Text | Shi An Editor | Li Yang Yuan Hao In the year of the advertising downturn, online education shocked the advertising industry. An industry insider revealed to 36 that the learning and thinking counseling consumed hundreds of millions of yuan in advertising in Tencent and the headlines respectively. Previously, the industry considered the job-free job with the least amount of traffic, and also launched advertisements on multiple platforms. Online education “three major gold masters” advertising every day, an average of 10 million yuan. This summer, the “K12 Online School” war broke out. On June 27th, Xuesi Siwang School held the “49 Yuan Summer Trial Lesson” to start the mobilization meeting, so many senior leaders of the Future Group visited the site to mobilize. “This is the third key battle in the past 17 years of learning and thinking. Just like the fast-paced, Alipay, WeChat, and Moo, this time, we have to follow the guidance and other nine online education companies. Fighting together.” Behind the swearing-in swearing, the combative action of learning and thinking does not seem to keep up with the determination. “This summer enrollment war, learning and thinking may not intend to participate before, until June, it is obviously rushed to fight. The reserve of more than 4,000 full-time tutors, it is difficult to support the large-scale summer large-scale visitors, To this end, Xue Sisi temporarily recruited 1,000 part-time college students, and transferred 100 tutors from Jinan to the Beijing headquarters, two of them a hotel standard room, all in the immediate summer course.” An education company strategy officer told 36氪. Then, a series of “sea, land and air”-style advertising bombing began: offline airports, bus stations, high-speed rail, building advertising, online WeChat friends circle, vibrato, today’s headlines, wide-point, TV drama title. According to reports, the advertising costs of the school and the end of the summer of this year are expected to reach 1 billion yuan. “Study and rushing to recruit and concentrate firepower enrollment may be to block the counseling. In the first half of the year, the good future has been adjusting the organizational structure, which is equivalent to the entire spring enrollment gave the counselor, and waited until the school began to prepare for the summer vacation. The standard of counseling has been completed. According to an education company’s market leader, “The strategy of the school’s launching last year was more radical, but the final promotion conversion rate was less than expected. Many people think that this year should be tightened. As a result, this summer’s summer is not going down, this is too important.” Joining this “arms race” is not only a matter of learning, but also includes nine other online education unicorns in the line of thinking: 猿 counseling , homework help, head 1 to 1 (the head of the class), a technology (together), homework box (small box classroom), VIPKID (bee school), a quality course, penguin counseling, who to learn. For example, the number one of the school’s top-ranking enemies is the one that has been used for the training of the school’s top-notch, and the number of people who have been on the basis of this year’s vibrato has reached one hundred million yuan, plus the online multi-point placement of Guangdiantong, WeChat, and the headline. The enrollment investment ended at a total of 400-500 million yuan. According to incomplete statistics, as of the current summer enrollment war, the total number of online education companies has reached 3 to 4 billion yuan, and the summer enrollment of more than one company, including school and school, counseling, and homework, has exceeded 1 million. The number of people who have studied and thought about the 1-5 grades in the Spring School is over 90%, and the counseling rate is over 80%. This means that since the development of online education, the online renewal rate has been leveled for the first time, and it is also the first time. The total number of students enrolled in the single online education company has exceeded 1 million. The online education company’s “entry course” enrollment as a whole. The scale is almost 10 million times. The overall advertising investment in the summer is close to the sum of the past three years. The online counseling participation rate has started to sprint 10%. A $100 billion online market education company is about to break through. This is in the online education industry and even the whole education. The development of the industry is unprecedented. “After a few years, looking back on this embarrassment, the scale is wide, the intensity is great, and the madness of the launch will leave a lot of color in the history of online education.” One investor commented. Competing for the “100 billion US dollar market value” ticket “This track can support a multi-billion dollar super company.” Among the 36 investors interviewed, they got unanimous judgment. According to the statistics of the Ministry of Education, there are nearly 200 million students in the entire K12 age group. Even if the participation rate is 10% of online education, the number of potential students is at least 20 million.The unit price of the large class is 3,000 yuan / year, with an average of 1.5 courses per person. The annual consumption per person is 4,500 yuan. The market size of the online school class is nearly 100 billion. According to the market-to-sales ratio of the listed education companies, there will be a company with a market