Benefiting from the second-child policy and consumption upgrades, the family preschool education consumer market is expected to reach a scale of 590 billion yuan in 2020. There are few sub-sectors that can be compared.
Of course, there are many diners in such a large market. In response to different market needs, everyone is distributed in different positions in the preschool education industry chain, and the living conditions are also uneven. Today we are here to send warmth and pay attention to the "vulnerable groups" in the preschool education industry.
The preschool education market is big, some people eat meat and others drink soup
There are many business forms in the preschool education market, such as kindergartens, early education centers, training institutions, and content providers including play teaching aids/books/audiovisual/online content, etc.
The best lives are kindergartens, early education centers, and training institutions. These three offline service products account for 50% of the total market share and are meat-eating. Offline fixed places, fixed learning hours, supporting teaching service personnel...These investments are relatively high, and correspondingly, the income of these services is also the highest. Among them, kindergartens have the largest income.
If you want to enter the kindergarten market and start a business, a large investment of several million is a visible hard threshold, while various types of approval certificates and multi-line trivial operations are an invisible psychological threshold. Even after the life and death period and enter the stage of continuous large-scale development, the pressure will still be great. Regardless of whether you choose to join or directly operate, the requirements behind each path for entrepreneurs' resource capabilities, business sense, and management capabilities will only be higher and will not be relaxed. But these can't stop players from entering the arena, and there is business where there is demand.
Around the above-mentioned local tyrants who eat meat, especially kindergartens, interesting new businesses have gradually emerged in the market, attracting a number of traditional transformation enterprises or software service providers to join. For example, equipment suppliers such as interactive whiteboards, management software providers such as Jiayuan Interactive and video surveillance, and software and hardware integration platforms such as teaching boxes. Relying on the national market size of 240,000+ kindergartens, coupled with their own sturdy BD capabilities and competitive products, some companies have developed well. Some companies used the Internet concept to cut traffic and user cards, and successfully attracted the attention of capital and raised money. This batch is not bad, it's a bit of a bone.
Further down is the preschool education content provider. From organization to software and hardware, and then to content, they are the most downstream; but for users, they are the most upstream. The content provider stands at such an important connection point and has a heavy responsibility, but life is much harder than the above two roles, and it can only be regarded as a soup in comparison. They are our warm objects.
Let's take a look at the industry chain of online content in preschool education
Content-based products, including play teaching aids/books/audiovisual/online content products. Among them, books, audio and video are more traditional and mature, with a single form of expression, which can be purchased by parents for children to use. This kind of products has 2B and 2C in the market channel, the industry chain is mature, and the barriers to entry are also high.
Online content products are distributed through PC and mobile APPs, which combine text, pictures, video, human-computer interaction and other technologies in form, and the user experience can be very good. On the user side, parents’ education levels have greatly improved, mobile phone/tablet penetration rates are high, and users’ payment habits for online education have gradually formed. The overall condition is very good.
In the 2B direction, through the establishment of IP, the company will encapsulate educational content products and package them for sale to kindergartens, early education centers and other institutions for teaching use. In the 2C direction, companies will develop a system of preschool courses around the content and provide them to parents; they will even independently or authorize the production of offline derivative products, such as toys, publications, etc., to obtain corresponding sales income around animation IP.
It seems that online content products are more suitable for entrepreneurs who have a sense of Internet products and understand technology. But how far you can go depends on whether the product is well done, whether the operation can keep up, and whether you can dive down and continue research.
The survival challenge of online content in preschool education
From this picture, we can see that companies that do products such as publications and teaching aids will choose 2B, 2C, or 2B2C based on their product characteristics. Animation and early education apps mostly choose direct 2C mode. It seems that there are many roads, but it may not be easy to walk.
1. Is kindergarten the best sales channel?
In theory, it is a good channel. Children spend an average of 10 hours in kindergarten. In addition to eating and drinking, teachers need a lot of teaching materials, teaching aids, and multimedia content to assist in activities such as habit formation and knowledge learning. But in the seemingly large field of publications, only large companies like Pearson have a sufficiently high market share. This is the result of their years of intensive service in the Chinese market.
why? Because for startups, the first thing to face is the BD challenge. There are 240,000 kindergartens across the country, and the market is extremely fragmented. In front of kindergarten customers, even if they sell dozens of dollars of textbooks, without strong BD and service capabilities, it is difficult to open the situation. Secondly, the product is also a challenge. Pearsons have a large resource library and a very rich product matrix, but it is difficult for startups to cover such a wide range of product types.
