9-year-old Chinese girl with fluent English speaking video at the United Nations, boarded Weibo trending, video playback of more than 10 million, related to the topic of the amount of reading up to 2.3 billion in the discussion reached 33,000. On Weibo, netizens in addition to laugh at yourself, not as a child to live outside, more importance online education platform 51Talk (little girl students) discussions, thus 51Talk heat soared.
Rub the heat of 51Talk came the good news.
51Talk 2019 the intersection of Q3 results, its net revenues of 409.2 million yuan and 303.2 million yuan compared with the same period last year, an increase of 35.0%; net loss of 001.8 million yuan, narrowed 97.8% year on year. More importantly, in a non-US GAAP, its online business has one English first profit, net profit of 002.7 million yuan.
Without good news is that attention to enhance revenue growth, significantly reduced net loss, profitable business for the first time, 51Talk this series of good news, still failed to impress investors' hearts. Capital market is beaming 51Talk poured cold water after 51Talk earnings announcement, its shares falling instead of rising, fell 1.54%.
Although in 2019 Q3 earnings report, 51Talk revealed a series of good news, but still a loss conceal. For stumbled into online education cycle of 51Talk difficult to profit, the loss out of the quagmire, attract capital to get the charm seems to have become a difficult task.
Touch the stones
2019 is the first year of the transfer of 4G and 5G, the node is a year of online English.
2013 4G rise, the rapid development of the Internet, online English came into being. Capital poured into this one with the ambition gold market, but with the enthusiasm faded, naked prospectors looked at each other in six years.
Burn fast, difficult to profit, it seems to have become the curse of online English education industry. United States first online education stocks 51Talk, listed more than three years, after several restructuring still failed to achieve profitability.
In 2011, "no, no money, no experience," the "three noes" Huang Jiajia founded 51Talk. With the adventurous spirit of entrepreneurs, Huang Jiajia Xu Xiaoping hailed at the university campus, he just won its first angel investment 51Talk of. Then, 51Talk embarked on the road online adult English education.
When the capital rushed onto the air outlet online adult English education, only to find that not all outlets can spin gold from straw.
In 51Talk prospectus shows that between 2013 to 2015 for three years, its revenue amount was 21.7 million yuan, 52.2 million yuan, 154.7 million yuan. But the rise in revenue, while also expanding loss, and a loss of momentum even far more than revenue. In 2013, 2014 and 2015 51Talk losses were 17.8 million yuan, 111.7 million yuan, 327.1 million yuan.
Ultimately, the reason 51Talk loss has two main aspects.
First, in the flow burn to seize the market frenzy, marketing costs online English training has been increasingly high. Only in 2015, 51Talk marketing costs to reach the 297.3 million yuan, even if 51Talk gross margin has been maintained at between 60% to 70%, but still difficult to profit.
Second, product homogeneity, low user stickiness. The growth rate of online English education market is not as adult children English, plus adult learning languages, mostly on a whim under the urging of anxiety, learning cycle time is short, time is fragmented, diverse learning needs, etc., all affect the adult online renewal retention rate and English education.
Under heavy pressure, 51Talk start the first transition.
Founded in 2014 51Talk YOUTHS utilities sector in 2015, the Youth in on-line courses, K12 as its main business. Open 51Talk K12 era, net revenue growth of macroscopic soaring. 51Talk in net revenue between 2016 to 2018 were 418 million yuan, 8.48 billion yuan, 1.146 billion yuan; respectively year on year growth rate reached 170.4%, 102.9%, 35.1%.
Just K12 track master everywhere. In contrast, there is no particular advantage to rely only 51Talk teenagers English single track, this time 51Talk want to thrust in the arena of battle each other, we must cast another new sword.
Last resort, 51Talk began to transition the second time. 2017 51Talk launched the "HFT Online Private Classes" main push one on one teacher's course in Europe and America, take the high road brand. But this time of transition, not as 51Talk imagined so smoothly. In Q2 2018 earnings, the income HFT Online Private Classes RMB 2751Talk.4 million, accounting for 10.8% 51Talk total revenues; but operating expenses of up to 29.728 million yuan, accounting for 38.8% of total operating loss.
51Talk after seeing the high-end market leads nowhere, like a ton output capacity began to transition the third time. In early 2018 3, 51Talk announced a new strategic layout, 51Talk focused on online YOUTHS English business, the main K12. Meanwhile 51Talk the lower wage costs as the main Philippine teach teachers to low-tier cities for the entrance, opened the mass market.