value of 100 billion US dollars. The first hurdle of the $100 billion market capitalization is 10 billion in revenue. Learning and thinking about the current revenue and growth rate of the school and the school, the school’s revenue last year was about 3 billion yuan, this year is expected to reach 5-7 billion, next year is expected to achieve 10 billion; The income is about 1.5 billion, but the growth rate of counseling income is faster, about 4 times. According to this development speed, it seems that it is not difficult to reach 10 billion yuan in two or three years. “The big class has the best profit model and financial model in online education.” A secondary market analyst said, “The gross profit of large classes can reach 50%-70%, and the ratio of hard costs to total income is very low. The reduction in customer costs, marginal benefits, and large-scale profitability will be better and better.” He believes that “two key breakthroughs this year are worthy of attention – at least four companies in the summer experience class enrollment number exceeded 100 Tens of thousands of people and 90% of the online renewal rate are flattened. These two data indicators have confirmed the rapid rise of the online education participation rate. The scary aspect of online education is that it is and will accelerate the eclipse. . For a good future (learning from the bottom line), which is still based on offline business, if the online school is not well-fed, the loss will not only be online, but the whole learning. The offline business of learning and thinking will also be eaten by the new online education giant. In the same way, if one of the online education companies becomes a hegemon, it is tantamount to recreating a new billion-dollar education giant and opening a new era after the new East and the future. This is the core of all online education companies willing to be desperate. At the current development speed of online education, the end point does not seem to be far away. The companies that see the trend are rushing into the air: offline, the traditional teaching and training giants have added the “network school” business, so they have the right and left hands on the line. Mutual struggle, with the new Oriental Online “big exchange of blood”, Yu Minhong appointed Sun Dongxu to reorganize the business of the new Oriental network school, the establishment of “Pu Xin Network School” with Park New Education, the establishment of “Giant Network School”, and the establishment of “Flesh Network School”. On the line, VIPKID, which is mainly engaged in children’s English 1V1, started the “bee school”, and the head of the 1V1 online coaching business launched the “master class”, which started with the tool products. The homework box launched the “learning together” online school and the “small box classroom”; the Internet giant’s layout for the online school has already begun. Netease has a “good way”, Tencent’s “penguin coaching”, and byte jumping “Qingbei network school”. “The online school actually entrusted the ‘individuals’ of the online education company,” said one investor. “Everyone is desperately rushing forward. In fact, there is no retreat.” An education investor analyzed, “猿 counseling from the question bank, taking pictures After searching for the title, it took five years to explore the flow of cash flow mode, and finally seized the opportunity of the big class, naturally can not let go. The original business model of homework and homework box has been blocked, the transformation of the class is The only way out; the job-seeking plan will be listed this year and next, requiring more solid revenue data to be worthy of valuation, the online education new policy requirements for teacher qualifications, and a one-to-one platform with tens of thousands of part-time teachers. Companies must think about the path of transformation. VIPKID is gambling on 2020 and going public in 2021. It needs to break new growth outside of one-on-one business.” For online education companies that have been struggling to find ways to monetize and profit, they have already given online education. The company has invested hundreds of millions of dollars in investment institutions, “net school” has become the biggest opportunity in recent years, and may be the only opportunity. Winners eat all over, bend overtaking, or go out K12 subject counseling has a very strong seasonality in market expansion. Summer vacation is the key to getting customers. The growth of users during the summer vacation almost determines the growth trend throughout the year. From a competitive perspective, summer vacation is the only opportunity in the year that can narrow or widen the gap with peers. “There may be a window period this year, there are various variables, but after this year the market pattern may be completely locked, and the summer competition will be very intense.All the unicorns participated in the war. They all got a lot of financing last year. This summer, this beating is good. It is possible to get a new round of financing, and if they lose, they will slowly return to the blood. Either out. An industry insider analyzed that the competition is particularly fierce on the issue of “life” and “death.” Even the founder of a $20 billion market capitalization company needs to personally participate in this battle. And Si has been staring at coaching, from delivery strategies to pricing strategies to service systems. Zhang Bangxin personally bought a summer experience class for counseling, and also took a