In the big situation of a sharp decline in advertising, online education companies have become the most eye-catching gold masters.
Editor’s note: This article is from WeChat public account “investing in the network” (ID: China-Venture), author Li Tong, editor Han Honggang.
This summer, the battle of the K12 online school is quite anxious.
Before the summer vacation, 猿 counseling, homework, and one-on-one began to vigorously promote short-term preferential courses, starting at a minimum of 50 yuan, and starting a promotional battle. The school and the school promoted the “old students to continue their summer and autumn. The promotion strategy of enjoying the 5% discount on the course, the “49 yuan summer trial class” mobilization meeting was held at the end of June; Netease has a quality class, Tencent Penguin counseling put all kinds of 0 yuan teacher live lessons on the home page recommendation .
At the same time as the low-cost class, online education companies are still advertising at high prices. According to incomplete statistics, as of the beginning of July, the online education companies participating in the summer enrollment wars had a total of 3 to 4 billion yuan of advertising, and the average number of advertisements per day for learning, teaching, and homework reached 10 million. In the big situation of a sharp decline in advertising, online education companies have become the most eye-catching gold masters.
The main propaganda of each company is the “live group class”, which is also the most mainstream online education product form in the K12 field. Grasping the “big class live class” with a good profit model, online education companies try to get rid of the high cost of acquisition and low renewal fees. However, its complicated classroom management difficulty, the teaching effect that is difficult to guarantee is also an unavoidable challenge.
Catch the big class and get rid of the loss situation
Overall classes have always been a powerful tool for the education and training industry.
In 1999, Chen Xiangdong entered New Oriental to become a GRE big class teacher. At that time, there were five or six hundred students in each class. In 2002, he went to Wuhan New Oriental as the principal, and his first year profit reached more than 15 million, which was a quarter of New Oriental’s profit. Later, Wuhan New Oriental’s net profit margin reached 47%.
In the eyes of Chen Xiangdong, the big class is the absolute bargaining chip for New Oriental to achieve profitability. Compared with the offline class, the online large class has a broader development space. Breaking through regional restrictions, an online teacher can reach thousands of students across the country. In 2014, Chen Xiangdong left New Oriental and founded the online education company “Who to learn”. In July of that year, a video live broadcast technical team was formed. In March of the following year, more than 3,000 interactive online live broadcast classes were launched.
But the early live broadcast class course experience is not good, the infrastructure is not perfect, the one-to-many delay is serious, the teacher can only focus on teaching, it is difficult to interact with the students. In contrast, a more personalized, more targeted “one-on-one” course is in line with the line.The gap between classes is small and is more popular with students and parents.
The “one-on-one” business has a relatively fast start and relatively low economic efficiency. Increasing traffic costs, as the number of teachers increases, the management difficulty increases day by day, and the user market that has been gradually divided up – with the increase in industry concentration, many companies that promote “one-on-one” business are gradually falling into a quagmire of losses. The “one-on-one” track became a game for head players.
The “big class” after the school’s educational tools matured once again became the focus of the industry. Cut down a number of business lines, and decide to develop the “live group class” business, “who is learning” to take the lead in entering the fast track. In the first quarter of 2019, the “who learned” revenue reached 269 million, an increase of 474% over the same period of the previous year of 46.91 million yuan. In June 2019, “Who Learned” was listed on the NYSE, becoming the first online education company to achieve scale profit before listing.
In the past, companies that promoted “one-on-one” business have also moved closer to the “big class” business. The one-on-one tutoring of one-on-one tutoring is one-to-one, and the one-to-one “one-to-one” VIPKID is launched in the English live broadcast class “VIP Bee School”. The “猿猿”, which originally tried to develop the one-on-one and two-line classes, also focused on the development of classes, which closed the first-to-high school 1-to-1 business in 2017 and 2019 respectively.
One-on-one is like a Michelin restaurant, which is a good product, but not everyone can afford it.” Qiu Yanfeng, vice president of blue elephant capital investment, pointed out that “the big class network school is essentially a fast food chain, and the profit model is better.
The Internet company that holds the traffic is also crowded into the “big class” track. Behind the “Traditional Quality Course” is the traffic support of the learning APPS and Netease Group, which Netease has covered in various learning scenarios. At the beginning of the year, the headline of the secret incubation of the K12 network school business was also considered a dangerous entry because of its huge traffic and distribution advantages.
The market for large classes is growing fast, and all companies are in a fast “occupation” stage. Qiu Yanfeng, vice president of blue elephant capital investment, believes that after the competition is intensified, the price of large class will be further reduced, attracting more “price-performance” users to enter.
In the eyes of Shen Wenjie, executive director of Yunjiu Capital, can customers get high enough marketing efficiency, and the reduction in customer unit price can bring a larger number of people to realize large income, and the difficulty of classroom management brought by large numbers of people And the guarantee of educational effects is the three core points that need to be paid attention to when implementing the “live class”.
The current initial investment in online education companies has begun to pay off. As of the beginning of July, Xueshangsi School, 猿 counseling, homework and summer enrollment exceeded 1 million person-times, and the continuation rate of 1-5 grades was more than 90%, and the counseling was over 80%. The online renewal rate was flat for the first time, and the overall enrollment exceeded 10 million. The education industry in the school is entering key nodes, and various education companies will also face new challenges.
