Online education can’t get out of the collective dilemma behind a bloody listing of Education

“Eight years ago, online education was still in the stage of promotion, and we were ready for three or five years of education together. Eight years later, it’s harvest time. On the platform of education together, more than 20 million students from more than 300 cities in China study together every month, which is a great number. ” On the night of the education listing, Lei Jun said on his official account. < / P > < p > the issue price of an education company was $10.50 per share, which soared to $11.83 after listing, and then began to decline. The final closing price was $10.57 per share, only slightly up 0.67%. < / P > < p > what attracts more attention is the loss situation of an education project. In 2018, 2019 and the first nine months of 2020, its revenue was 310 million yuan, 410 million yuan and 810 million yuan respectively, and its net loss was 656 million yuan, 964 million yuan and 975 million yuan respectively, with an accumulated loss of 2.595 billion yuan. < / P > < p > according to the research of China Merchants Securities, the average conversion rate of online education (the ratio of low price to regular price) is 15% – 30% from summer to autumn, and the average retention rate (the ratio of regular price users to continue classes) is 50% – 80%, both of which are at a low level. < / P > < p > this means that institutions have to spend money on innovation all the time. In the online education industry, where the cost of acquiring customers is getting higher and higher, it means that only continuous financing can survive. < / P > < p > after the huge investment in the whole industry, it is doomed to be a long-term battle for endurance. No one wants to lag behind, and no one dares to lag behind. After all, once lagging behind, it means that all previous efforts are wasted. How many players can make a profit in the end? < / P > < p > according to the report “2020q1 & 2020q2e China online education market data” released by iResearch, the online education epidemic in China in 2020 will have a positive impact on the rigid demand online education and training market. < / P > < p > no one wants to miss this opportunity. In the past, the industry marketing war broke out during the winter and summer vacation, which lasted for more than half a year. This year, major enterprises have spent a huge amount of money on marketing. It can be seen from an education prospectus that as of September 30, 2020, the sales and marketing expenses of an education have reached 851 million yuan, exceeding the income of 808 million yuan in the same period. < / P > < p > in fact, since 2018, the marketing cost of education has remained high, accounting for 97.7%, 143.8% and 105.4% of the total income in three years. < / P > < p > back in the past, we have adopted the school entry mode since the establishment of Tongyi education, which provides online lesson preparation, homework arrangement and other products for teachers, but these products are completely free of charge. Through the first mock exam,

has achieved good results in education. The prospectus shows that it has provided teaching, learning and evaluation for more than 900 thousand teachers, 54 million 300 thousand students and 45 million 200 thousand parents in the country. Currently, 70 thousand schools in the country cover 1/3 primary school schools nationwide. < / P > < p > as an enterprise, only providing free products can not support its long-term development. Therefore, we need to find other commercialized projects for education. < / P > < p > “in less than an hour, we sold nearly a thousand study cards. At one time, we thought that the business model had run through.” A former employee once told the media. Good times don’t last long. The first mock exam has been running for a while. A group of Education found that the rate of transformation of high quality education institutions is high, but unwilling to pay too much return. The less educational institutions not only have low conversion rate, but also damage the trust of the platform, and soon, together with education, they give up this model. < / P > < p > subsequently, we hatched the o2o project “taomingshi” and the learning product “growth world”. The former’s business model is to help students find one-to-one offline tutors, while the latter is a game product, which can drive children’s interest in learning through the form of “breakthrough”, and we added props that need to be paid in the education together. < / P > < p > however, these two commercial explorations eventually stopped running for different reasons. “Taomingshi” stopped after the test because of too much investment in o2o; “growth world” brought 217 million yuan of revenue in 2018, but it had to stop because of policy reasons. At the annual meeting, Liu Chang also made clear the new development direction of education, that is, “stick to the school, expand the outside school”, that is, the school is free, and the outside school is betting on online education for cash. < / P > < p > according to an education prospectus, in 2018, 2019 and the first nine months of 2020, the company achieved revenue of 310 million yuan, 410 million yuan and 810 million yuan respectively. < / P > < p > but on this track, there are many powerful competitors, such as XRS, New Oriental online, who to learn from, ape coaching, homework help, etc. Everyone wants to dig the gold mine of K12 online education, but the players of the first and second echelons are in a loss situation. < / P > < p > originally, who to learn from was the only online education company to announce a profit, but its latest financial report for the third quarter of fiscal year 2020 showed a net loss of 933 million yuan, compared with a profit of 1.9 million yuan in the same period last year. < / P > < p > tal and New Oriental online also fell into losses. According to tal’s financial report for the second quarter of fiscal year 2021, its operating loss for the quarter was $49.1 million, while its operating profit for the same period last year was $60.8 million. Net profit attributable to tal was $15 million, compared with a net loss attributable to tal of $23.5 million in the same period last year. < / P > < p > judging from the current situation, the online education industry is highly competitive, and the subsidy will not stop in the short term, which may mean that the loss of each family will continue. < / P > < p > “the prosperity of online education depends on the blood transfusion of capital. It costs 2 yuan for every cent of income. The industry has raised so much money that its income is only tens of billions of yuan. ” Yu Minhong, founder of New Oriental, sighed at the Yabuli China entrepreneur forum held