Driven by capital, online education suddenly became hot, and the industry financing record was constantly refreshed. However, it is difficult to hide the crisis behind high valuation and high investment. CCTV Finance once exposed a set of survey data in the report. In the seemingly fiery online education industry, nearly 70% of enterprises are mired in losses, and burning money at will is the crux of the long-term profit of online education institutions.
With the continuous emergence of online education enterprises, the industry competition is becoming more and more fierce. In order to expand market share, the cost of obtaining customers is also rising. For example, the previously rumored VIPKID costs as much as 8,000-110,000 yuan per customer. Although its founder and CEO Mi Wenjuan denied this statement, he said that this is only a short-term and individual phenomenon, such as increasing testing channels and marketing investment, but the average cost of a single VIPKID customer is still as high as 4,000 yuan.
The cost of acquiring customers is unbearable. Although the financing amount of VIPKID continues to soar, it is still difficult to escape bankruptcy rumors, layoffs and profit problems. According to the data, the overall revenue of VIPKID 20 17 was 376 million yuan and the net loss was 459 million yuan. By the end of 20 18, the revenue reached 3 billion yuan, and the loss also expanded to 2.2 billion yuan. In other words, under the continuous high customer acquisition cost, the loss of VIPKID is also growing.
Even though it is regarded as VIPKID by capital, it is still plagued by high customer acquisition costs and how to reduce losses, and the online education industry is also in a dilemma. What can be seen is that online education players who are now in prison are deliberately making profits.
Phenomenon 1: the change of traffic acquisition ideas
Advertising has always been a big expense for online education enterprises. In order to seize the market and increase the exposure, various online education companies have tried their best to seize the minds of users by spending a lot of money on advertising. There is even a saying in the market that online education companies put 1 day and100000 advertisements on average.
Take the summer online education market as an example. Last year, Ape tutor, homework help 1 class, Xueersi online school and other platforms rushed to put advertisements in crowded places such as buses, subway stations and online platforms. As of July last year, the total advertising of online education companies participating in the summer enrollment war reached 3-4 billion yuan. According to the marketing budgets of the four online education brands this summer, they are 654.38+0.5 billion yuan, 654.38+0.2 billion yuan, 654.38+0.0 billion yuan and 800 million yuan respectively, totaling 4.5 billion yuan.
Hundreds of millions of marketing expenses are exchanged for financial losses.
Taking Good Future as an example, according to its annual report for fiscal year 2020, as of February 28th, 2020, Good Future will realize operating income of USD 3.273 billion in fiscal year 2020, up by 27.71%year-on-year; The net profit was-6,543.8+0.28 billion USD, a year-on-year decrease of 65,438+0.35.02%. The loss is mainly due to the surge in marketing expenses.
The financial report also shows that from fiscal year 20 16 to fiscal year 2020, future marketing expenses will increase from $74 million to $853 million, and the proportion of operating income will increase from 1 1.87% to 26.05%. In the past three years, the year-on-year growth rates were 92. 14%, 99.92% and 76.20%, respectively, which were significantly higher than the revenue growth rate.
Prior to this, Zhang Bangxin, the founder of Good Future, burned too much money because of "tens of millions of advertising investment", so he dropped out of school in anger and wanted to be the person in charge of online school subway advertising. Now he has to compromise with the trend of advertising.
On the other hand, some companies have drastically cut their marketing expenses due to losses. For example, since the transformation of 20 14 online education, Suntech's institutional losses have become the norm. According to its prospectus and financial report, Suntech's net losses in 20 15 and 20 16 both exceeded RMB 200 million, and the net losses in 20 17 and 20 18 reached RMB 927 million respectively.
Behind this is the sharp increase in marketing costs. In 20 17, Suntech's institutional marketing expenses were13.52 million yuan, which was 168% higher than that in 20 16, accounting for 78.2% of the total operating costs. In 20 18, the marketing expenses rose by more than 800 million yuan again, reaching 21530,000 yuan, while its revenue in the same period was19.74 million yuan. Suntech, which lost more than 100 million yuan for four consecutive years, also tried to change the status quo, reducing the loss rate by compressing marketing costs and building its own traffic pool. After drastically cutting marketing expenses, Suntech's loss rate fell to the lowest point in recent years.
This is not a special case. According to a visit to Yi Ming. Com, in the past, the advertising forms all over elevators, bus stops, subways, online car rides, parking lots and other channels are gradually shrinking, and online education institutions have a clear intention to get rid of traditional marketing methods. The form of burning money advertisements gradually faded out of people's sight, and the online trend of delivery channels began to be obvious, while the frequency of short video platforms such as Tik Tok increased significantly. The data shows that from the end of 20 18 to the first half of 20 19, more than 1500 online education companies, including dozens of head companies, began to put information flow advertisements in Tik Tok.
