From June 26, students will enter the refund process, and will also provide compensation for the affected employees to leave.
Editor’s note: This article is from Zinc Finance, author Luo Yaying .
On June 22, the Disney English WeChat public account released “A Letter to Disney English Students and Parents.” The letter mentioned that affected by the global epidemic, Disney English will stop online courses from now on and will no longer reopen teaching. From June 26, students will enter the refund process, and will also provide compensation for the affected employees to leave.
After 12 years of sorrowful departure, the official said that the refund will be compensated
It is reported that Disney English is a direct learning and training brand owned by The Walt Disney Company. Its business is mainly to provide special English learning courses for teenagers 2-12 years old. Since entering the Chinese market in 2008, it has 26 stores in 6 cities including Beijing, Shanghai, Guangzhou, Shenzhen, Nanjing and Chengdu.
In January this year, affected by the epidemic, Disney English announced that it would delay the start of classes. From March 19th, free courses will be launched on the Le Xue Xue app for students to learn online.
On June 22, Disney English announced that it would stop teaching online, shut down learning centers nationwide, and then withdrew from the Chinese market. Disney English said it will provide refunds and follow-up processing services for students from June 26 to July 21, and will compensate the employees for leaving the company.
Within one hour after the announcement of the closure of Disney English, its WeChat public account article read more than 100,000, which caused a heated discussion on the Internet. Many parents shouted in the message.
For the final decision to shut down Disney English, Ma Haoshi, executive vice president of consumer products, games and publishing in the Asia-Pacific region of Walt Disney Company, revealed the reason for this in an interview. One is the change in consumer preferences for extracurricular education, and the other is The global epidemic has exacerbated the impact of online education on offline counseling.
Can’t make ends meet: “overwhelming” the straw of Disney English
In recent years, the market for extracurricular English tutoring has developed rapidly. In order to ensure a good learning effect, the cost of extracurricular English tutoring is also higher than other fields.
According to public information, Disney English has a total of 96 lessons/year, 6 lessons per class0 minutes, the cost of each class: about 250-260 yuan, the total cost of one year is 24,000 yuan. In order to adapt to the consumer population, this is also the reason why Disney English is opened in first-tier cities.
All along, Disney English’s service has been well-known in the industry. The parents of the students expressed their appreciation for their teaching environment, atmosphere and teachers. Accordingly, Disney English must spend a lot of manpower and material resources to maintain the hardware condition facilities.
From the perspective of labor costs, Disney English has always adhered to a pure foreign teacher offline teaching mode. According to reports, the average monthly salary of foreign teachers of Disney English is about 25,000 yuan. Affected by the global epidemic, foreign teaching resources cannot be introduced, and the current price of foreign teachers in China has increased, further aggravating the cost input.
Since January, the closure of offline stores has basically interrupted Disney English’s revenue. The unbalanced revenue and expenditure situation makes Disney English’s business difficult.
Market competition and the impact of epidemic situation, where should offline institutions go?
In fact, the development of Disney English has been declining.
In 2013, Disney English had 44 stores nationwide, and as of the closure, only 26 offline stores remained.
In recent years, major training and educational institutions have emerged one after another. Compared with organizations with the same business model, the number of Disney English stores is not dominant.
Taking EF Children’s English, New Oriental Bubble Children’s English, and Ruisi Subject English, which have a large market share, as examples, there are more than 100 training centers in the country, and Disney English is a 12-year-old brand and the number of stores. Restrictions, so that the market development space it faces is getting smaller and smaller.
Because of the large expenditures on the maintenance costs of the institutions themselves and the high tuition fees, the joining fees of these institutions have also increased. This is a big challenge for the training institutions to explore in the new city and expand user groups.
At present, the after-school tutoring of young people is still based on offline education. Therefore, the epidemic has a huge impact on this industry.
Taking the “big head” Ruisi Education in the education and training industry as an example, Ruisi English has 475 learning centers across the country, and its revenue has been greatly affected by the epidemic. According to its financial report for the first quarter of 2020, Ruisi Education’s total revenue was only 109 million yuan, a year-on-year decline of 67.5%. The resumption notice was delayed, but the loss came as scheduled.
Recently, even in Huangzhuang, Haidian, the “cosmic education and training center” with the best resources, in the past half a year, the gate court has been neglected, which has caused large institutions to suffer heavy losses, and many small and medium-sized institutions are unable to escape the doom.
Squeezed by various reasons, offline education institutions are facing a severe survival crisis, but they are giving online education productsThe development of licensing provides strong competitive opportunities.
According to data from AiMedia, the top five children online English education brand users in 2019 are: VIPKID, Akasso, 51Talk, DaDa English, Miller English. These developing “rising stars” are competitors that cannot be ignored by established educational institutions on the market.
Brand marketing of online education mostly relies on the cooperation of online advertising, and the communication effect is more extensive. And its simple and convenient teaching mode is more favored by users in this fast-paced era, and offline activities that supplement teaching also increase the user experience to a certain extent and increase the motivation of students to learn.
The dismal withdrawal of Disney English has in fact sounded the alarm for relevant training institutions that only rely on offline education. Many institutions such as EF English for Children and Reed English have already tried to combine online and offline teaching models. As the market competition intensifies, how to expand user groups and increase the coverage of core cities is the key for youth English institutions to expand their market share.