"Peak" And "Change" Of Online Education

Online education is in a troubled time.

On March 31, at a press conference held by the office of the State Council for information technology to implement the "14th five year plan", LV Yugang, director of the Department of basic education of the Ministry of education, pointed out that "we will work with relevant departments to take more effective measures to further strengthen the governance of off campus training institutions" in accordance with the working idea of systematic governance and addressing both symptoms and root causes ". As an important position of off campus training, online education may also receive this time The spread of governance.

Earlier, a sell-off frenzy hit US stocks, such as iqiyi, vipshop, Baidu and other popular Chinese stocks plummeted, resulting in the "largest one-day loss in human history" burst event, which shocked the global market. Online education industry, the head of the U.S. listed companies, is precisely in the center of this vortex.

With who to learn, New Oriental, tal education stock "three giants" on March 26, the stock price plummeted. Among them, who learned to lead the decline in the list of US stocks on that day, with a decline of 41.56%, which was almost cut off by the waist. The market value evaporated to nearly 50 billion yuan, and once fell more than 55% in the session. New Oriental and tal fell 11.12% and 7.44% respectively, and both fell more than 20% in the session.

On March 29, the first day of this week's U.S. stock market opening, the stock prices of the three major companies, namely, who Xue, New Oriental and tal, continued their downward trend last week, and fell by 18.53%, 3.09% and 7.31% respectively by the end of the week.

On March 30, Chen Xiangdong, founder of the school with whom, also publicly responded to the reasons for the sharp drop in the company's share price. He said that the major change in the stock price on March 26 had an impact on the possible government's concerns about the subject education policy for primary and secondary schools, as well as the worry about possible current Sino US relations. However, the most important factor is the use of hedge funds in the United States As a result, the stocks they hold are forced to close by investment banks, which has a significant negative impact on the stock prices.

On the same day, Chen Xiangdong announced a $50 million increase in holdings and continued to implement the remaining $110 million repurchase plan, or, as a result, education stocks such as who Xue rose in the opening day of the day, reversing the decline in stock prices over the past few days.

Is the long-term development of online education really as Chen Xiangdong said full of confidence?

The 21st century economic news reporter interviewed many experts and learned that the epidemic in 2020 accelerated the penetration of online education industry, but also exposed many problems in the industry. The line of tightening domestic education regulatory policy has been determined, which is an important factor affecting the stock price change of American capital education stock.

In the direction of continuous rectification of education supervision, the development trend of online education industry has aroused widespread concern of the society. What kind of thinking will be brought to the online education industry? What will happen to the industry in the future?

The policy is getting stricter

In response to the "double reduction" work carried out this year, the relevant person in charge of the Ministry of Education recently said: standardizing off-school training and reducing students' excessive extra-curricular burden is a normal work. The national and local policies shall be subject to the contents released by official channels, so as to guard against false information.

"The governance policy for training institutions of education must be stricter than in the past", "it is very clear for the state to strengthen the regulation of training institutions" This is a more consistent reply obtained by the reporter in the process of interviewing experts in the industry.

In fact, there have been a lot of voices and actions in the supervision of online education industry in China this year.

At the beginning of this year, Hefei, Fuzhou and other places issued new regulations to strictly control the "prepayment" of education and training institutions.

In February, the Ministry of education pointed out at a press conference that the problem of training institutions out of school exceeding the standard in advance has not been fundamentally solved, and the illegal behaviors of training institutions such as "difficult refund of fees" and "running away with money" have occurred from time to time. In 2021, it will further strengthen the governance, strictly examine and approve training institutions, strengthen the supervision of training content, and standardize training service behaviors.

At the beginning of March, after Beijing suspended all offline education and training in January, several districts in Beijing once again strengthened the rectification of education and training markets.

Including the two sessions of the National People's Congress (NPC) and the National People's Congress (NPC) which were just concluded, several members of the NPC and CPPCC also put forward suggestions on rectifying the online education industry. Among them, Zhang Yongmei, deputy to the National People's Congress and Secretary of the Party committee of Zhenhai middle school in Ningbo City, Zhejiang Province, proposed to establish a unified management platform for off campus training institutions within the city, and input the situation of teachers, class opening, student list, training content, teachers, class hours and charging standards into the platform. It can be open to the public. If it is not suitable to be open, the data should be kept in the background for the convenience of Taxation, audit and management.

Sima Hong, member of the National Committee of the Chinese people's Political Consultative Conference (CPPCC), suggested strengthening the supervision of pre deposited funds of online education institutions, clarifying the daily supervision departments and punishment system for violation of regulations, and severely cracking down on the responsible persons of online education institutions who maliciously collect tuition fees before "running away".

Thus, it can be seen that the introduction of new regulations on the supervision of teaching and training industry is sooner or later.

"At present, education supervision is still in the research stage. As for the reasons behind this, according to the discussions within the circle, there are actually differences within the group. Because online education on the Internet is an emerging industry, it is difficult to regulate such things as reciting words and online model tests. This is not a teaching mode, but an auxiliary tool. " Senior education investor Xu Hua disclosed to reporters.

Financial security is the key

At present, the prevailing trend of rectification in online education industry is closely related to the chaos exposed by enterprises competing on the track in 2020.

In 2020, the new crown pneumonia epidemic accelerated the penetration of online education, the industry ushered in an unprecedented flow dividend, and also went to the historical "peak" overnight. All the enterprises in the industry wanted to take a share of it, so a crazy "marketing war" was staged.