screenshot of the service process of the tutor to the online school team to personally study the ratio of the tutoring in the vibrato. An industry insider told 36. The previous Internet wars were played according to the “year” and “month”. This year’s online education has reached the level of “days” – the student’s continued rate. The figures are monitored by the hourly electrocardiogram and counted by the number of days. Today, the coaching strategy of releasing the “49 yuan entrance class” will result in a price of 49 yuan for all ten companies tomorrow. The rate of renewal of the school is higher than that of the school. Tomorrow, the renewed reporting rate of high school counseling is anti-learning. In some key data indicators, everyone is fighting for the first. Another education entrepreneur does not agree with the online education “winners take all” view. “Online education and other Internet industries are still different. The platform model is easy to be a big one, but education itself has the attributes of service consumer goods. The network effect is not so big. It is not just a choice. There are many choices for different user needs. Just like you are used to using an Apple phone, but some people love Huawei and OPPO. “Only, education is more cost-effective than general consumer goods, so online education is indeed a highly concentrated 721 industry, can ‘eat meat’, no one wants to ‘drink soup’, but if you drink There is no qualification for the soup, you can only go out. “The above-mentioned entrepreneur said. In any case, the key indicator for determining the summer victory is “promotional conversion rate”. This value, together with the “renewable rate”, is regarded as two “two online education companies”. “Lifeline”. In the summer campaign, “promotional conversion rate” refers to the proportion of low-cost experience classes converted into system class students. At present, the average value of promotion conversion rate in the industry is about 10%-20%. According to the senior business executives of the industry, the promotion conversion rate of the coaching last year was 42%. In the case of 400 million yuan, the 600,000 regular-price students and 1.5 billion yuan of confirmed income were received. The amount of the investment is measured, which means that the number of students in the regular price class will be more than 1 million this year. The promotion conversion rate of the school is about 30% last year. The overall production is less than expected, which means a lot of burning. The money has not been transformed into the corresponding student source. This is also considered to be an important reason for the online school coaching change after the end of the summer vacation. “This year, the ‘lifeline’ of learning and thinking is set at 35%-40%, which will be decided this year. Yes Whether it will repeat the key to repeating the mistakes. According to an insider, “For the data that has just come out, the conversion rate of the first class of 49 yuan class is 10%, which is much lower than expected, but with the real start of the summer, the conversion rate of the remaining five students should be Will rise. “Study and thinking of “10%” may just be a loss of money, the strategy slams other online education companies. But if the online education company that relies on financing, the lifeline is only 10%, or less than 10%, the outcome may be completely different. “What does low conversion rate mean? If you invest 300 million in the summer vacation this year, it only brings 15 million yuan of income, which is equivalent to a blood loss of 200 million. In the autumn, enrollment still needs traffic, and it is impossible to incapable of enrolling students like this. An investor analyzed. In April, May and June, the service was carried out, and in July and August, the service was carried out, and in September, it was transformed. Soon, this half-year-old network school battle was over, and the most crucial two months will be ushered in. At the end of August, it is an important time node for all K12 network schools. It is the time when the summer vacation is finally answered. How many long-term student users after conversion and how much market share they will eat, there will be one The final result. The network school “city gate” closed “K12 network school experienced a long period of five years of stagnation, we see the outbreak of the network school today, in fact, it also means the closure of this track.Whether it is now, or now, it’s too late. “An investor who failed to invest in the online school said that “the god fight” has already raised the cost of the customer to an unprecedented high. A CEO of online quality education told 36 , that the online school snoring allows us to be non-network companies. It’s very painful, advertising prices are rising, and our cost has more than doubled compared to last year. “Why did the sea breeze, the rice counseling, and the classrooms all have different levels of problems in September last year? Because of the study, I thought about investing 700 million yuan in the summer, and bought all the clues in the market. As a result, the cost of one-to-one companies doubled for two consecutive months, and most companies could not help. The overflow rice was taken back to the elite, and the class was taken back and stood up, only the head supported. A senior investor lamented, “There are words in “Three-body”, ‘destroy you have nothing to do with you’. Learning and thinking only need to enroll in those two months, and one-on-one education