Author: Wu Xinyu
Source: Securities Market Weekly
Under the same historical opportunity, who learned from Pinduoduo and chose the same strategy in different industries: sinking market, low price, community marketing.
"when the whole industry is losing money, I don't know who to learn from and why I can maintain high growth and make a profit." Recently, Pan Xin, a former vice president of New Oriental Education & Technology Group, said in an interview that as a 12-year veteran of New Oriental Education & Technology Group and the COO of New Oriental Education & Technology Group online, Pan Xin, an industry veteran like Pan Xin, did not understand who to learn from, and what exactly did he experience?
"I didn't expect him to get so big later. I really didn't notice it. He rarely appears in the public media, and many people no longer pay attention to him because they can't hear from him. " For Chen Xiangdong, the founder of whom to learn from, the impression of many practitioners in the education and training industry has become blurred.
While learning from whom has quietly become the third largest education company listed in the United States, after TAL Education Group and New Oriental Education & Technology Group, its market capitalization reached 10.6 billion US dollars on February 19th. To this day, it has taken less than six years to learn from someone, while New Oriental Education & Technology Group and the future have been developing for 24 and 13 years respectively when their market capitalization reaches 10 billion US dollars in 2017.
If you go out of the education and training industry to make an analogy, you will find that it is very similar to who learned from another company-Pinduoduo.
It's equally incomprehensible. People in the "five rings" could not understand Pinduoduo, and it was not until Pinduoduo went public that they flocked to study "consumption demotion" and try to make orders; most people in the educational circle did not understand who to learn from, because the whole industry of online education lost a lot of money, except who to learn from.
It also grows rapidly in a short period of time. Pinduoduo established 100 million users in one year, 200 million in two years, listed in three years, 500 million users in four years, and 13.1 billion yuan in 2018, and will exceed 20 billion yuan in 2019. After learning from anyone who made the transition in 2017, the number of people paying in 2018 reached 760000, and exceeded 2.7 million in 2019. Revenue has increased more than fourfold for four consecutive quarters and 2.1 billion yuan in 2019.
It also successfully broke the situation of the separatist regime of the two giants and ascended to the top smoothly. Pinduoduo successfully avoided the competition between the two e-commerce giants Taobao and JD.com, and who learned to avoid the competition between TAL Education Group and New Oriental Education & Technology Group.
With whom to learn from Pinduoduo, is it just the superficial resemblance?
The overlap of historical opportunities
Who learned from who was founded in June 2014, Pinduoduo was founded in September 2015, the most important growth phase of the two companies occurred in 2017-2018. During this period, he learned from whom to take a large class online and made a monthly profit for the first time, the business continued to grow at a high speed and began to prepare for listing; Pinduoduo received investment and support from Tencent, and the number of users soared from more than 100m to nearly 400m, and successfully listed on the market.
2017-2018Several things that happened in 2000 have provided objective conditions for the rise of learning and fighting a lot from whom.
One is the popularity of smartphones.
China's smartphone market has grown rapidly over the past decade, with more than 2.1 billion smartphones shipped in the five years from 2014 to 2018. The decline in smartphone shipments from 2017 to 2018 means that the domestic market has become saturated, and the popularity of cities below the third tier has been basically completed. according to statistics, the market share of smartphones in cities below the third tier in China has been maintained at about 70%. This allows the majority of Chinese users to skip the PC Internet and directly enter the era of mobile Internet.
The second is the sinking of 4G and broadband.
2017From 2000 to 2018, the number of Internet broadband access ports increased by 173 million, accounting for 20% of the total, accounting for 20% of the total. The number of 3Ghand 4G base stations increased by 840000, accounting for 13% of the total number of base stations. Taking into account the differences in regional and resource allocation, 4G and Internet broadband have long been popularized in core urban areas such as the first and second lines, and most of these new Internet broadband port access and mobile base stations must be in the third and fourth lines and remote areas. It is worth noting that most of the Internet broadband access in third and fourth lines and remote areas is not for the use of computers, but for mobile phone packages to bind to broadband, which is eventually convenient to turn on wireless signals to mobile phones.
After the popularity of smart phones, the application of network and traffic will really bring about the development of mobile Internet in sinking areas.
The third is the popularity of mobile payment.
2014 From 2008 to 2016, WeChat Pay developed rapidly by virtue of the "Spring Festival Red packet War". At the same time, the competition between WeChat Pay and Alipay quickly popularized mobile payment to daily life. The number of users paid by China Mobile Limited increased from 217 million in 2014 to 583 million in 2018. the compound annual growth rate is 28%, and the proportion of mobile netizens has increased to 71.4%. The proportion of netizens using mobile payment when spending offline is 67.2%.
On the other hand, 48.20% of all netizens have a monthly income of 1-3000 yuan, while netizens with low consumption level account for a higher proportion. From 2015 to 2018, the proportion of this population dropped from 53.70% to 48.20%, an average annual decline of 1.83%, and the income of sinking netizens continued to rise.
The greater significance of the popularity of mobile payments is that it releases the spending power of low-and middle-income families.
The fourth is the dividend of Wechat community marketing.
