Following the online education financing of nearly 9 billion yuan in the first half of the year, in recent days, one after another online education institutions have received huge financing of over 10 billion yuan.

However, behind the booming online education, there are obvious characteristics of the "three highs" (high valuation, high marketing expenses, and high losses).

How long can the money-burning war model of "financing while losing money" last?

　　Text and picture / Ni Ming, all-media reporter of Guangzhou Daily

　　Symptom 1: Burning money almost half a year, financing nearly 9 billion yuan

　　On October 12th, Luo Jian, CEO of online education company Spark Thinking, revealed in an internal letter that the company had completed the E2 round of 100 million US dollars of financing.

Coincidentally, the head of education has received a new round of more than 400 million US dollars in financing; Ape Guidance is about to complete a new round of 1.2 billion US dollars in financing.

According to the statistics of investment and financing events in the education sector in the first half of the year, in the first half of 2020, there were 38 financing cases in the domestic online education industry, a decrease of 57.3% from the first half of 2019.

However, the total amount of financing has increased by 10.5% year-on-year, reaching 8.967 billion yuan.

At the same time, financing is gradually concentrated in relatively large institutions, and the average value of a single financing is as high as 236 million yuan, the highest in five years.

However, related financial reports show that from March to May 2020, the marketing expenses of Good Future will be US$219.1 million; the marketing expenses of GSX from April to June are RMB 1.21 billion; from April to June, NetEase Youdao’s marketing investment is 450 million. yuan.

　　Chen Xiangdong, founder and CEO of GSX, said in the second quarter earnings call of GSX on September 2 that according to third-party estimates, the number of top 10 online education institutions in the summer market in July and August may exceed 10 billion yuan.

　　Pulse symptom 2: high cost, customer acquisition cost hit a record high

　　In fact, about 70% of enterprises in the entire online education industry are in an embarrassing situation of losing money for years.

First of all, it is difficult to acquire customers. Take New Oriental Online as an example. Even though the parent group New Oriental has always provided network resources, the customer acquisition cost of New Oriental Online, which focuses on directing offline to online, is still high.

According to New Oriental’s fiscal 2020 third quarter financial report, New Oriental’s per capita customer acquisition cost has increased to US$74, a record high.

　　In the summer of 2020, competition in the industry will become fiercer. A large amount of capital and companies have poured into the track. In order to pursue a larger scale and market position, the amount of investment has soared. The price of traffic on external platforms has soared, leading to the industry's investment on external platforms. The cost of acquiring customers has generally risen by 50% or more.

According to industry insiders, this summer, the customer acquisition cost of various companies on external platforms is basically about 3,000 yuan per person, but the customer acquisition cost that this track can bear is about 2,300 yuan per person.

"The current ultra-high customer acquisition cost has overwhelmed some companies."

　　In addition, in the "free first" Internet era, the convenient circulation of information, data, and materials, coupled with people's weak awareness of copyright and knowledge payment, makes it difficult to realize online education traffic and the cycle is lengthened.

Take the established education giant as an example. After a series of cost increases, New Oriental's revenue growth has not been satisfactory.

　　The revenue growth rate of New Oriental from 2015 to 2019 was 9.47%, 18.57%, 21.72%, 36.01%, and 26.52%, respectively. In contrast, the revenue growth rate of the old rival's good future is slightly better, from 2015 to 2019 Good year's future revenue growth rates were 38.52%, 42.86%, 68.62%, 64.42% and 49.44%.

　　Pulse symptom 3: The market is fragmented and there are few black technologies

　　The research team of the Chinese Academy of Sciences combined with data analysis and forecasts issued by multiple institutions. The market size of the entire online education industry in 2022 will exceed 540 billion yuan; of which K12 online education, as an important branch, will exceed 150 billion yuan in 2022.

In the next few years, China's online education market will maintain a steady growth momentum.

As giants such as Tencent, Ali, Baidu, and Toutiao have stepped up, Internet education has once again been pushed into the limelight.

　　But why is it difficult for the online education industry to monopolize or form an oligarch?

The reporter learned that the non-standardized educational services, the localization of educational resources, and the low barriers to entry into the industry are particularly obvious in the K12 extracurricular education track.

The biggest challenge facing online education is not the battle of offline training institutions, but the filling of teaching models and educational resources for a province or even a place.

According to the data disclosed in the financial report, internal letter, and financing news of Good Future, New Oriental Online, GSX, NetEase Youdao, Together Education, Ape Coaching, Homework Help, etc., K12 online education will be the regular price during the summer period of 2020. Nearly 9 million people are enrolled in the class.

According to the "Statistical Bulletin of National Education Development in 2019" published in May this year, there are a total of 193.83 million K12 students.

In the end, only 4.6% of users who signed up for regular courses to participate in K12 online education.

　　In this regard, Mr. Pan, a parent of elementary school students who signed up for multiple online courses for their children, said: The current online personalized tutoring model is only a rudimentary form. It only moves traditional training online to shorten the distance between users and teaching and use voice and video calls. To complete counseling and other means, it is difficult to truly reach a targeted solution to the differences in educational examinations in different regions.

　　Some analysts believe that in the short term, the epidemic has brought online education into flames, which is a huge dividend for the entire education industry. However, in the medium and long term, whether online education services can do well will largely depend on Its own teaching quality and teaching mode; whether it can achieve user retention depends mainly on the teacher's teaching level and course quality.

On the other hand, artificial intelligence, big data, etc. are used in teaching, aiming at the different performances of each student, especially learning weaknesses, error-prone questions, etc., relying on the network anytime, anywhere and large teachers to accurately match. Provide more precise and personalized counseling, and gradually form a consistent after-school counseling "accompaniment" from elementary school to high school.