in November this year. < p > < p > Yu Minhong pointed out to the point that the important factor for the online education industry to fall into a loss is money burning marketing, and the larger the scale of the enterprise, the stronger the financing ability, the more money burning. < / P > < p > at this year’s second quarter financial report conference, Chen Xiangdong, the founder of learning from others, said that according to third-party estimates, the amount of online summer market investment may exceed 10 billion yuan. < / P > < p > according to the report of duozhi.com, this year’s summer vacation ape counseling advertising is the largest, which is about 1.5 billion yuan, Xueersi online school is 1.2 billion to 1.3 billion yuan, homework help is about 1 billion yuan, and gaotu classroom is between 800 million to 900 million yuan. < / P > < p > gaotu classroom said that “entertainment marketing” in 2020 is an important part of brand marketing strategy. Currently, it has reached cooperation with well-known variety shows such as “voice of China” and “extreme challenge”; Netease Youdao is just like it, and its K12 online school Youdao excellent course has invited Lang Ping to speak for it. < / P > < p > the giants all want to quickly seize the market share by burning money, so as to achieve the scale effect, and the burning money in the short term has indeed played a certain effect. < / P > < p > in the third quarter of this year, more than 2.9 million person times were paid for the regular price course of XRS, with an increase rate of 116%; and 1.147 million person times were paid for the regular price course with whom to learn K12 online course, with a year-on-year increase of 140.5%. < / P > < p > ape counseling and homework help also provided relevant data of summer regular price courses, in which ape counseling announced that the number of users of summer regular price courses was 1.5 million, homework help announced that the number of students of summer regular price courses was 1.71 million, and then ape counseling announced that the number of paid people of autumn regular price courses reached 2.2 million. < / P > < p > when the whole industry is in the launch war, most companies have been unable to help themselves. Because the follow-up investment, the company will fall into a huge loss, but if not follow-up investment, it may mean that the follow-up lagged behind, which is a greater blow to the enterprise. < / P > < p > according to the recruitment position of Netease Youdao, the annual salary of its lecturer is as high as 400000 to 1000000 yuan, and that of the high school large class lecturer is 500000 to 1000000 yuan, and the excellent can even solve the problem of Beijing hukou; the annual salary of the teacher recruited in its education project is not capped at 2000000 yuan; the income of the head teacher who learns from others can reach tens of millions. < / P > < p > as an education enterprise, the course quality and content of the platform determine whether more students are willing to pay, which is also the decisive point of the whole online education industry. Therefore, in the competition for teachers, enterprises can be said to be regardless of cost. At the same time, online education enterprises also need to spend a lot of money to build technology moat. For example, in a large class, there may be hundreds of students listening online at the same time. At this time, it is necessary to ensure that there is no delay or jam, otherwise the learning effect will be greatly reduced. < / P > < p > at present, online education enterprises not only need to strengthen their own advantages, but also need to resist the invasion of competitors. Under various factors, the whole industry will fall into the mire of loss. < / P > < p > “there are still two years left in the window period of online education. If no company runs out of the positive circulation mode within two years, that is, after deducting all the costs and expenses, the profit and loss will be flat or profitable, the capital will immediately cool down the field, and no further investment will be made, and all the external blood transfusion of online education companies will be stopped, and the final result will be a mess.” Yu Minhong thinks. In August this year, vipkid, an online English education brand for young children, announced that the company’s unit operating profit has been positive for two consecutive quarters, 90% of the channel’s first order has realized profit, the customer acquisition cost has decreased by 45% year on year, and the performance has maintained continuous growth. < / P > < p > in the specific implementation, vipkid put forward the goal of “making a dollar a class” and began to carry out fine management. Its Beijing office area was moved from the original 5A grade office building to the East Fifth Ring Road, which also greatly reduced the online marketing expenses such as subway advertising and elevator advertising. < / P > < p > however, vipkid has not announced the number of paid people, which is the key to maintain its profitability. From the current situation, the fierce competition may make it difficult for vipkid to maintain its profitability. < / P > < p > in the situation of fierce competition in the first and second tier cities, many online education enterprises aim at the sinking market, which is the key market for players to achieve large-scale revenue. < / P > < p > “the third, fourth and fifth tier cities have great growth potential, but all of them are still looking for effective communication channels. It is not enough to burn money only by advertising. Advertising is effective for the first and second tier markets, but not for the third, fourth and fifth tier markets.” An online century business report said. < / P > < p > at the same time, the teaching content is different in different regions. Sometimes online education enterprises need to make adjustments for different regions, but they can’t give up the standardized output, which is also a big test of the content level. < / P > < p > in terms of products, the current double normal university class is to verify the profitable model, and make profits by learning from anyone. However, the problem is that each company has no firm moat, and the head company has famous teachers in the industry. The difference in teaching content level is not big, and there is no big barrier in technical level. < / P > < p > If enterprises want to make profits, they can either reduce the salary of tutors or expand the average number of students in a single class. If the tutor is paid a high salary, it is no different from the small class. If the number of students is expanded, the teaching effect may be difficult to guarantee. < / P > < p > at present, who to learn from has expanded