This is not easy for Suntech. Suntech, founded in 18, was transformed into an online education company on 20 14, and its main business includes academic upgrading and vocational education. Adult education is regarded as an "old bone soup" industry, with mature categories and tepid prospects, but it faces the pain points of difficulty in obtaining customers and low repurchase rate.
Suntech executives said: "In recent years, the company has continuously optimized its product structure through strategic adjustment, and pursued the balance between cost and income while seeking growth. Due to our continuous efforts to reduce costs and adjust our business, we achieved a record net profit of 22.08 million yuan. "
In the past, Suntech, like a typical Internet company, pursued growth while enduring losses. Its annual revenue increased from 4,654,380,900 yuan in 2065,438+06 to 2,204 million yuan in 2020.
This quarter shows the difference: Suntech's income and the number of students have maintained a year-on-year growth while achieving profitability. The reason is that Suntech has made great efforts in the field of postgraduate and vocational skills training.
Online vocational education industry generally faces pain points such as low repurchase rate and difficult externalization of results. Suntech's profitability shows that business diversification seems to be one of the ways to break through.
According to the financial report, in the second quarter of 20021,Suntech achieved a net income of 630 million yuan, a year-on-year increase of 22.8%. Gross profit was 532 million yuan, a year-on-year increase of 28.9%. There were 86,602 freshmen, a year-on-year increase of 4.8%.
Suntech executives said: "The increasingly fierce competition in the job market and the diversification of our courses have jointly promoted the continuous growth of our vocational skills and postgraduate training courses. At the same time, Suntech is still developing vocational skills training courses such as new occupations. "
Many postgraduate institutions offer courses for fresh graduates, while Suntech's postgraduate training is mainly aimed at working people in society. Courses mainly include law, education, accounting, English, politics, MBA and international MBA programs.
Overseas MBA is a branch of Suntech. This kind of degree has a low entry threshold, and students can complete their studies in China without staying in the diploma. Under normal circumstances, you can get a degree certificate in one and a half to two years as long as you take classes online and complete your homework according to the standards. The tuition fees of such courses are relatively high, ranging from tens of thousands to hundreds of thousands of yuan.
At present, Suntech's vocational education business includes accounting, teachers, psychological counselors, securities qualification certificates and other qualification examination training.
In this quarter, Suntech's net profit/loss ratio, that is, the percentage of net profit/loss to net income, rose from 24.6% in the second quarter of 2020 to 3.5% in this quarter. In the second quarter of this year, in addition to increasing income, the direct reasons include reducing costs.
In the second quarter of this year, Suntech's institutional management expenses and sales expenses were effectively controlled, down by 8.0% and 7.9% respectively. In addition, the main business cost was 97.29 million yuan, which also decreased by 2.3% year-on-year.
Vocational education companies invest a lot in marketing, and some head companies invest more than one billion yuan every year, accounting for more than 70% of the total revenue, resulting in weaker companies having no money to invest in products, services and research and development.
Due to the weak learning motivation of vocational education users, vocational education enrollment is difficult. Once the price of marketing channels rises, the promotion of marketing efficiency of education companies may not keep up with the increase of advertising expenses.
According to reports, after the "double drop", although K 12 online education company no longer launched, the online customer acquisition cost of vocational education has not decreased, because there are still continuous demand for launch in industries such as finance and games, and there is no trend of cost reduction at present.
In terms of reducing marketing expenses, word-of-mouth marketing, students' internal transformation between different courses, and the establishment of private domain traffic have all been re-emphasized.
Fundamentally speaking, the driving force of growth lies in improving product value and marketing efficiency. Lu Lu badminton, Chief Financial Officer of Suntech, said: "In this quarter, we took a number of measures to reduce costs and improve operational efficiency within a reasonable range. While continuing to strive to provide users with a better learning experience, we have also expanded the categories of courses. "
After the "double reduction", vocational education has become a hot spot of transformation. In June, 20021,the Vocational Education Law (Revised Draft) mentioned that vocational education and general education are two different types of education, which have the same important status, further clarifying the legal status of vocational education.
According to yost Sullivan's prediction, the vocational education market in China will maintain a growth rate of 6.7% from 2065438+07 to 2022, and the industry scale will continue to expand. It is predicted to exceed 1 trillion in 2022, of which the non-academic vocational education market will exceed 400 billion.
In fact, the track of vocational education is already crowded and the competition is fierce. Recently, Gaotu announced that it will increase its investment in adult vocational education, launch a new brand canoe in the future, and integrate adult services such as postgraduate entrance examination and language training. Before 20 14-20 18, there was a wave of buying vocational education assets by listed companies in the A-share market. However, the performance promises of several acquisitions failed to meet expectations, which also showed the difficulty of the vocational education track.
Although the prospects are promising, vocational education is facing real pain points.
First of all, it is difficult for vocational education to get customers. In 2020, there will be 32,852,900 college students and 3139,600 graduate students. This is a huge user group, whether for pre-job markets such as grading and textual research, or post-job markets such as skill training. However, the difference between adult vocational education and K 12 education is that students pay their own money, not parents. In other words, users of vocational education spend their own money to "abuse" learning, resulting in low willingness of users to pay, and it is difficult for companies to obtain customers.
Secondly, the repurchase rate of vocational education is low. Take textual research training as an example, users will not come back to study after taking the exam. This leads to a shorter life cycle for users of vocational education. Once the marketing investment is too large, the tuition fees recovered during the user's life cycle will be difficult to cover the cost and cause losses to the company.
Third, it is difficult to externalize the achievements of vocational education. Only by letting users see the results of education will they be willing to continue to pay. Adults, on the other hand, have limited learning energy and are difficult to persist, which leads to great after-sales pressure such as refund. Especially in vocational education such as skill training, learning results are not presented in the form of grading and textual research, and users' recognition is low, which leads to vocational education being easily replaced by low-cost learning forms such as knowledge payment.
In other words, the adult vocational education company is actually digging a moat in the shallows, which is extremely difficult. So, what are the paths to build a moat?
First of all, there are many categories of non-academic vocational education, mainly including IT, accounting, public examination, teachers, driver's license, doctor's qualification certificate, practical language and so on. The scale of a single market is limited, but users can sign up for multiple courses. Therefore, most online vocational education companies build one-stop learning platforms.
Secondly, in addition to 2C marketing model, more and more vocational education companies provide employee training services for companies in different industries. It also includes Suntech. This 2B model is considered to be beneficial to expand the user base, improve market penetration and reduce customer acquisition costs. For enterprise users, it can solve the problem of users' willingness to pay, that is, the company pays money and the staff is trained.
Recently, K 12 Research Report on the Transformation and Development of Online Education released by 2 1 Century Economic Research Institute holds that online education companies need to expand their target market from vocational education to lifelong learning in order to innovate products and expand their user base.
One of the innovative methods is to break the boundary between 2B and 2C markets. The report believes that it is not only beneficial for newcomers to receive vocational skills training, but also conducive to the improvement of employers' competitiveness. It will become more and more common for employers to buy vocational skills training for newcomers in the workplace. Online vocational education companies should explore the To B market and develop customized courses.
In the final analysis, vocational education companies need to deeply understand the needs of adult users, and deepen their research and development quality, teachers' professional level and learning platform operation experience. Once the moat is built and the first-Mover advantage is realized, it is difficult for latecomers to catch up in the short term.
As an established vocational education company founded in 18, Suntech made a profit for the first time since its listing, which means that it has gained a firm foothold in the field of adult education. But in fact, it also shows that it is not easy for vocational education track to be large-scale and profitable.
For more information, please download 2 1 financial APP.