The famous variety shows, such as "sister 2 riding the wind and waves", "wonderful flowers" and "happy comedian", appeared in CCTV, Hunan Satellite TV, Zhejiang satellite TV and other new year's parties, and launched software platforms such as station B, micro blog and tremor, which covered buildings, elevators, subway and other offline scenes This is the true portrayal of online education industry marketing in 2020.

According to the annual report of 2020 disclosed by the company, the operating expenses of learning from others increased to 7.117 billion yuan last year, with an increase of 306.9% in the same period; the sales expenses also soared from 1.041 billion yuan last year to 5.816 billion yuan, an increase of 458.7%, accounting for 81.6% of the annual net operating income. Tal has not yet disclosed its annual report for fiscal year 2021. Its third quarterly report shows that its marketing expenses in this quarter were $427 million, an increase of 120.3% over the same period of the previous fiscal year.

"There is a great crisis in the excessive publicity and marketing of online education and the business mode of pursuing the flow scale. Because online education must have educational thinking, not Internet thinking, but many investors in online education develop online education with internet thinking. " Xiong Bingqi, President of the 21st Century Education Research Institute, said.

Xu Hua pointed out that the large-scale advertising behavior of online education institutions has actually attracted the attention of the regulatory authorities. "Because education is the foundation of education, and a large number of advertisements on the Internet indicate that education may be kidnapped by capital. The regulatory authorities do not want to see that the education and training institutions only look at the income but not the quality of teaching."

It is because of the "excessive force" of marketing, the financial security of online education enterprises has become an important issue to strengthen the industry supervision.

In 2020, Yousheng education, xuebajun and other teaching and training institutions will successively "explode" financial security incidents, leaving only a chicken feather on the ground, which will "blow up" a large number of online education "prepaid" parents.

However, in the near crazy "advertising" marketing, many domestic online education listed companies have a substantial increase in business income in 2020, but the net profit loss is very heavy.

According to the 2020 annual report disclosed by him, the company's operating revenue in 2020 will reach 7.125 billion yuan, an increase of 236.89% over the same period of the previous year, while the net profit attributable to the parent company has lost 1.393 billion yuan, and the profit in 2019 will be 227 million yuan, with a year-on-year decrease of 714.63%.

It is worth mentioning that these online education institutions have made great efforts in financing.

In the secondary market alone, the three enterprises, who learned from, tal and New Oriental, all achieved high financing in 2020. Among them, tal reached a $3.3 billion placement agreement through the issuance of new shares and convertible bonds; New Oriental raised more than HK $11 billion through its secondary listing in Hong Kong.

"Corporate financial security will be a major direction of regulatory policies for the future online education industry, that is, to supervise the funds of online education institutions to ensure that the institutions will not run away or damage the economic interests of parents." Chu Zhaohui, a researcher at the Chinese Academy of Educational Sciences, pointed out in an interview.

Future industry changes

From the perspective of industry development status, in 2020, under the catalysis of epidemic situation, the online rate of education industry will increase by 10 percentage points, reaching 23% - 25%, and the overall market scale will reach 257.3 billion yuan, with a year-on-year growth rate of 35.5%.

However, based on the two "variables" of national regulatory policy and epidemic situation, the future online education industry will also change. Will its "peak" period end in 2020?

"A lot of people think that online education has ushered in the spring last year, but it is not. On the contrary, it is to let people really realize that there are huge problems in online education. Although online education has the advantages of breaking through the limitation of time and space and sharing resources, its own attribute determines that its space is not very large, and it is very difficult to achieve the same effect as face-to-face teaching because of its weak interaction and high requirements for students' autonomous learning ability and self-restraint ability. " Xiong Bingqi said.

In particular, he pointed out that online education for children under the age of six is fundamentally against the law of education, and it is entirely reasonable that the state may stop such training. At present, if the capital develops and expands the curriculum in this aspect, and carries out advanced teaching and advanced teaching, it must be regulated by legislation.

In other words, starting from the nature of education, online education enterprises will have changes in industrial content and form in the future.

"The online education of low threshold running volume has ended, and the future will be result oriented. Providing users with useful training is the basis for the survival of online education. There is still room for growth in online education, but these spaces are more in the field of vocational education and professional skills. The higher form of online education should be knowledge payment. " Pan Helin, executive director and professor of Digital Economy Research Institute of Central South University of Finance and law, said.

Chu Zhaohui believes that online education is only a way, which will not replace the education in the past. In the future, a variety of education methods will be used at the same time, including online education.

In terms of industry structure, since 2018, the state has strengthened the investigation and punishment of teachers' Part-time schooling in unlicensed teaching auxiliary institutions and public schools. In 2020, a large number of institutions were cleared because of the broken capital chain. Under the double pressure of policies and funds, Huachuang Securities pointed out that the survival space of small and medium-sized institutions is getting smaller and smaller, while large-scale institutions are inclined by policies and capital at the same time, a large number of talents and capital continue to flow in, and the structure of education industry will develop from dumbbell shaped to inverted triangle. The market space vacated by small and medium-sized institutions is expected to be occupied by large-scale institutions, and the concentration of head institutions will be increased.

Focusing on the development trend of this year's teaching and training industry, according to the investment and research team of Huachuang securities, advertising marketing and Omo will jointly write a new story about the sinking market in 2021.

Specifically speaking, the head of the sinking market has less offline layout, and with the rise of people's income level, its demand for high-quality resources has been improved. At present, the participation rate of K12 in the first and second tier cities has been high, and sinking the market will be the key direction for online education institutions to expand. In terms of mode, the head education institutions have raised sufficient funds in 2020. In this case, the advertising and marketing of online education will remain at a high level in 2021. The Omo mode of online and offline integration will also be an important means for online education institutions to explore the sinking market.

?