Companies with online and offline integration capabilities.
Risk factors not to be underestimated
Opportunities always coexist with risks.
The growth opportunity of online education this time comes from the sudden outbreak of the epidemic, but as the epidemic gradually controls and subsides, and the arrival of the school season, it will inevitably cause the return of traffic and penetration. This is a challenge for the online education industry.
At the same time, the traffic remaining under the special circumstances of the current epidemic is huge enough to at least maintain the performance of online education companies next year. What about the next year and the future? This is also the logic for the major online education industries to actively seize market share.
In addition, affected by the epidemic, online education users may overdraw prematurely. According to data from iResearch, in the first quarter of 2020, taking into account the epidemic, the number of online education APP devices has not increased significantly, indicating that the growth of online education users may have reached the ceiling, but the effective use time of users has increased significantly. For online education companies, it is even more difficult to create increments, and deep mining can create first-line opportunities.
Image source: iResearch
Intensified competition in the industry, you die or die to seize the opportunity, this will bring business pressure to the existing head and the new head that may be generated. The financing of top players continues to advance, and at the same time, new players continue to intervene, including traditional offline education leaders and leaders in other industries.
China Securities Hang Seng mentioned the profitability risk. At present, most online education companies are still at a loss stage. On the one hand, due to the huge marketing investment, on the other hand, due to the unclear profit model of some companies, their liquidity is poor. There will be greater uncertainty about whether the sales expense ratio will decrease and whether the company can achieve ultimate profitability.
However, it is certain that the accumulation of massive traffic resources during the epidemic will surely promote the popularization of online education and accelerate the growth of the industry. This is a big vent.