Going out to sea is becoming the road of self-redemption for the domestic online education industry.

Competition in the domestic market is fierce, the cost of getting customers is high, and increasingly stringent regulatory policies have dimmed the outlook for the industry. In contrast, the huge size of the international market, relatively loose regulation, coupled with the COVID-19 epidemic has given rise to a huge demand for home-based learning, bringing new opportunities for online education companies.

It is nothing new for domestic education companies to go to sea. Since 2017, leading enterprises such as good Future and Yuanfudao have launched overseas layouts one after another, testing the waters in terms of capital, tools, content and services, covering a number of subsections, such as curriculum guidance, language training, and child enlightenment.

At the end of 2018, Haofui acquired CodeMonkey, an Israeli children's programming learning platform, and participated in the C-round financing of Indian K12 tutoring platform Vedantu the following year to enter the Indian market. In addition, the good future will also open a campus in Silicon Valley in the United States to carry out online and offline subject competition training.

Yuanfudao indirectly set up ape India and ape Zhu companies in 2019 to specialize in the Indian market and launched K12 online tutoring platform ODA Class. Li Yong, founder of Yuanfudao, revealed thatODA Class has garnered more than 1 million subscribers within 50 days of its launch.

According to Zhixiang.com, ape India currently has a cumulative total of nearly 200000 paying users, ranking first in India's K12 live tutoring track. Revenue from ape India is estimated to be about $3 million this year and is expected to rise to $20 million next year, according to people familiar with the matter.

The fluency of the language learning track will accelerate localized operations in different parts of the world from 2020. LingoChamp (fluent international version) has supported 8 language versions, including Chinese, Japanese, Korean and so on. In the first quarter of 2021, fluent said that both overseas revenue and paying users grew by 90% month-on-month.

Super Chinese, which was founded in 2018, is an international Chinese online education, first landing in Thailand and other Southeast Asian markets. One investor told the alphabet that the platform had accumulated 4 million users and achieved positive cash flow.

On the children's enlightening track, Baby bus (BabyBus) has focused on going out to sea since 2011. it has released more than 160 APP models and 17 language versions to more than 100 countries and regions around the world. According to the application documents for listing on the Shenzhen Stock Exchange in June this year, Baobao bus has made a profit, with net profits of 111 million yuan in 2018, 267 million yuan in 2019 and 262 million yuan in 20120.

"China's online education has absolute advantages in operation, although it does face a lot of problems in going out to sea, but this is a good starting point. "Wang Xiao (a pseudonym), an investor who has invested in some overseas education projects, told the alphabet list.

In his research, Wang Xiao found that China's online education already has a solid methodology in terms of customer acquisition ability and traffic innovation and transformation, and these methodologies can also help online education companies to expand overseas markets.

Jiao Niantao, vice president of Blue Elephant Capital Investment, said in a recent industry sharing that the domestic online education industry has iterated out relatively mature product forms, such as Taipan online schools and AI courses, the industrial chain is also more deepened and complex, and it is necessary to look for new markets in the current period of policy adjustment.

However, the head online Education Company is also particularly cautious about the layout of overseas markets. Gaotu officials have replied that there are no plans to go to sea at present. However, many investors believe that overseas demand for online education is also on the rise due to the epidemic, which is also a worthwhile path for Chinese online education companies that urgently call for help.

一

During the outbreak, more than 190 countries around the world once implemented a nationwide suspension of classes, affecting nearly 1.6 billion people. But the measure taken by many countries is to "close classes without suspension", and the number of schools and training centres taught by video has surged, resulting in a blowout growth in online education companies.

In addition, many schools, colleges, educational institutions and so on plan to continue the online teaching model of some courses after they plan to return to normal in the future.

Asian countries generally have a social tradition of attaching importance to education, and the market demand for online education is the greatest.When many online education companies expand the international market, they often choose the first stop in Japan and South Korea, India, Southeast Asia and other countries and regions.

The Green Pine Fund is one of the investors in Super Chinese. Xia Tianzhang, a former investment manager, believes that Europe and the United States are not the best choice for K12 online education and should give priority to expanding East and Southeast Asian countries. Considering that Japan and South Korea do a good job in local education and the high cost of obtaining customers, Southeast Asian countries are the most suitable, "especially in India, where there is a great demand for K12, and many giants have already laid out in India. "

Based on this consideration, Super Chinese will focus on Russia, Japan, South Korea and Southeast Asian countries, and has achieved a positive cash flow cycle.

The former head of byte jump's GOGOKID also revealed to the media that byte jump has also made a similar operation gang product in India. Insiders in charge of byte-beating education say India is doing relatively well in the byte-beating overseas education market.

Public data show that there are 260 million K12 students in India and there is a strong demand for out-of-school tutoring. India's online education market has also grown rapidly in recent years. India's education market totaled $100 billion in 2016, growing to $180 billion in 2020, almost double that in 2016, due to the rapid expansion of the digital learning market, according to a market research report.

Even in the United States, which appears to be in low demand for extracurricular tutoring, the situation is changing. Since last year, many online education technology companies have seen a surge in user demand.

San Francisco-based ClassDojo, known as the "children's Zoom", had five times as many users as the previous record in the first week of March last year, and the number of content and communications in each "classroom" increased fourfold.

Outschool, another San Francisco-based education technology start-up that focuses on small online quality education classes, has completed two rounds of financing in the past year and is now the new unicorn in the global education industry, valued at $1.3 billion.