Sinking line and started to go one-hit Philippines to teach business 51Talk transformation achieved initial success. Gradually narrowed its net loss, net loss for the first three quarters of 2019 points ratio of 059.5 million yuan, 026.7 million yuan, 001.8 million yuan; 55.1% decrease year on year, 60.2%, 97.8%.
Although so far 51Talk failed to make a profit, but its third transformation seems to be more successful than the two previous exploration, constantly releasing positive trend. This time, touching the stones of 51Talk, really be able to cross the river ashore yet?
Delay in profit anxiety
51Talk still at a loss on the eve of the listing, its internal letter issued by founder and CEO Huang Jiajia said after returning to the listing, the listing is only a milestone, 51Talk state is still in business, "we have too many dreams are waiting to achieve."
Yes, 51Talk too many dreams are waiting to realize, while profitable, is one of the dream 51Talk.
Reality is always skinny, three years ago 51Talk market soon, Huang Jiajia had once said:. "If you look at the first quarter operating cash flow tends to break-even, and therefore, 51Talk entire business situation is very healthy," but "breakeven" like a flag, as of 2019 Q3 earnings release, 51Talk still not able to achieve profitability.
In 51Talk 2019 the intersection of Q3 earnings, the net revenues of 409.2 million yuan, an increase of 35%; net loss of 001.8 million yuan, 97.8% decrease year on year; gross profit margin reached 71.7%, up 7.9 percentage points year on year.
A series of more good-looking data, 51Talk the Philippines to teach one amazing business performance. Reported in non-US generally accepted accounting principles, which teach the Philippines one of the first business to achieve profitability, net profit of 002.7 million yuan.
One-man business can be profitable, too little understanding of online education, we can understand that this is not very easy. Over the years, "diseconomies of scale" has been a common problem in one to one online mode, and the results of this 51Talk Philippines to teach one to one business has undoubtedly demonstrated the dawn of profit.
Only a single business profitability and confidence can not stabilize the capital. After 51Talk earnings announcement, falling instead of rising stock prices, was down 1.54%.
The reason, or sales and marketing expenses has been growing. In the first three quarters of 2019, 51Talk sales and marketing expenses, respectively: 186.3 million yuan, 188.4 million yuan, 215.4 million yuan; year on year growth rates: 8.6%, 15.4%, 16.9%.
A result, 51Talk sinking flagship strategy, investment spending huge sums popular variety show, in order to obtain greater flow and establish a good brand image. 51Talk Hunan Satellite TV variety show with multiple launch cooperation, similar to the "every day", "restaurant" and other hit variety. You know, the domestic advertising sponsors cost is not low. Meanwhile, the popular niche Wangjun Kai also invited to serve as its spokesperson, is exacerbated by marketing costs.
Secondly, in addition to advertising, the main means of promotion of online education is the telephone sales, relative to the subsidiary in the Philippines, 51Talk Chinese mainland team mainly in marketing and sales staff based. Thus, 51Talk sales and marketing personnel increased average sales commissions accounted for the bulk of spending, venue rental cost electricity sales team also is no small expenditure.
51Talk listed at the beginning, New Oriental Online COO PAN Xin once said, "High customer price Products have to rely on electricity sales, but over-reliance on electricity sales is really a bottomless pit."
Moreover, the high marketing costs and did not bring the conversion rate to match the 51Talk, there is no guarantee one business can continue to profit.
Online education institutions revenue and strong seasonal fluctuations in the third quarter, just in time for the holidays the students, so the higher student activity. Q3 earnings data in 51Talk show that the number of active students about 25.82 million, an increase of 23%. The next quarter, just in the busy exam period students, for students to learn outside the classroom additional attention will be corresponding decline, 51Talk one business can also be profitable is unknown.
In the earnings conference call on 51Talk the CFO Xu Min said: "Due to seasonal factors, one to one business Non-GAAP net income of our next two quarters may be negative."
Business model plagued by problems, instability of single business profits, capital markets are so 51Talk prohibitive. With respect to the short-lived profit, investors are more inclined to steady. The 51Talk chosen the Philippines to teach youth one on one business, in addition to seeing the benefits it brings the outside, its negative effects can not be ignored.
Philippines to teach business to break the deadlock?
Years his wife boiled woman, 51Talk one of the Philippines to teach youth profitable business for the first time. But, this does not mean that 51Talk won the battle.
