After the "double reduction", entering school has become an important direction of the transformation of education companies, especially the after-school services generally carried out in primary and secondary schools, which provides a huge imagination space.
Recently, educational information companies have appeared in the after-school service market. Iflytek Co.Ltd(002230) recently disclosed that its comprehensive after-school service solution has covered more than 2000 schools in more than 160 districts and counties across the country.
Why do educational information companies that provide hardware and system services start to develop courses and provide educational services? Is this a reasonable business model with input-output ratio?
A noteworthy trend is that recently, after-school service policies have been issued one after another. After school service is recognized as a public service of public welfare and inclusive, and it is even explicitly required to be non-profit. What impact does this have on the education giants who focus on the after-school service cake?
Public welfare inclusive attribute
The after-school service policy is becoming more and more perfect. The content of market characterization and supervision will directly determine whether the business model is established.
At present, Jiangsu, Zhejiang and other places have made it clear that the nature of after-school services is non basic public services. according to the public service plan for the 14th five year plan recently issued, non basic public services are public services necessary to meet citizens' higher-level needs and ensure the overall welfare level of society, but the spontaneous supply of the market is insufficient. The government increases service supply and improves service quality by supporting public welfare social institutions or market subjects, We will promote the inclusive development of non basic public services in key areas, so that most citizens can enjoy them at affordable prices.
This means that non basic public services are allowed to be provided by market subjects, but they should reflect the universality of public welfare.
the resulting market advantage is that after-school services allow market-oriented supply and sufficient funds. taking the implementation opinions on further improving the after-school service of compulsory education in Zhejiang Province as an example, the opinions encourage all localities to explore and improve the cost sharing mechanism combining financial subsidies and service charges. At present, financial subsidies are the main body of after-school service funds, and even some places are completely subsidized by financial subsidies.
however, there is little profit margin for after-school services. Shandong Province recently stipulated that after-school service charges no more than 3 yuan per student per class hour for rural schools and no more than 3.5 yuan for other schools. Xining, Qinghai stipulates that it is 1.7 yuan per student per hour.
Fujian Province stipulates that after-school service charges in the stage of compulsory education shall be subject to government pricing management, and the specific standards shall be formulated by the municipal and county (District) governments.
Guangzhou Municipal Bureau of Education recently issued a notice that no unit or individual is allowed to carry out after-school services for profit, and encourages society to donate funds to support after-school services.
Obviously, after-school service will not become a market for excessive capital profit like after-school training.
Curriculum development of educational informatization company
While implementing the policy, education companies have also successively entered the after-school service market.
Ape tutor launched to B brand flying elephant planet in October 2021. At present, the "flying elephant double teacher quality class" launched by flying elephant planet claims to be the largest one-stop quality education after-school service platform in China, covering dozens of courses such as go, architecture, calligraphy, magic cube and machinery.
At present, the flying elephant double teacher quality class has been carried out in schools in more than 20 provinces and cities such as Beijing, Shanghai, Jiangsu, Shandong and Henan.
A-share listed company Doushen(Beijing) Education&Technology Inc(300010) (SZ: 300010) launched high-quality course content to enter the after-school delay service business at the end of 2020. At present, it has not disclosed its performance. Previously, it announced that the contribution of this part of business revenue is expected to gradually increase from 2021.
The orientation of after-school service is public welfare and inclusive, which poses a challenge to the business of these education companies. Most of these education giants who carry out after-school services have not abandoned their original to C business.
"To C business emphasizes rapid product iteration and user experience, while to B business emphasizes small profits and quick turnover. The logic of the two is completely different." An education industry source said.
originally, it was an ideal model to guide to C business by accumulating word-of-mouth and users through after-school services, but it will be strictly supervised in the future. the Guangzhou Municipal Bureau of education immediately notified that the qualification for admission to the school will be resolutely cancelled for the third-party social institutions that maliciously solicit students in the school.
However, new entrants continue to emerge in after-school services. A new group is the education information company. Iflytek Co.Ltd(002230) recently disclosed that its comprehensive after-school service solution has covered more than 2000 schools in more than 160 districts and counties across the country.
Iflytek Co.Ltd(002230) the after-school service management platform for primary and secondary schools was released in October 2021. Its products include intelligent course scheduling, data management, fund custody, comprehensive quality evaluation, etc. It can be found that this set of products is actually an extension of Iflytek Co.Ltd(002230) intelligent education products in the field of after-school services.