In Jiao Niantao's opinionThe form of online education products in the United States is about the level of China in 2015 and 2016. The advantages of domestic products are obvious, which is also the opportunity for China's online education to go abroad.

In addition, he surveyed the American online education platform and found that there is a widespread need for American students to search for questions and discuss them in the community, which happens to be a strong point of online education in China.

Simon Allen, CEO of McGraw Hill, an American online education platform, has said that the growth of online learning may take at least five years to eliminate the impact of the epidemic, "but now that this is the case, we do not want education to fully return to what it used to be. "

According to research by market research firm docebo, the US online education market will usher in a new period of growth in the next few years, with CAGR (compound annual growth rate) reaching about 7 per cent from 2018 to 2025.

二

Despite the greater market prospects, the way for domestic online education companies to go abroad is far from as easy as they thought.

Tian Yuan, a senior education practitioner, said that although the demand for extracurricular education has always existed, it is difficult for domestic online education companies to achieve local output.

"to take a simple example, the strongest subject in Taiwan is mathematics, physics and chemistry, but how many teachers can teach mathematics and chemistry in multiple languages? Or only for Chinese families, the market will become narrower and the performance-to-price ratio will be much lower. There seems to be a market for going out to sea, but there are too many holes to step on. "said Tian Yuan.

However, Xia Tianzhang, a former investment manager, believes thatTeachers have never been the deficiency of online education in China, and teaching ability can also be improved through short-term training.For example, the good Future has opened offline campuses in the San Francisco area, and some of the teachers are sent directly from the Chinese headquarters and can teach without barriers. "the strength of teachers is unlikely to become an obstacle to online education going out to sea. "

Xia Tianzhang said that in addition to education companies such as Baby bus, which went overseas in the first place, it is safer for other online education companies to invest in going out to sea at this stage. "if you can invest in and acquire local education companies, it will be easier for China to be responsible for supporting the expansion of the market. "

In his view, the way of acquiring musical.ly by byte jump and eventually making TikTok overseas is worth learning. "however, this path can only be achieved by companies that are not short of money and have a long enough management radius, and it is difficult for small and medium-sized companies to succeed. "

Xu Ziwei, a partner of Yuanzhi Capital, believes thatAlthough Chinese online education companies have obvious advantages in user operation, it is difficult to form barriers.This is a difficult problem that needs to be solved for domestic online education to go abroad.

By investing in local giants and going out to sea indirectly, it has always been favored by giants such as Tencent.

For example, Byju's, an Indian online education company, has just completed a new round of financing, valuing it at about $16.5 billion, ranking first among global education companies.

Tencent has participated in two rounds of financing for Byju's. In addition, Tencent also participated in round A financing of Indian photo search platform Doubtnut in February. Tencent's choice to invest in Byju's and Doubtnut is another way to lay out overseas online education tracks.

三

Once glorious K12 online education, under the continuous blow of the heavy fist of supervision, the giant is like walking on thin ice, and it is even more difficult for waist enterprises to survive.

Since the first half of 2021, the major online education companies have been under the storm of public opinion and high-density supervision. The "double reduction" opinions have not been settled for a long time, and regulatory rumors such as "weekends, winter and summer vacations, prohibition of out-of-school training institutions from providing large-scale extracurricular learning and training activities for students" and "online education products at the age of 0-6 will be banned" once made people in the industry panic.

Before the implementation of the policy, the wave of layoffs in online education came first. It was previously reported that VIPKID laid off 50% of its staff without any compensation; Gao Tu, the homework gang, and 51talk successively reported layoffs, and the proportion of high-way layoffs was 30%. The job help suspended the entry of fresh students, and Ninten1 was compensated for layoffs; Pea mind stopped all recruitment.

Online education companies waiting for the policy to land, while feeling the pain of the industry, open the way to survival. A number of practitioners in the education industry said that quality education and adult training will become a new way out of online education.

Yuan Kai is the head of advertising at an adult interest education organization. After getting the data for May and June, Yuan Kai rarely saw an increase in the data before the summer vacation. "originally, May and June were approaching the summer vacation, coupled with 618 e-commerce activities, our advertising work is very difficult to do, this year we have made a budget reduction plan, after all, K12 online Education Company's daily budget is more than our one-month budget. "

Yuan Kai explained that because of policy supervision,K12 online education company has stalled collectively this year, and there has been a significant increase in both the input and conversion rate of adult training.

However, it is not an easy way for online education companies to shift from K12 to adult education.

GE Wenwei, partner of Dowhale Capital, said in an interview with Beijing Business Daily, "although the government currently encourages races such as vocational education, the ceilings in these areas are relatively low. The total capacity and scale that enterprises can do is not the same order of magnitude as K12. Domestic K12 business accounts for 70% and 80% of the entire education track. "

From this point of view, domestic education companies speed up to go out to sea, find a suitable market, and let teachers, products, technology, operation and other capabilities land as soon as possible to meet the huge demand for K12 education. it is obviously much more reliable than turning around 180 degrees and turning to unfamiliar adult education.

Judging from the current situation faced by educational enterprises, Chinese educational enterprises still have a long way to go to sea.However, under the restrictions of intensified domestic regulation, fierce market competition, difficulties in obtaining domestic customers, and peak traffic, exploring a larger-scale way to go to sea is their only way.

At the same time, in the process of exploring the way to go to sea, it still needs a long time to explore and accumulate how to solve the problem of localization, meet the regulatory requirements of various countries, and adapt to the learning habits and education models of local users.