Online Education Summer War: Advertising Bombardment, 9.9 Yuan Low Price Promotion Class May Disappear

"At present, the policy of recruiting students in summer vacation has not been determined yet. I'm afraid it will be after May Day at the earliest."

A head online education company told the 21st century economic report.

At this time in the past, the smoke of online education summer war has long been diffuse. After the crazy advertising in 2019 and 2020, the earlier the low-cost summer courses are put in, the more favorable it is to take the lead in summer enrollment.

But the wind has changed dramatically this year“ The biggest factor is unclear regulatory policy. " The people said.

An official letter added to the anxiety of online education companies. On April 28, the Education Department of Guangdong Province issued a reminder letter urging all relevant off campus online training institutions to complete the application and filing as soon as possible. In view of the frequent changes in the off campus training policies, the organizers should be responsible for the consequences and future losses of those who fail to pass the filing due to failure to submit materials, take the initiative to apply for the record, and do not grasp the rectification measures.

Previously, the Beijing Municipal Education Commission and the market supervision bureau have already announced or punished XRS online school, ape guidance, gaotu class, Youdao excellent course and New Oriental online.

Now, the system and mechanism of online education supervision has been clarified, and the supervision of illegal early enrollment, vicious competition of low-cost courses, and anxiety caused by the proliferation of advertising have shown signs.

Online education supervision has always been a short board for training institutions out of school, which has its own institutional reasons. Visual China

Crack down on malicious competition in ultra low price promotion

K12 online education summer enrollment has begun. The 21st century economic report reporter learned that a head online education company has offered a generous continuation discount to students who are studying spring classes in primary schools: they offer autumn classes to send summer classes, and the price of autumn classes is 40% lower than that of last year.

The focus of summer enrollment is actually to attract new students. In the four quarters of K12 online school, summer and winter vacation courses are shorter. Its important function is to recruit new students through low-cost promotion, and strive to retain them for the following quarters.

But before this year's summer enrollment, the big stick came. On April 24, the Beijing Municipal Commission of education reported four institutions, namely, XRS online school, gaotu classroom, Youdao excellent course and ape guidance. One of the problems is the charge for illegal enrollment in advance.

Gaotu classroom announced on April 26 that it was off the shelves of courses suspected of early enrollment. XRS online school also announced on April 27 that courses involving early enrollment have been removed from the shelves. At present, these institutions have already removed their autumn courses, but some are still selling summer courses in high school.

These institutions submitted to the Beijing Municipal Commission of education in the content of the commitment letter, including fees charged according to the training cycle no earlier than 30 days before the start of the new course. That is to say, in late April, the registration fee for the summer courses that started in July was collected, and it was still suspected of violating the regulations.

Gaotu class, Youdao excellent course and ape guidance were also reported as "selling courses at a price significantly lower than the cost". No matter the official notice or the enterprise announcement, there is no specific standard clearly identified as obviously lower than the cost price. The announcement of gaotu classroom only said that the course cost should be carefully evaluated and the courses sold at a price significantly lower than the cost price should be removed from the shelves.

The key is whether the low price promotion courses offered by online education institutions, such as 0 yuan, 3 yuan, 9.9 yuan and 49 yuan, belong to "selling courses at a price significantly lower than the cost". Among them, the 9.9 yuan promotion course is the main channel for the institutions to pull in the summer vacation.

The outlook is not optimistic. Recently, Beilun District, Fenghua district and other districts of Ningbo City printed and distributed the special action plan for the centralized rectification of off campus training institutions. The rectification action includes "severely cracking down on the promotion by means of 0 yuan price and ultra-low price, malicious competition, and seriously affecting the ecology of the education and training industry".

Industry insiders believe that once low-cost promotion courses are banned, online education summer enrollment will be affected.

Full coverage of online education supervision

Online education supervision has always been a short board for training institutions out of school, which has its own institutional reasons.

In 2017, the approval of the education authorities on education websites and online schools was revoked, that is to say, the establishment of online education institutions does not need to apply for school running licenses like setting up offline institutions.

In an online consultation on the website of Beijing Municipal Education Commission in May 2020, some users reported that a K12 online education institution had run a school illegally without a school running license. In response, the Beijing Municipal Education Commission replied that "the company has been registered and approved by the market supervision department and is in charge. Please further report to the relevant departments.". In a report published in the people's daily on April 29, Liu Lin, President of the China Private Education Association, said that it was difficult to implement the supervision of off campus online training and education. He suggested that the online education market access standards should be reset according to law, the online education license system should be established, the examination and approval management should be strengthened, and the orientation should be checked from the source.

