Editor’s note: This article is from WeChat Public Account New Business Intelligence NBT (ID: newbusinesstrend), author Zhu Duji; 36 氪 Published with permission.In response to the call for “suspended classes and unsuspended schools” issued by the Ministry of Education, online education has once again become the focus of the spotlight in this action called “saturated support”.Online education institutions such as Youdao Class, Xueersi Online School, and Ape Coaching have successively opened free online courses to elementary and middle school students nationwide.In addition, the comprehensive video platform represented by Kuaishou, B Station, Douyin, and Tencent Video has launched a content column in a joint agency manner.With the repeated delays in the official start time of various places, in addition to offline education institutions, public school education also has to turn to online.Under the influence of the epidemic and the overall economic depression, online education has shown an upward trend and gained more market confidence.The stock price has become the best proof. After the outbreak, the stocks in online education performed well in the A-share, Hong Kong and US stock markets.In 2020, online education will no doubt continue to receive attention.Education has a counter-cyclical nature, which is more favored in the downward cycle. The extreme situation caused by the epidemic has also accelerated the market’s recognition of online education, which will bring industry-wide benefits.Small and medium-sized offline institutions have been hit hard. In the Chinese education industry, where channels have been scattered for a long time, this may also be the best time for online education to gather power and build brand advantages.New forces continue to flow in, fierce market competition will continue, and for each industry individual, dangers and opportunities exist almost simultaneously.When everyone is in the game, choosing the right path becomes more important.01 | User growth, increased competition According to iResearch’s “2019Q3 China Online Education Industry Data Release Report”, the size of China’s online education market in 2019 is expected to reach 313.36 billion yuan, a year-on-year increase of 24.5%.This momentum is expected to continue.Online education is still concentrated in first- and second-tier cities, and there is still room for market expansion.Five years have passed since the opening of the second child policy, and the first batch of newborns has gradually entered the education stage and has become a potential consumer.In the report, iResearch predicts that the market size growth rate in the next three years will remain between 18-21%.The report judges that the size of China’s online education market will exceed 540 billion yuan by 2022.The outbreak of the epidemic has made the online education industry gain huge traffic exposure in a short time.From January 25th, major online education institutions began to give away free courses in the form of public welfare. Free courses under special circumstances have objectively brought more efficient user growth to the institution.On the day of the broadcast, the number of enrollment for the free live broadcast of the homework class increased by 1.5 million; 4 days after the registration was opened, 470,000 people applied for the free live broadcast of Youdao Quality Class.For reference, previous reports from Netease Technology stated that the enrollment of various online education brands in the summer of 2019 was around 2 million.In the overall education market, online education previously only accounted for about 7% of the market share.The share may have a major breakthrough this year. As public schools begin to use online tools such as Nailin to broadcast live teaching, online education will not only affect the original offline institutional students, but also 200 to 300 million primary and secondary students nationwide.In the coming year, online education will continue to be a hot spot for giants and capital markets to chase.As one of the rigid needs, education has its stability. Despite its long cycle, it is still a worthy investment target.At the same time, the C-based monetization and high customer price make it more robust and healthy in business model, and have the opportunity to become a high-conversion export of massive Internet traffic.BAT’s layout of online education has begun since 2013, mainly in the form of investment.K12 unicorns such as Homework Gang, New Oriental Online, VIPKID and so on all have BAT participation.The favor of the capital market has also created an active entrepreneurial ecosystem.According to the data of Tianyan Inspection, in the past five years, the concentration of online education enterprises appeared, and the number of enterprises established for 1 to 5 years exceeded 130,000, accounting for 58.13%.Since 2018, more new forces have poured into the online education industry, and the way of participation has also shifted from original investment to platform ecological construction and product self-research.ByteDance incubated gogokid, an online English education brand, and announced that it would be used for hardware development in the education field when it acquired some patent use rights of Hammer Technology.At the same time, with pan-knowledge content as the starting point, through a variety of methods such as knowledge payment, IP linkage, community operations, more video platforms such as Kuaishou and B Station have entered the field of online education, and have entered more subdivided categories.The online education market is still growing, leaving room for growth for new forces.But it is undeniable that in English, mathematics and other fields, the head effect is already very obvious.The “Big Data Report on the Online Education Industry 2019” released by Beijing Business Daily in conjunction with Blackboard Insights shows that although the TOP10 financing amount for