“Good future and New Oriental’s face-to-face business may form with its online business”Of,” said Sun Guofu, senior investment manager at Innovation Studios. “Online education newcomers need to spend some time learning how to build a back-end supply chain for the education industry.
“Double Division” mode upgrade “big class”
The early live broadcast classes required users to have “high autonomy” and more to apply to vocational education and adult education. With the development of the overall online tools to explore the K12 field, live large classes also face more complex classroom management and teaching quality challenges.
“The most efficient online education delivery is information, and delivery services are particularly difficult,” said Qiu Yanfeng, vice president of blue elephant capital investment. The “Double Teacher” model is seen as a new solution for delivering both information and services. “Double teacher” refers to the lecturer with the tutor, the lecture teacher is responsible for classroom teaching, and the tutor is mainly responsible for tutoring and service.
In the eyes of Luo Yuan, vice president of Netease and the head of the quality course, the advantage of the big class live class is to let more users reach the high-quality teachers and restore the collective learning atmosphere. Through the dual-teacher mode, the tutor can also serve each student in a one-on-one manner to improve teaching efficiency.
The earliest to explore the “double teacher” mode is the school of learning and thinking. In the summer of 2015, Xuesisi Online School first tried to enroll students in the big class live mode, but the number of high-quality teachers was only 400, and the number of recording classes in the same period exceeded 10,000. After the autumn recruits had reserved the tutors, the enrollment situation had improved significantly. In 2016, the number of enrolled students in the winter vacation was expanded to thousands. In the future, the FY2017 annual report shows that the school’s revenue increased by 144%, and the proportion of online courses in total future revenue rose from 4.1% to 5.2%.
The core of the “Double Teacher” model is the construction of the faculty team. On the one hand, we must absorb high-quality teachers to ensure the effectiveness of large class teaching, on the other hand, we must pay attention to the recruitment, training and management of mass tutors.
For the team of lecturers, NetEase has adopted an external introduction and internal training model, and the tutors are more focused on internal training. Too trivial work may make the tutor lose the sense of job accomplishment. Luo Yuan, vice president of Netease and the head of the quality course, believes that the tutor should be trained as a “helper, consultant” class teacher to supervise and promote learning. Instead of mechanical Q&A.
In the eyes of Sun Guofu, senior investment manager of the innovation workshop, the main difficulty in the operation of the live broadcast class is the productization and standardization of all aspects of the teaching service. One of the key points is to use new technology to improve the labor capacity and use the data system to track And optimize each link.
The current optimization method for the quality class is to introduce the AI teacher. AI can complete daily work such as homework correction, and can accurately summarize and summarize student characteristics, so that teachers can develop personalized teaching programs more specifically. Emancipating from the single, repetitive, and mechanical brain work of the traditional education model, teachers can devote more humanistic values and pioneering careers.
What is a valuable online education product form?
From the initial big-duty mode to the one-on-one, personalized class mode of personalized service, to the rise of the double-teacher class, K12 online education has been exploring suitable educational product forms.
NetEase’s vice president and head of the quality department, Luo Yuan believes that the K12 class is the most mature form of business training. In her eyes, a good business model is not a single increase in profits, but to benefit more people, so that everyone can get value from it.
Students can get better teaching resources at a lower cost. Quality teachers can train more students, get more material returns in the economy, and organizations can focus on improving teachers’ professional skills and product service experience. All three parties can get a better development path, and finally a virtuous circle will be formed.
The rise of “live class” does not mean that “one-on-one” and “small class” are going down. Low-cost large classes are a good “new” channel, and users may derive “small class” users. The “small class” will cover two types of users: one is the offline training class in the city, but the users who are rushing to the offline line want to transfer to the online, and the other is the local teachers who are not in contact with the quality. But users with relatively good family economic capabilities. Qiu Yanfeng, vice president of Blue Elephant Capital Investment, believes that there is a possibility of synergy among business lines.
In the eyes of Netease’s CEO Zhou Feng, the “double-player live broadcast class” model can be productized and the content economy model is good. It will be a mode of running far and steady, and the small class mode also has successful conditions. In addition, he is also optimistic about the “content interactive class.” Compared with live lessons, interactive classes mainly rely on multimedia means to complete the presentation of teaching content. The content forms include recording video, gamification interactive exercises, and simultaneous use of AI machine automatic scoring and 3D courseware demonstration.
Qiu Yanfeng, vice president of blue elephant capital investment, believes that the essence of the “content interactive class” is to upgrade books. Different from the teaching style of the training class, the interactive class with animation and games is more like a companion product. By blurring the boundaries of learning and entertainment, children will have a more enjoyable learning experience.
Online education companies are constantly innovating to expand their product offerings. But the current traffic dispute is still putting pressure on them: if shrinking spending is reduced, it means that the market will be handed over. If it doesn’t shrink, the cost of getting customers will soon reach the critical point, making it difficult for the company to afford.
Shen Wenjie, executive director of Yunjiu Capital, believes that the future traffic dispute will continue to be fierce. As sales drivers move toward product-driven, technology-driven, online education companies may be able to get out of the quagmire faster.