51Talk's CEO Huang Jiajia once said: "Education should not be a luxury, 51Talk hope that through the Internet technology to make high-quality educational resources become within reach as long as you are willing to learn English, are able to enjoy affordable prices online teacher. 1-on-1 service. "
It is true that education should not be a luxury. But in Europe and America as a standard online English market, when comparing teachers, Filipino teachers have inevitably lost the "grade."
First, the issue of the plight of the Philippines accented teachers has been around 51Talk.
K12 audience is mainly young people English accent is being formed, whether the parents are the authentic accent of this problem there are some considerations. English is not the native language of the Philippines, and Filipino mastery of English depends on their level of education. Thus, compared to Europe and America, there are more than just teach Philippine accent issues, as well as the use of English to teach the Philippines a more localized, and there are differences between European and American teachers.
Secondly, the quality of Philippine education courses is also problematic uneven. Auditions 51Talk mostly full-time faculty, and to the formal lessons teachers have carried out most of the teaching in itself, the quality of the course is difficult to guarantee. On the platform, a black cat complaints, complaints of 51Talk reached 154, a "false propaganda", "course no guarantee of quality," "provisions of the King" and other words.
Finally, while sales and marketing expenses rising costs 51Talk, teachers costs are on the decrease. Cost of revenues 51Talk in 2019 the first three quarters of earnings, mainly paid to teachers were as follows: 105.7 million yuan, 107.6 million yuan, 116 million yuan; year on year growth rates were: 13.8%, 11.4%, 5.8% . As it can be seen 51Talk limit on the welfare of teachers continue to reduce costs, which will have some impact on the quality of the course.
In addition to the problem of teachers, there are online "one to one" business model malpractice same ills.
One to one business model online business is relatively simple, but want to expand the scale of the problem has become. Mainly because the rate of one to one business model renewals suffering for some time now, the level of renewal rate determines whether a company will have to pay more-acquisition costs. From sales and marketing expenses continue to trend higher costs 51Talk them, you can see its renewal rate is worrisome.
In addition, factors that affect the rate of renewals of major curriculum quality and student needs.
The pros and cons of teachers, affecting the quality of the course content. The ability of teachers to enable students to receive knowledge effectively determines the latter's renewal considerations. Furthermore, students demand also one of renewal rate factors. Children's English language training due to the exam just to be, tend to be easier to renew than many other extra-curricular interest classes tutoring. The online system to teach outside educational institutions, the individual needs of students also need attention.
51Talk the Philippines to teach youth one business, whether it is from the quality of teachers or business models are still some problems. Although its business in 2019 Q3 quarter, few were profitable, but still potential obstacles still can not be ignored. In addition to the plight of internal business Mishap obscure, outside the walls, 51Talk equally uncomfortable.
A wire enemy, three or four lines barriers
From the rise of online education so far has been six years, online YOUTHS subdivision track English side is the winter capital of wait and see, the other side is an increasingly competitive market.
IResearch released the "China online education industry data released report," the data show that online education sector investment dropped significantly, from July 2019 to reduce the 19.5 billion yuan in September of 200 million yuan. And on the track online English education "Matthew Effect" intensified, according to market research of Chinese Academy of Sciences, along with enhance the brand influence, VIPKID accounted for 67.2% market share, 51Talk, vipjr, DaDa other online English education brand to become the first market two echelon.
In the face of strong enemy, known as the "United States of the first online education stocks," 51Talk lost its former elegance.
In respect of financing, under the 2018 market winter, VIPKID completed D + round of financing of $ 500 million; October 2019, Tencent has confirmed that E round of financing investment VIPKID, the two sides continue to expand the depth of cooperation in the field of Internet education, cloud services.
In terms of teachers, while VIPKID flagship North American high-quality teachers, for a second-tier cities more attractive to users. The institute data, the total number of foreign teachers in 2018 VIPKID North America has more than 60,000 people, this figure is much higher than the number of foreign teachers for other platforms.
In terms of size, VIPKID extend from the main children's children to adults, to expand the content of subjects from English to mathematics, language and other subjects just need examination. At the same time on one business model to improve, VIPKID launched a wide range of models in small classes, large classes and other classes. North America, coupled with high-quality teachers multiplayer mode introduced to reduce the average cost of the course participants, the main cost of the 51Talk is a strong threat.
A second-tier face of fierce market competition, 51Talk second best offensive lower-tier cities.