the education industry in 2019 is all K12 projects, all rounds are also concentrated after the C round.For new players who are eager to try, choice becomes particularly important.02 | Opportunity for inflection point in quality education. In 2019, quality education financing will surpass K12 to become a more concentrated financing segment with more investment companies.Since May, quality education has continuously occupied the top of the monthly financing list, becoming the main target of early education.There are relatively few brands and educational institutions that are beginning to take shape in the field of quality education. Most of the institutions are still in the early stages of development. For investors, they are still in the industry dividend period with a lot of room for improvement in penetration.As a non-examination education, with the continuous improvement of the education level and consumption ability of the new generation of parents, quality education is receiving more and more attention.At the same time, quality education offline institutions are mostly start-up brands, which have limited ability to digest the local market. On the other hand, the epidemic has a huge impact on offline small and medium-sized institutions. Online brands have the opportunity to further gather strength and build their brand leadership.For the quality education industry, which has no absolute leader, this will be an important opportunity for online institutions.As a representative circuit in the field of quality education, children’s programming has been enthusiastically pursued by the capital market in the past two years.The report of the Whale Associate Research Institute shows that 30 programming projects were established in 2017, with 58 financings, totaling more than 1.4 billion.In 2018, capital accelerated the layout of the field of children’s programming, and for a period of time, related companies announced that they had received financing almost every day.Although affected by the cold winter of capital, the children’s programming industry experienced fluctuations in 2019, but still has great potential, and may accelerate again with the online education industry.According to industry statistics and assessments, the current annual growth rate of China’s children’s programming market is in the period of 200-300%.Artificial intelligence is considered to be rebuilding human social relationships and is likely to become the underlying universal language of the next era.The standardization of programming teaching is relatively high.Under the category of quality education, programming has the best chance to enter the college entrance examination system together with mathematics and English, and become a required track.In April 2017, Zhejiang Province introduced a reform plan for education. The new plan incorporated the most commonly used Python language for artificial intelligence into the Zhejiang province college entrance examination.In July 2017, the State Council issued a notice requesting the implementation of a smart education program for all, setting up artificial intelligence-related courses at the elementary and middle school level, and gradually promoting programming education.The Shandong Ministry of Education also added programming content to the sixth grade textbook.For new players, programming education is one of the options to enter the market.A representative example is the cooperation between Miao Xiaocheng and Sanqi Mutual Entertainment.In January 2020, Sanqi Huyu, a game company listed on the A-share market, announced a wholly-owned acquisition of online programming education institution Miao Xiaocheng.Founded in 2017, Miao Xiaocheng covers the learning needs of young children aged 4-18 in the form of live online lectures in small classes. It aims to build the first brand of artificial intelligence education for children.As of December 2019, the number of Miao Xiaocheng students has reached 20,000, and has maintained rapid growth.Based on the main use scenarios of programming, Miao Xiaocheng’s founder Guan Chunhua chose to design courses in the form of small online classes at the beginning. After that, Miao Xiaocheng worked with Silicon Valley artificial intelligence expert Harry Li to design a complete curriculum system, coveringProgramming needs for multiple ages.In response to the needs of graphic programming courses, Miao Xiaocheng re-written scratch and produced a series of animated video content.According to people in the gaming industry, the reason why Sanqi Interactive Entertainment acquired Miao Xiaocheng is because optimistic programming and programming thinking have become an indispensable ability. They believe that programming ability will become just like English.In addition, Sanqi Interactive Entertainment is optimistic about the mode of online education, the combination of the discipline characteristics of programming education and computer, so that the online teaching effect is better.While announcing the wholly-owned acquisition of Miao Xiaocheng, Sanqi Mutual Entertainment also reached an exclusive strategic cooperation with Miao Xiaocheng. In the future, the two parties will achieve maximum synergy and utilization in terms of technology and resources, and polish and upgrade teaching products and services toRefined operation management.The enlightenment of the case is that for the entire online education industry, when the epidemic broke the ceiling of user perception, new competition will not only rely on Internet-style marketing battles. User retention will be the most important issue, and user retentionIt must involve course content, course mode, platform services, etc.How new players entering this field should seize the opportunity will be the focus of whether the entire industry can continue to develop..
100 billion online education track, where are the opportunities for new players
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