The Next Track Aims At Adult Education

In the summer vacation of 2021, the off campus training industry will experience an unprecedented test.

In the morning of July 2, the official website of the Ministry of education updated personnel changes. Yu Weiyue was the director of the newly established Supervision Department of off campus education and training, and Chen Dongsheng and Yang Jianbo were the deputy directors. The long-term and effective management mechanism for off campus education and training is gradually improving.

Prior to this, the Central Committee for comprehensive deepening reform deliberated and passed the "opinions on further reducing the burden of students' homework and off campus training in the stage of compulsory education". However, due to the "double reduction" directly related to the "Regulations on the implementation of the private education promotion law" and the "Regulations on the protection of minors' schools" will be formally implemented on September 1, which means that the coming summer vacation will be the last summer vacation for primary and junior high school students.

As a result, a number of K12 organizations have reported layoffs, "we recently went to various teaching and training enterprises to see that 40% of the work stations have been empty. In fact, there were signs a year and a half ago, but recently the policy has come to be urgent and fierce. " Li Xue (pseudonym), the investment director of an early investment institution focusing on the education industry, said in an interview with the 21st century economic report reporter.

It is reported that Morgan Stanley has lowered the rating and target price of the whole Chinese after-school counseling sector, including New Oriental and tal. By the end of July 1, US Eastern time, China capital online education shares had fallen sharply for several consecutive days. New Oriental fell 4.64% to $7.81/share from the previous day's closing price; Tal fell 7.25% to $23.4/share; Gaotu fell 2.78% to $14.36/share. Among them, tal has dropped about 75% from the highest $90.96/share in February this year.

From disorder to order

"From the business point of view, 3-8 years old is the pre-school age. The policy completely forbids discipline training. Therefore, almost all the young businesses have been laid off. At this stage, only quality education can be done. The layoffs started at the end of May, and began to lay off workers on a large scale in early June. " Xiao Peng, who was in charge of user growth in an online education institution, left in June this year amid a wave of layoffs. He told 21st century economic news that "from the Department point of view, due to the policy's ban on advertising in K12 business, the advertising staff will be cut, and then there will be corresponding layoffs in teaching and sales."

In the past, in the bus, subway stations, elevators and all kinds of variety shows, TV dramas can be seen everywhere teaching and training advertisements one after another. Behind the bombardment is the gradually higher marketing costs. As of the first quarter of this year, gaotu's sales expenses amounted to $353 million, a year-on-year increase of 202%, mainly due to the increase in marketing expenses for expanding the user base and brand, and the increase in remuneration for sales and marketing personnel.

There is no doubt that advertising and user subsidies are two major money burning modes, but for the highly reproducible teaching and training platform, such a simple and crude way to obtain customers can not be bypassed.

"In the past, the teaching and training industry, especially online education, has actually pushed up the cost of acquiring customers." In Li Xue's view, this is the performance of disordered competition in the market“ Marketing costs, in turn, push up the price of training, and parents can theoretically buy education services for less money, which objectively increases the differences between classes. "

Parents have also criticized this for a long time. According to the polar data, as of October last year, more than 60% of K12 online education platform users were located in third tier cities and below, and more than a quarter of users' annual platform payment budget was no less than 10000 yuan.

At a press conference on June 1, the State Administration of market supervision and administration disclosed that in 2020, 155000 complaints about education and training services were accepted, accounting for 8.2% of the total number of complaints and reports, ranking fourth among service complaints. In the first quarter of 2021, 47100 complaints about education and training services were reported, an increase of 65% over the same period of last year, ranking the third.

At the same time, the market supervision department imposed a ceiling fine on 15 off campus training institutions, totaling 36.5 million yuan. Among them, 8 institutions were involved in fabricating the educational background, teaching age and honor of teachers, 9 were making up teachers' teaching hours and working experience, and 13 were all involved in fictitious original price and false discount.

Li Xue further explained that after such a round of rectification, the profit space or cost space in the middle may be released, which is actually controlling the excess profit space of the teaching and training industry.

Where is the future?

The ban is not weak, but the anxiety of parents is not reduced.

In an interview with parents choosing primary schools for school-age children, 21st century business reporter said, "on the surface, everyone looks very Buddhist, but all kinds of after-school remedial classes are indispensable. The children of other families have gone to cram schools. If our children don't, they will feel more anxious. " "The children in the middle class of the kindergarten have already started to do their homework every night until 10:30," one parent complained

After class counseling in online education and compulsory education has not subsided. Li Xue believes that in this situation, the future teaching and training industry is expected to be embedded in school education. Public schools officially purchase the services provided by the teaching and training industry, and reduce the burden of parents through school fees.

In his view, the current is a period of phased closure of the K12 industry. The head platform has built a mature brand image and a complete business chain. In the face of the adjustment of the new policy, there is no need to overcorrect. In the current situation of limited educational resources and social strata still flowing, there is still a lot of room for improvement in the teaching and training industry.

According to the data of frost Sullivan and century securities, the market scale of vocational skill education in China is expected to reach 161.4 billion yuan in 2022; The market scale of vocational examination training is expected to reach 257.7 billion yuan in 2022. When the downward business cannot be extended, there is still a lot of room to expand the business chain upward, such as adult education, postgraduate entrance examination and public examination.

At the same time, capital is also exploring the next "gold mine" of education. With the integration of education and new media such as short video and live broadcast, educational MCN with the main purpose of incubating teachers' IP begins to emerge. In this trend, the new traffic that can not be covered by high passenger unit price is continuously excavated, and the sinking market is opened.

"Through such short video platforms as Shuo Yin, those people who were not covered by online education with high customer price are also connected to the network, and their education services have space to play. However, the unit price of their education service products is no longer 10000 yuan, 20 yuan or even 9 yuan / 9 yuan." Li Xue introduced the logic of institutional investment in education MCN to 21st century economic reporter.

At present, the situation of weakening discipline competition and more encouraging quality education is expected to come. The teaching and training industry is facing an unprecedented reshuffle, and under the severe pressure of "double reduction policy", it may be an urgent task to seek a new business model.

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