30 DAYS of Online Education Changes

An educational revolution is underway.

Thirty days have passed since the official announcement of "Double Reduction" ("Opinions on Further Reducing the Burden of Compulsory Education Students' Homework and Off-campus Training") on July 24, and the entire off-campus training industry has undergone tremendous changes.

Almost all K12 education companies that were in the limelight last year are shrinking, layoffs, and transform to make a living. The U.S. stock market educates the three giants, Good Future, New Oriental, and GAOTU. Now the stock prices are only single digits. In eight months, the total market value of the three companies has fallen from over 130 billion U.S. dollars at the peak to 7 billion U.S. dollars today.

A nearly trillion market collapsed.

On the surface, various players in the off-campus training industry have turned their heads to explore the direction of quality education, adult education, and education hardware in full swing, but these moves are considered by the industry to be just a "slow strategy." "Out-of-school training industry, no track can have the scale of the K12 track." An industry source made it clear.

The brilliance of the K12 track is no longer a foregone conclusion. While many practitioners are saddened by the impact of their work, they have to admit that under the coercion of capital, the off-campus training industry once entered a speeding track.

Yu Minhong, the founder of New Oriental, has refuted rumors twice in the circle of friends in the past 30 days. Three days after the official announcement of the "Double Reduction", a screenshot of the course "New Oriental will carry out a high school summer training camp, students take a large cruise to the high seas, full board, lodging and academic exams" was spread, which attracted Yu Minhong's questions in the circle of friends. "Do you want to get to the bottom in this difficult time?" Another time, New Oriental's "transformation training parents" was interpreted as or will be engaged in subject training for parents. He explained that New Oriental has given thousands of family education lectures, and Mainly for public welfare.

Good future and Gaotu can't be silent either. First, Zhang Bangxin, the founder and CEO of Good Future, issued an "unworthy argument": "Our institutions are not worthy of our customers, and our company is not worthy of our executives and cadres." Then, GAOTU founder and CEO Chen Xiangdong used five "sorry" in the internal letter of all employees to show the company's difficult situation behind the "major layoffs".

Under the "double reduction", this nearly trillion market began to evaporate. According to relevant CIC data, the scale of China's K12 training market in 2020 will reach 784.5 billion yuan, and it will reach 1.4542 billion yuan in 2025, with a compound annual growth rate of 13.1% from 2020 to 2025. Based on this calculation, the K12 education and training market will reach approximately 887.3 billion yuan in 2021.

Even if the players with capital and ability in the industry have begun to transform like a raging fire, the consensus of most people is that, like "West Lake is difficult to withstand the water of the Pacific", the domestic education and training industry has almost no golden track like K12. , The subdivision track will be more crowded.

In the aforementioned anonymous speech of Zhihu users, it was mentioned that "the department leader said that this industry will not make money in ten years unless it is going to sea". However, Yao Yufei, the founding partner of Multiwhale Capital, previously analyzed with Shenran that in the long run, the global market has a certain amount of space, but going overseas may face operational risks caused by unfamiliarity with local politics, laws, and culture.

The "double reduction" document came out first, and the secondary market education stocks collectively suffered a major earthquake. At the close on July 23, Eastern time, the market value of Good Future evaporated by 9.362 billion US dollars, the market value of Gaotu evaporated 1.554 billion US dollars, and the market value of New Oriental evaporated 5.949 billion US dollars. Overnight, the market value of the three companies lost a total of 16.8 billion U.S. dollars or about 109.6 billion yuan.

As of the close of trading on August 20, Eastern Time, Good Future had a market value of US$3.308 billion, a decrease of 94% from US$58.669 billion at a higher point; New Oriental’s market value was US$3.12 billion, and US$34.228 billion at a higher point fell about 91%; Gaotu The market value is US$631 million, which is 98% lower than the US$38.157 billion in the first half of the year. In the past eight months or so, the market value of the Big Three in the U.S. stock market has evaporated by 124 billion U.S. dollars or about 806.1 billion yuan, and now only 7 billion U.S. dollars remain.

The primary market will naturally not be calm. Last year, online education ran too fast. Yuanfudao's financing was integrated into the G2 round, which was ridiculed as "the letters are almost not enough", and the top four K12 online education companies raised more than 10 billion US dollars in one year.

"Seeing him getting up a tall building, seeing him banqueting guests, seeing his building collapsed", countless people who have experienced glorious moments of online education have truly understood the meaning of this sentence, but it is difficult for everyone to deny that the speeding off-campus training industry, It really needs a big change to slow down education and return to the essence of "education".