Liu Lin also suggested that "it is necessary to make clear in time the division of responsibilities of relevant departments such as education, Netcom, and industrial and information technology for online education supervision, and build a regulatory system with clear rights and responsibilities, coordination among departments, and even though it should be managed."

At present, the macro framework of supervision has been completed. The general office of the State Council issued a letter on April 4, agreeing to adjust and improve the inter ministerial joint conference system for private education. After the adjustment, the main function of the joint conference system is to standardize the management of off campus training institutions.

In addition, the number of members of the joint conference has increased from 14 to 20. The Central Propaganda Department, the central network information office, the Ministry of industry and information technology, the Ministry of culture and tourism, the National Health Commission, the Ministry of emergency, and the State Administration of radio, film and television were mainly added, and the central editorial office was removed.

Tian Guangcheng, vice president of the research branch of China Private Education Association, believes that from the newly added departments of the inter ministerial joint conference system, the governance of off campus training institutions will be fully covered. The participation of the central network information office and the Ministry of industry and information technology means that the governance of off campus training institutions includes both offline training institutions and online education and training. The accession of the national health commission means that the nurseries for 0-3-year-old infants will be included in the scope of supervision and regulation. In addition, the addition of SARFT also shows that the advertising supervision of both online and offline training institutions will be further tightened.

The power to investigate and deal with false advertisements belongs to the market supervision departments. However, the entry of SARFT into the joint conference system may mean that online education advertisements will not only be supervised when false advertisements appear, but also face administrative guidance or regulation.

During this year's Spring Festival, five advertisements for online classes were broadcast in turn during the prime time of CCTV. However, in March, it was reported that online education could not be seen in all the time periods of CCTV.

At the local level, there are other departments to join in the supervision. On April 26, it was reported that Zhejiang Provincial Commission for Discipline Inspection and provincial supervision commission will organize a special treatment for ignoring the interests of the masses, and the specific projects include centralized management of chaos in off campus training institutions.

Turn to low-cost localized customers

As the regulatory storm approaches, online education's summer marketing has been silent so far, and online education companies have turned to local customers.

Gaotu classroom announced on April 22 that it would launch local online courses, and start pilot projects in Jiangsu, Zhejiang, Guangdong, Shandong, Henan, Shaanxi, Shanxi and Beijing. Local online courses include not only localized courses and teaching, but also local enrollment.

According to Liu Wei, vice president of gaotu group and head of gaotu classroom, in order to realize localized enrollment, gaotu classroom will establish three ground teams: local market operation team, responsible for offline channels and school cooperation, etc; Local content operation team, responsible for sorting out the local learning situation, examination situation, etc; The local private domain operation team is responsible for the private domain traffic operation of local new media and other communities.

21st century business reporter also learned that ape tutoring will carry out local online courses in Beijing, Shanghai, Shenzhen and other places in May.

Close to the ape tutor told reporters, "localized online courses will provide a higher degree of matching with local learning experience and services. In terms of customer acquisition, ape counseling will combine new growth channels to create suitable transformation products and explore new ways of playing. "“ In the past, online schools, which mainly provide national general courses, must launch localized products. Only by matching local needs and allowing students to see the effect in the school's mid-term and final examinations, will the enrollment scale of online schools be further expanded. " Cheng Min, vice president of Dashan education, an offline training institution, said.

Another important reason for the local enrollment of online education institutions is that the online traffic fees of byte system and Tencent department are too high. Cheng Min told reporters that the traffic cost of byte system and Tencent system is almost three times that of offline customer acquisition and local community operation.

Tal recently released the fourth quarter financial report of fiscal year 2021, which first disclosed the war situation of online education winter vacation. In the three months ended February 28, 2021, tal's net income was $1.363 billion, up 58.9% year-on-year, significantly exceeding the previous guideline of 37% - 40%.

Among them, XRS online school grew faster, with net income of 436 million US dollars, up 115% year on year. The number of students in the long-term regular price class of XRS online school increased by 71% over the same period of last year, reaching more than 3.5 million, accounting for 53% of Tal's total students, which has already exceeded half.

But tal paid a heavy price for this. The marketing expenses in this quarter reached $660 million, up 171.6% year-on-year. Some people in the industry believe that the sales expense rate of XRS in this quarter has exceeded 100%, that is to say, the school spent more money on marketing than it earned in the end“ If regulatory policies have an impact on the advertising and online education market, we will do the same as our competitors in the industry, but now we need to wait for a clear policy. " Tal CFO Luo Rong said at the financial report meeting on April 22.

In fact, even for the head companies with sufficient capital, relying on massive marketing investment to achieve high-speed growth has come to an end. The perplexing regulatory policies are only the last straw to crush this unsustainable growth.

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