companies that include other models need long-term enrollment. Learning and thinking can afford an absolutely high customer cost. The online school’s gross profit margin is too high. In fact, even if there is enough financing to come in, Rome can not be built in one day. “The big class model is too complicated and too heavy, and it is difficult to find excellent targets in a short time. “Another investor expressed the same point of view. “The large class has extremely high requirements for teaching and research, teachers, services, and technology. It is the most difficult model for online education. On the other hand, the system The requirements for marketing capabilities are also high, including a set of systems for launching strategies, enrolling strategies, and promoting transformation. Therefore, the network school did not do well and did not do well, only made and could not do. “The outbreak” is over. It seems that there is no new opportunity for the K12 online school. However, there are some opinions that may not be the case. A senior executive who recently left the network school thinks that “when Mobai and ofo hit the bloodstream, Everyone feels that there is no chance of sharing a bicycle. But later, Harrow bicycles broke through from the sinking market and counterattacked the first and second lines, eventually letting the ‘small blue car’ occupy the city and become the last big winner. “Xiamen New Oriental’s secondary school business has a revenue of 500 million yuan a year, but Xiamen’s income from learning and thinking may be only one or two million. Shenzhen Xuesi thinks that there are more than one billion yuan in income every year, but Shenzhen New Oriental is probably only one billion. . The founder of a net school in the sinking market told 36 氪, “For regions outside the first and second lines, the density of the local market is first occupied, and it is difficult to have opportunities in the latter. The ‘Matthew effect’ of the education industry is very strong. . “Another online school entrepreneur also said, “We are not afraid to learn and think, our opponents are more local offline training institutions. Learn and think of millions of low-cost class students of 49 yuan, more of which are directed at learning materials and gift packages, so the conversion rate is not going up, and the price of counseling is cheap, so the conversion effect is better. According to the observations in recent years, we think that the strategy of learning and thinking about the future may be that the first- and second-tier cities are the mainstays of thinking and thinking online, transforming the offline students, sinking the market and learning the network school, and then suppressing the price, and coaching PK. Compared to the burning of money between the first and second-line giants, the sinking market does not seem to rely on “high-altitude and high-altitude.” Returning to the “ground” to get customers, or the unique layout of the guest entrance, has become the way that the successor players are exploring. Entrepreneurs said that to sink the market, they must have the ability to take root. If the financing comes in, it is better to use it for localization enrollment instead of using it to burn money. “Oriental broadcast is an example. An investor told 36 氪, “Relying on the accumulation of the ground experience store in the past few years, Dongfang Youbo has expanded rapidly in the 3rd, 4th and 5th tier cities, along with the next New Oriental online all in online school, and the Oriental Broadcasting is merged. New Oriental Online relies on ” The brand value of New Oriental’s three words in the sinking market, as well as the ability of the East to broadcast the ground, may have opportunities. “One or two lines of hegemony are anxious, and the sinking market is also surging. The high-class classroom, Spark Network School (owned by Spark Education), the flesh network school (under the education of excellence), the salt class, the love summary network school (formerly Chai Sen Physics), the giant network school, Ladder Education, Whale Creek School, Siyue Peiyou… A large number of online school projects rooted in the 3rd, 4th and 5th tier cities are also undergoing fierce “street street fighting”.2019, the war of online education finally burned from 020, online one-on-one to the K12 network school, the year of the group battle, the network car battle, the shared bicycle war today K12 online counseling melee, the Internet industry oligarch war, finally hit Internet education industry. Before the end of this summer, the “lifeline” that promotes conversion rates may be a watershed for testing the summer war, but it will never completely end the battle. Before the participation rate of the entire online education market has reached 10%, the killing of online school giants will continue. The result of this war will also lead to the arrival of a 100 billion market capitalization company. It was a training exercise before last year, and it was a decisive battle at the beginning of this year. This will be a 100-day change in the online education industry, and every day is very “exciting.” The egg at the end of the article was first published in 36氪Pro. 36氪Pro is a 36-inch WeChat public account, focusing on the early venture capital, providing exclusive venture capital projects and news, in-depth trends and wind direction predictions, as well as industry communities, offline salons, and financing services. Scan the following QR code to see the venture capital in the first step. .