (International English Language Testing Service).

Von Ahn fully appreciates the opportunities and challenges.

But, he said: "There are also difficulties. For example, we need to build relationships with app stores from scratch. And there is the risk that some Chinese company might copy our service and gear it slightly more toward the Chinese market. Then they win.

"But it is not easy to copy our algorithm and our free model," he added, saying he is cautiously optimistic about Duolingo's chances for success in China.