At the first Summit Forum on high-quality development of after-school service held on January 10, Iflytek Co.Ltd(002230) vice president and chief scientist of Educational Technology Wang Shijin introduced that more than 1000 students of Dongguan primary school in Changzhi City, Shanxi Province have more than 100 after-school service courses. There are some problems in course scheduling, such as how to solve the conflict between time, venue and teachers. In the past, it used to take three experienced teachers two weeks to arrange classes. Based on Intelligent course scheduling technology and class sorting engine, it can now be completed with one click.
For another example, in the homework guidance link of after-school service, the Iflytek Co.Ltd(002230) individualized teaching system can be applied to arrange and correct homework hierarchically.
Surprisingly, Iflytek Co.Ltd(002230) also started the curriculum R & D business of the education company. At present, including self-study and third-party courses, Iflytek Co.Ltd(002230) after class service management platform provides hundreds of courses.
Li Xiaofeng, general manager of after-school service business department of Iflytek Co.Ltd(002230) education business group, told the 21st Century Business Herald that the number of self-developed courses of Iflytek Co.Ltd(002230) was strictly controlled, with a total of no more than 20.
" Iflytek Co.Ltd(002230) 's self-developed courses are strongly related to its own resources and advantages. For example, Iflytek Co.Ltd(002230) has previously jointly published artificial intelligence textbooks. At present, calligraphy courses and golf courses have been launched in combination with artificial intelligence technology." Li Xiaofeng said.
However, when Jiang Tao, Secretary of the board of directors of Iflytek Co.Ltd(002230) participated in the investor interaction in October 2021, he said that the after-school service business will not form a large revenue in a short time, "because it has a process of exploration. Of course, there is a lot of room for the continuous operation of this platform in the future".
Li Xiaofeng told the 21st Century Business Herald that " Iflytek Co.Ltd(002230) smart education is mainly for primary and secondary schools. After class service is a natural adjustment with the changes of customer needs. Internally, it is a more efficient reuse of the education business team."
Advantages and disadvantages of after-school service market
Iflytek Co.Ltd(002230) is not the only educational information company to enter after-school service. Another A-share listed company Hitevision Co.Ltd(002955) (SZ: 002955) also launched after-school service courses.
Hitevision Co.Ltd(002955) is mainly engaged in hardware such as intelligent large screen, but public information shows that Hitevision Co.Ltd(002955) has organized nearly 200 R & D teams, nearly 100 course centers and nearly 100 operation teams, and launched after-school service management platforms, courses and training operation services.
An education informatization company engaged in after-school service manager told the 21st Century Business Herald, "at present, there are at least 20 or 30 education informatization companies entering after-school service."
although the overall education informatization market is growing rapidly, some market segments have peaked. for example, on January 10, Sichuan relief and development fund completed the transfer of 7.3632 million Chengdu Jafaantai Education Technology Co.Ltd(300559) (SZ: 300559) shares, accounting for 1.88% of the total share capital of the latter. Chengdu Jafaantai Education Technology Co.Ltd(300559) is mainly engaged in smart examination business, but with the construction of standardized examination rooms approaching saturation in recent years, this market segment has little space.
some educational information services have been eliminated with the progress of technology. Shenzhen Municipal Bureau of Education decided that from the autumn of 2021, the digital resources supporting primary and secondary school textbooks will no longer use CD-ROM, which reduced the revenue of Shenzhen Kingsun Science & Technology Co.Ltd(300235) (SZ: 300235) by nearly 6 million yuan, accounting for 6.7% of its total revenue in the first three quarters of 2021.
"The coverage of some educational hardware has been basically saturated, and the future market space is mainly the replacement of old products." These people said. For example, the intelligent interactive display products produced by Hitevision Co.Ltd(002955) have entered more than 2.2 million classrooms across the country. However, in just over 20 years, educational large screen products have iterated from electronic whiteboard to intelligent large screen, and will continue to iterate in the future, so as to create a new market.
Although the market is saturated, the education informatization company has established a complete marketing channel. For example, Iflytek Co.Ltd(002230) smart education business has covered more than 50000 schools across the country, distributed in all provinces, which provides a huge sales network for after-school services.
"Now that so many educational information companies enter after-school service, they see the synergy between after-school service and the main business of information technology. Accumulating public praise through the new business of after-school service is also conducive to the sales of the main business." The above education information company is engaged in after-school service, said the manager.
The source said, but it is unlikely to sell the hardware to the after-school service market, "such as smart tablets, smart pens and other devices, which are often thousands of yuan, and there is not so much money for after-school services. Its use scenario is also more suitable for before and during class, rather than after class."
"As a low profit market, after-school service is not suitable for third-party institutions to organize teachers to enter schools, so now education giants basically only export courses, and localized small and medium-sized institutions export teachers and operations." "Even if the profits are meager, if the after-school service courses are copied on a large scale, there will be large institutions with billions of revenue in 3-5 years," the person said
