After Tal'S Rapid Advance Against The Trend: Offline Expansion, Big Class Online School "Two Carriages" Encounter Sniping

In 2020, the education and training industry will be severely damaged by the epidemic situation, but tal, a traditional education giant, will grow against the trend and grow rapidly. Recently, tal's unaudited annual report for fiscal year 2021 (March 2020 to February 2021) released recently shows that net income in this fiscal year increased by 37.3% year-on-year.

It stands out in the education and training industry. The 21st century economic report found that the average growth rate of New Oriental in the same period was only 7.2%, while the revenue of K12 training institutions such as Puxin education and excellence education showed negative growth, which were - 6.44% and - 7.9% respectively.

Tal's growth against the trend, on the one hand, benefited from the expansion of offline teaching points after the stable epidemic prevention and control, on the other hand, benefited from the rapid growth of XRS online school.

However, in 2021, tal's offline expansion and big class online school are both under attack. In the increasingly fierce out of school training and renovation, tal has become the most easily exposed target, while online education industry rivals have explored the local network. After class, the clear division of labor between the internal XRS online school and XRS online has made XRS online slightly embarrassed.

Wind vane of industry renovation

On May 5, Chongqing issued a notice on the problems of out of school training institutions, such as over standard advanced training and illegal charges. The campuses of 18 discipline off campus training institutions, including Chongqing XRS and New Oriental, were named.

Among them, Chongqing XRS was informed that some courses exceeded the standard and advanced training; The new students are charged in advance and overdue; They are suspected of false publicity, false advertising and other illegal activities by using students to enter famous schools for publicity. In addition, aizhikang, a K12 one-to-one organization under tal, was also reported to have exceeded the standard in advance of training.

The Chongqing renovation is a thunderbolt. On April 20, this year, some people complained publicly on the website of Chongqing Municipal Education Commission that "XRS is ahead of the program and tells primary school students about junior high school content", even "causing parents' anger".

On April 26, Chongqing Municipal Education Commission replied that in response to the complaints and reports from the masses, the Municipal Education Commission issued the "urgent notice on the education, teaching and charging behavior of XRS" in time, and instructed the education administrative departments of 14 districts and counties to immediately transfer or employ subject teachers, teaching and research personnel, and district supervisors, and set up audit expert teams to enter XRS schools. It is required to check the teaching materials carefully according to the contents of complaints and reports, interview the school principals, teachers' representatives and student representatives, spot check teachers' teaching plans and students' training notes, and check the contents of complaints and reports accurately. On May 5, the results were announced.

Chongqing XRS staff told the 21st century economic report on May 6 that it would seriously implement the education committee's circular opinions, which will not affect the normal class of students at present.

This is just the latest violation of the notification. The Beijing Municipal Education Commission reported on February 26 that Jiuxianqiao campus, an educational institution of XRS in Chaoyang District, failed to suspend offline training and collective activities as required. On April 23, XRS online school was informed by the Beijing Municipal Education Commission for its problems such as full sale of autumn courses on its website and app, illegal admission fees in advance, misleading students to sign up for payment with improper language, and some live broadcast courses ended later than 21:00. On April 25, XRS was fined 500000 yuan by Beijing market supervision bureau for illegal pricing and false publicity.

The 21st century business reporter found that recently, XRS online school and other online education institutions have completely removed the curriculum for preschool children. On the morning of April 27, the customer service of XRS online school said, "after receiving the notice, we immediately launched a comprehensive verification, suspended the sale of all pre-school courses at the first time, and strictly carried out compliance review according to the latest requirements. We will launch courses that meet the policy requirements as soon as the review is over. "

The Ministry of education's "guidance on vigorously promoting the scientific connection between kindergartens and primary schools" proposes that the education department should, according to relevant clues, seriously investigate and blacklist the off-school training institutions that receive pre-school children's illegal training.

The reporter also found that at present, many places are still receiving pre-school students from small classes to large classes after work, and the online courses also stratified the students. A XRS customer service told the reporter, "sign up for the summer class of kindergarten class, you don't need to report the course of connection between kindergarten and primary school."

As the leader of K12 off campus training industry, xrs-peiyou has always been regarded as the wind vane of the industry renovation, and the first tier cities where XRS focuses on training institutions have more efforts to rectify off campus training institutions than other regions.

As of February 2020, tal has entered 69 cities in China, but the number of learning centers in Beijing, Nanjing, Shanghai, Shenzhen and Guangzhou accounts for 49% of the total number of learning centers in China.

Take Chongqing XRS, which has just been announced, as an example, as of February 2020, tal has set up 30 learning centers, ranking 10th in China. But in this summer vacation, XRS will add 10 learning centers.

Tal has 146 learning centers in Beijing in fiscal year 2020. However, as of May this year, only four learning centers of XRS were approved to resume offline teaching.

Local online courses promote offline distribution

In the just concluded fourth quarter of fiscal year 2021 (as of February 28, 2021), tal's XRS peyou's net revenue increased by 43%, surpassing the previous 32% forecast. The important reason for the growth is that XRS local online courses have achieved a growth of 140%.