In addition, marketing methods such as signing spokespersons and variety planting emerge in an endless stream. For example, ape counseling has invested a lot of money in popular programs such as Ace to Ace and super brain. Netease's well-known K 12 online school has a boutique class to invite Lang Ping to be the brand spokesperson; Who will learn from its high-school classroom to land in the national variety show "Extreme Challenge"? Homework help and China National Women's Volleyball Team reached a strategic cooperation and became the exclusive global endorsement partner of China Women's Volleyball Team in education and other fields. The idea of online education traffic acquisition has undergone a fundamental change.
Phenomenon 2: Add strong social attributes
In addition to advertising and attracting customers, the online education platform is also actively converting increments into stocks. Enhancing the social attributes of products is one of the ways to achieve product breakthrough and steady growth, and expanding the ways to obtain customers while enhancing user stickiness. Its social scenes generally include class group discussion, after-class exercises and mutual approval, exchange groups and so on. Now most online education enterprises are trying to connect students through these same attributes and form a circle.
Is it really necessary to socialize online education? Undeniably, it can provide more communication space, create more interactive scenes and strengthen the connection between users; Secondly, users form a relationship between competition and competition, which arouses their desire for learning, thus improving retention and activity.
However, in the view of most parents with traditional thinking, students should study without socializing, let alone socializing online. Moreover, in this typical tool-based scenario, adding strong social attributes has led to countless problems. Recently, Xuesisi APP named by the Internet Office is an empirical case.
According to netizens' reports, there are some outstanding problems in Xuesisi Online School APP reported by netizens, such as vulgar videos and abetting puppy love content. The National Network Information Office instructed the Beijing Network Information Office to interview the person in charge of the website of the local education authorities according to law, ordered rectification within a time limit, improved the information security system, strengthened content review, and effectively implemented the main responsibility.
In this regard, Xuesisi Online School said that the content problem mentioned this time was in May, when users uploaded it themselves. Learning and thinking online school was deleted as soon as it received feedback from parents, and insisted that it had been strictly self-examined and strengthened the audit mechanism. After self-examination, there is no bad content.
However, this is not the first time I have been interviewed by the Internet Office. In July, 20 19, in the list of Internet companies that found problems in the inspection of users' personal information protection in the first quarter of 20 19 released by the Ministry of Industry and Information Technology, Xuesisi Online School was ordered to rectify by the Ministry of Industry and Information Technology for "not publicizing the rules for the collection and use of users' personal information" and "not providing the service of canceling users' accounts".
Or forced by intensified market competition, online education companies frequently rush to run in front of the regulatory red line, which has always been the focus of rectification by institutions such as the Network Information Office, the Ministry of Education and the Ministry of Industry and Information Technology. The chaos of online education apps has long existed. Previously, CCTV news channel repeatedly exposed the chaos of pornographic content and online games in learning apps for primary and secondary school students. It is not an exaggeration to describe it as "committing crimes against the wind". Various departments have issued rectification opinions and imposed penalties. In the Apple App Store alone, more than15,000 educational apps were taken off the shelves.
Undoubtedly, adding a strong social attribute to online education APP can be one of the effective ways to change the way of getting customers, reduce marketing expenses and solve the profit dilemma, but the current online education socialization seems to be going astray forever.
Phenomenon 3: collective price increase of institutions
In addition to cutting costs, many online education institutions have turned their attention to open source. Perhaps because of the increasingly high operating costs, in order to alleviate the financial pressure, the entire online education industry is trying to "enrich the blood" by raising prices, and many online education giants, including learning and thinking, ape counseling and Netease Youdao, are among them.
According to the survey, the price of online education enterprises has increased. Judging from the month-on-month price increase of summer classes compared with spring classes, the prices of various teaching and training institutions in summer rose by 10%-80% on average, among which homework help rose by 85%, Xuesisi online school rose by 22%, and ape tutor rose by 165438.
It is reported that this is the first comprehensive price increase in the online education industry in the past five years. It is also generally believed that the competition between a large number of free courses and online education enterprises with low-cost marketing has officially entered the second half to alleviate the pressure of cash flow reserve under the large-scale screening in summer.
Still because of the epidemic, the Ministry of Education has successively issued a series of documents on "suspension of classes", and primary and secondary schools all over the country are also conducting online education in an orderly manner. These policies have become a booster for the development of online education industry, and also brought huge traffic and users to online education enterprises. However, at the same time, there are countless small enterprises. The impact of price increase is the same, which may alleviate the financial pressure to a certain extent, but it also faces the risk of losing students.
From this point of view, it seems that reducing marketing expenses, expanding customers through social activities, or increasing prices to generate income are not effective means to solve the loss dilemma and realize profitability. In the long run, the online education giant Hujiang, which once could not find investors to take over, gradually disappeared, and the financial report of Xuesisi Online School, which landed in the capital market, became more and more ugly.
The online education industry seems to be spared.