In addition, there is the challenge of service cost. There is a story like this: A few years ago, a foreign multimedia content brand sold products to kindergartens through an agent, and the sales were good, but it took a year to return home. The reason is simple: one day, a kindergarten in a certain county in Heilongjiang called and said that there was a problem with the software. As a result, the company sent maintenance personnel from Shanghai to Harbin by plane, and then backed up the train and car. After a day and a half to the kindergarten, it was discovered that it was just a plug-in. There is a problem with the board. A set of software sells for hundreds of dollars, and the travel expenses caused by maintenance cost thousands of dollars. This operating cost is unimaginable. Don't ask me "Why don't you call?" "Why don't you take pictures or take screenshots for remote guidance?"...Not all kindergarten teachers in all parts of China can operate the Internet or computers as proficiently as you.
Therefore, when you decide to sell products to kindergartens, you have to figure out which kind of kindergarten you are targeting, high-end, mid-end, or low-end? What is their inherent teaching system? Is your product applicable? Can follow-up service maintenance be guaranteed?
2. Are the software and hardware products in the kindergarten a good channel?
The above mentioned products and services such as Homeland Interaction and Video Surveillance, which entered the kindergarten market with the concept of the Internet. In theory, these companies have a large number of accurate users and are the best partners for content producers. But in reality, real data is often puzzling. Like one of the largest preschool education cloud platforms in China, it provides kindergartens with cloud office systems, multimedia teaching resources, and child (and parent) file management systems, and has 170,000+ kindergarten customers. But its platform has only 2 million daily activities. If it is configured with 150 students in a kindergarten, it is equivalent to less than 10 people in each kindergarten every day.
There are users but not active. One reason may be that the information obtained by these software is very limited. Because from the kindergarten's standpoint, it will naturally avoid too much data leakage, and only provide user registration information. It may also be due to the usage habits of kindergarten teachers. If the product becomes a burden, no one wants to use it. In any case, as long as the user activity is not high, it is difficult for the product to collect information, and it is impossible to explore more monetization methods in the business model.
Therefore, it is actually difficult for content entrepreneurs to use hardware or saas software as channels. Anyway, who wants to become a channel, right? Not to mention that these hardware and software still want to make their own content. Secondly, although users overlap, your product concept still needs parental approval and needs to be transformed. The concept of online education is relatively open and there are many choices. Not every parent can accept your concept. Therefore, the cost of online content product conversion and education on channels is not low.
3. Can the customer acquisition cost of 2C be reduced?
The C-end customer acquisition cost is high, the reason behind it is the low conversion rate, and the low conversion rate is because the user's decision-making threshold is high. In the field of early education, parents’ consumer demand is strong, but they have their own standards when making decisions-some parents rely on feelings, some look at results, some look at mood, and some look at word of mouth. In short, parents have many considerations: in addition to the price, the time spent on learning, the opportunity cost of making trade-offs, the expectations for the effect, and so on.
In order to increase user conversion, some people choose hardware vendors as channels. As mentioned above, conversion is not optimistic. In addition, as a channel, if it is only a cooperation of selling traffic, I am afraid that no one is willing to cooperate. Others choose online channels, spend money to find big Vs, and do free products to drive traffic, but when converting to paid, it is very difficult to operate, and many companies are also stuck at this step.
This is why, Kuxue Dona, a subsidiary of New Oriental Online, is still in the early stages of commercialization. It still does not directly hit the C-end user market, and mainly obtains revenue through licensing the downstream B-end brand and sales of the B-end.
To monetize content, operation is the key!
Preschool online education can be benchmarked against K12 online education . K12 online education has gone through three stages of development:
1.0 Era: Mainly based on recording and broadcasting videos of famous schools and teachers.
2.0 Era: Teachers and students can realize remote interaction through live broadcast technology, but the live broadcast platform lacks the support of the corresponding curriculum system, and the teaching effect is difficult to guarantee.
3.0 Era: While establishing one-to-many live courses, focus on services such as in-class tutoring, parent communication, and after-school supervision.
It can be seen that even for relatively standard and systematic courses like K12, operations and services are not sloppy. What's more, early childhood education is a stage of preschool education, and the products themselves are difficult to standardize. The service targets are both children and parents, and the interests and satisfaction of the two parties are very different. Coupled with the online service form, it is difficult to succeed without relying on warm operations and continuous understanding of user needs.
In the field of language learning, I saw two products with operational thinking, one of which is "Chiliquala" for children. Its main course has four stages, each stage is sold separately, and the price is less than 80 yuan. Other high-quality courses are free, but you need to share products to unlock them. There is also the "English Fluent Speaking" that has just been funded. It can be said that it has spent a lot of effort in operation: building groups, grouping language partners, and class teachers watching the progress of learning... The effect of operation is also as high as this product. The reason for the 8% payment rate.
To answer the third question above: I am afraid that only by continuously improving the products, focusing on operations, maximizing word-of-mouth, and increasing the renewal rate, can the initial customer acquisition cost be reduced. This is also a long-term solution.
Online education in the preschool education market is a major trend, and there must be a future. Everyone must hold on. Everyone who knows how to eat it—the soup is more expensive than meat.