XRS local online course is operated by XRS Peiyou team, formerly XRS online. It is only opened in cities where XRS has laid out its offline courses. It was originally designed to realize online learning for offline students, which also means that although only four learning centers in Beijing have been approved to resume offline courses, it does not prevent students from learning and registering online.

XRS local online course is divided into online large class and online small class. The capacity of large class is more than 100, and the capacity of small class is about 20 people. The teaching content and main teachers are the same as those of online off-duty.

"There are more than 30 provinces in China, and the learning situation in different regions is localized. If you want to help students achieve better results in a shorter period of time, make sure that the content they teach is what they need. This means that the teaching content must be localized. Localized teaching content means different versions of textbooks, difficulty and teaching progress. " Tal CFO Luo Rong said at the fourth quarter financial report of fiscal year 2021.

Setting up local online courses in cities with mature distribution also frees up more resources for tal to enter new cities. In fiscal year 2021, tal has entered 40 new cities and has opened a total of 1098 learning centers in 110 cities.

"Technology allows us to move part of our teaching work to the Internet, making classes more flexible and expanding our business faster, and providing high-quality services to more users outside the first tier cities. At present, we operate in 110 cities, and more students will enjoy our services in the future. The integration of online and offline services will encounter many difficulties and challenges, which may take five years or more to fully realize. " Luo Rong said.

The significance of local online courses is that they share offline traffic with face-to-face classes, and do not need expensive network delivery, thus greatly reducing the cost of acquiring customers. The above Chongqing XRS staff told reporters, "the price of small class of XRS local online course is the same as that of face-to-face class, and the price of large class is slightly lower, with a unit price of about 150 yuan."

How to position XRS online school

The growth of XRS online school is the most eye-catching part of Tal's financial report. In the fourth quarter of fiscal year 2021, the net revenue of XRS online school increased by 115% year-on-year, exceeding the previous 76% forecast. The number of long-term positive price courses reached 3.5 million, with a year-on-year increase of 71%.

XRS online school is an online live broadcast large class business. In the fourth quarter of fiscal year 2021, its revenue and person times accounted for the highest proportion in tal's total business, which were 32% and 53% respectively.

This growth and scale allow XRS to continue to compete with online education institutions such as ape tutoring, homework help live classes, and gaotu classroom.

But the growth of XRS online school has paid a heavy price. In fiscal year 2021, tal's marketing expenses were as high as US $1.68 billion, an increase of 97% over the same period of last year, which directly resulted in a net loss of $116 million. Last winter vacation, XRS online school, little monkey enlightenment, title shooting of the advertisement "three arrows at once", signed Deng Chao, Sun Li, Shen Teng three star spokesmen, naturally expensive.

However, the huge losses can only be placed in the second place of strategy in terms of scale growth. What supports "burning money" is the financing capacity of online education institutions. At the beginning of 2021, tal completed the financing of US $4.8 billion twice.

XRS online schools must grow. Over the past few years, it has been hit hard by ape coaching. According to the report released by the Key Laboratory of big data mining and knowledge management of Chinese Academy of Sciences in January this year, the monthly revenue of ape guidance online course and zebra AI course is 2 billion yuan. It is estimated that the cash income will exceed 20 billion yuan in 2020, and the total number of users of positive price courses will be 4.02 million.

The growth of online education industry is very homogeneous, which shows that it relies heavily on advertising. Under the background of stricter supervision, advertising delivery is facing industry interruption, which makes industry players seize the final dividend.

"If the policy has an impact on advertising and the online market, we will take the same approach as our competitors in the industry, but now we need to wait for a clear policy," tal CFO Luo Rong said at the fourth quarter financial report of fiscal 2021

But the industry itself is changing. Ape guidance, homework help live class, gaotu class and other institutions have begun to explore local online classes. Taking the summer vacation course of mathematics in junior high school as an example, XRS online school provides two kinds of teaching materials, namely, people's education press and Beijing Normal University Edition, but homework help live class also provides two kinds of local teaching materials, Jiangsu Education Press and Zhejiang Education Press.

In particular, the online education giant's local online courses have all selected the first tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen for pilot projects. Gaotu classroom has been selected in Jiangsu, Zhejiang, Guangdong, Beijing and other places. Ape counseling will be carried out in Beijing, Shanghai and Shenzhen in May. These areas are the base of XRS Peiyou and XRS local online courses. It can be predicted that online education giants will set off a battle for offline traffic.

But in this war, the status of XRS online school is slightly embarrassed“ The target market of XRS local online course is different from that of XRS online school. The main market of XRS online course is 110 cities that XRS has entered, while XRS online school faces the whole country and covers a wider range. " Luo Rong said.

Regarding the future division of labor and cooperation, Luo Rong only mentioned that "the two are shared in terms of technical resources and content resources, but they are independent in operation. At present, the collaboration between the two will not only be reflected in the flow collaboration. We are striving to deeply integrate and standardize the online and offline teaching of the two, so as to make the two play a greater synergy. "

Some industry insiders told reporters, "with the refinement of online education operation, XRS online school is bound to develop local online courses. At that time, the resource allocation and integration within tal's system may face challenges."