Fortunately, low-tier cities urgent need to develop online education market, to 51Talk brought good news. In 2019 Q3 earnings report, 51TalkCEO Huang Jiajia said: "The third quarter reached a record high, in addition to the reasons of seasonal fluctuations, reflecting the firm implementation of the strategy of sinking revenues and cash net income are expected to exceed the high-end 2.3 guidelines. % and 5.7%, thanks to an increase of 23 per cent of active participants. "
In the town, 51Talk the Philippines to teach courses in relation to European and American foreign teachers to other platforms, it has a price advantage. According to statistics, 51Talk of foreign teachers class average unit price of 40 yuan, which pay more attention to cost-effective for the sinking market, very much in line purchasing needs. Moreover, 51Talk online English education curriculum resources in English than the local resources updated quickly and please the parents favor.
Begun to taste the sweetness of 51Talk, build on the progress we made thousands of city plans, intentions comprehensive coverage to 1,000 cities in 2019. At the same time with the advantage of the Philippines to teach, to strengthen the penetration of the sinking market.
Compared to a second-tier cities become saturated online education market, there is still much room for the four-tier cities 51Talk deployed, but can not avoid impeding education giant's next line.
2014 began to sink layout market New Oriental, and other offline good future education giant, 51Talk not afford to ignore. 2018 fiscal year, New Oriental online urban markets expanded nearly doubled, and rely on the already online under started strengths, New Oriental opened learning centers in more remote cities and the county for local students available for free online courses for the online product guide education flow.
, In addition to affecting the older generation also giants counseling agencies from the local low-tier cities. Compared to online education, education of the line-acquisition costs are much lower, so the local counseling agencies can be at the venue, teaching resources available resources better than online agencies. At the same time line at the local educational institutions, there is a specific office location, easy to get more parents favored the city three or four lines.
Faced with fierce competition in the online education market, a second-tier cities, 51Talk choose another way. But few people go way, also means that more will have to face the unknown. Now 51Talk how open the market sinking, sinking established brand in the market, to break through the walls as well.
Online education another way out: B end and Technology
For a long time online education market directly to the end user is C, to provide goods and services to students, parents and other consumers, including supplementary teaching materials, online training, and so on. And after six years of ups and downs, online education B battlefield extends to the C-terminal end, the C-terminus has become a fight capital of the Red Sea.
After the encounter in the winter capital, it has been difficult to make up the loss of multiple online education platform have fled. First, online English learning platform, "Lang broadcast network" Wages storm; then one on one online tutoring platform to learn tyrants have been discovered cessation of operations; October, known as the "Big Four English training" was established more than 20 years old and training institutions Wiebe English exposure overdue salaries, bankruptcy.
Relative to the C-terminus of the main online educational institutions in perpetuity, B-side online educational institutions will have just emerged.
34 May 2018 cloud conch obtained 15 million yuan Pre-A round of financing; May 2018 Bowflex educational attainment of high thinking education leading tens of millions of A + round of investment. The education industry giants is good for the B-side also lay out online at the future, the introduction of double-school teacher at the same time, proposed To B side business "Future Magic School", in collaboration with local institutions to provide resources.
C end user a low viscosity, higher acquisition costs problem, plaguing each face of the C-terminal online education platform. And now the B-side became remedy another way out of the C-terminal, B-side stability and scale to attract runners who on this track online education.
In 51Talk's official website there are also business partners face end B proposed, such as business-oriented government, schools, and other launch customized English courses. In 2017 Bole meeting, 51Talk good reputation won the "2017 Best Enterprises language class training service providers."
In addition to the B-side blue ocean, 5G development of new technologies, but also to the online education industry provides more possibilities.
Previously, 51Talk to the Shenzhen Institute of Artificial Intelligence Research Institute changed its name to 51Talk education, intended to root out the "AI + education" technology to improve the effectiveness of teaching. Now, 51Talk Intelligent Tutoring has made certain achievements, based on relying on large data base, we developed 51Talk proprietary artificial intelligence technology.
In addition to 51Talk, other online education platform have also coded "AI + education." Such as: iTutorGroup AI research center had been established in 2016; Chief Technology Officer VIPKID of Zhengzai Bin said: AI will be enabling the future development of education. And the emergence of new blue ocean of new technology, provides a new outlet for the online education in 2019 in the capital of struggling to survive the winter.
All in all, more than a loss, difficult to profit online education platform has been a problem, even on the market for many years running 51Talk also failed to stop the bleeding. When the outlet frenzy subsided, the flow is no longer the only factor to compete for victory. Sinking market, B-side blue ocean, the emergence of new technologies, providing endless possibilities for the online education industry. After six years of sedimentation, return to the essence of education, rely on products and technology in order to win this tough battle.
Wen / Liu Kuang public number, ID: liukuang110