With the help of WeChat business and self-media, community marketing with Wechat as the carrier began to be popular from 2017 to 2018. Its core is that users change from passive acceptance of advertising to active communication, while the social nature of moments allows advertisements to spread rapidly in the same circle, and advertisements reach accurate users, which is much more efficient than traditional online and offline full coverage advertising. It is very suitable for fission and low-cost user expansion, and naturally greatly saves the cost of getting customers.
2019In October 2008, Wechat released the Wechat external links content Management Standard, which ended the original extensive social marketing dividend.
The sinking of smart phone, 4G, broadband and mobile payment has brought the popularity of mobile Internet and laid an important foundation for e-commerce, online education and other industries to enter the sinking market.
So, in fact, it was not until 2017-2018 that the sinking market really opened.
At this point, we have the same starting point as who just entered online education, and even bet on the track earlier, as well as a large number of famous teacher resources accumulated from the early O2O war and a team of scientific and technological talents from Baidu, Inc.. It takes up all the time, the earth and the people.
A surprisingly consistent strategy
Under the same historical opportunity, who learned from Pinduoduo and chose the same strategy in different industries: sinking market, low price, community marketing.
Pinduoduo chose the long-tailed merchants abandoned by Taobao and JD.com and the neglected "outside the five rings" sinking users. More than half of the students who study with him come from low-line cities, and the penetration rate is higher, and the main users are concentrated in Guangdong, Shandong, Zhejiang, Jiangsu, Henan and Hebei. As the main income of TAL Education Group and New Oriental Education & Technology Group comes from offline classes, the actual cities for both sides to expand their business are very limited, which is also an important reason for the low concentration of the industry. As of fiscal year 2019, TAL Education Group had only 676 campuses in 56 cities. New Oriental Education & Technology Group has only 1233 campuses in 83 cities, and the influence of TAL Education Group and New Oriental Education & Technology Group is almost negligible in the third-tier and below sinking market. This is a very favorable condition for the rise of learning from whom.
Positioning the sinking market is the core feature of who to learn from and Pinduoduo's business model, and many other strategies are based on this feature.
Like a famous teacher. For Chinese families, the dedication and dedication to education may be beyond the imagination of many people, especially those families sinking into the market, they also hope to get educational resources in first-tier cities. However, the scarcity of teachers and resources determines that this demand cannot be solved offline, and online is the only way at present. The simplest and most direct way to attract users of the sinking education market is famous teachers and high-quality educational services.
With whom to recruit only 5% famous teachers, with an average teaching experience of 11 years, the number of lecturers is less than 200, and the number of famous teachers' courses is more than 2000 online. The average online number of K12 courses has increased from 400 in 2017 to 1400 in the third quarter of 2019. So how to ensure that famous teachers can stay? The answer is about to come out-a high salary. In 2018, the average annual salary of teachers and staff from whom to study will be 220000 yuan. Excluding guidance teachers, the average salary of teachers will be even higher. The median of lecturer teachers will reach 900000 yuan, with an average of 300000-400000 yuan. It is understood that the annual salary of famous teachers is nearly 10 million yuan. Famous teachers are also an important guarantee of the continuation rate, with an average continuation rate of 70%.
Consumers have a common demand for "saving money", and a more appropriate term than "low price" should be "in line with the price of a specific consumer group". When Taobao, JD.com and Yan Xuan began to create a quality of life, they had inadvertently abandoned the sinking market. Pinduoduo met the huge demand of the sinking market in the form of free delivery at a low price.
The low price of the online education industry is relative to offline education, with whom the price of online courses is 1 big 3 to 1 big 2, a class hour in primary school is about 50 yuan, while the equivalent offline course is about 150 yuan, coupled with the blessing of famous teachers, parents' choice is self-evident. What is special about the education and training industry is that the services purchased will affect the growth of students, and parents will be cautious about the choice of teaching and training institutions, unlike the e-commerce industry, where they buy low-cost and low-quality goods, and there will not be much loss if they do not buy them next time. Therefore, the education and training industry blindly low-price strategy will not work, in the same kind of pricing had better be a little higher, such pricing can also be worthy of famous teachers. This is exactly what you learn from. The guest prices of its two major brands "who learn from" and "Gaotu Techedu Inc. classroom" are slightly higher than those of their peers, with an average price of 50-95 yuan per hour and 30-45 yuan in the industry.
After low-cost drainage, the next step must be to gradually increase the unit price of passengers. Pinduoduo's unit price was 33 yuan in 2017, up 30.6% to 43 yuan in 2018, and exceeded 50 yuan in the first half of 2019. The average fee for paid courses with whom was raised from 1100 yuan in the second quarter of 2018 to 1500 yuan in the second quarter of 2019. Although the price per guest is still very low, the scale of the students is large. The income of 50 yuan for a class is 70, 000 yuan for 1400 students, which only requires one lecturer and about 5 tutors. Responsible for solving pre-class, in-class and after-class problems of students and parents. Assuming that the unit price of offline courses is 3 times RMB150, it takes 467 students to achieve the same income. New Oriental Education & Technology Group K12 excellent Middle School is divided into 25 students / class and 15 students / class. According to the industry average of 25 students / class, 19 classes are required, corresponding to 19 lecturers. The scale advantage of learning from whom is gradually becoming apparent.
Pinduoduo's "patchwork" brings the low-cost customer acquisition ability of community fission to the extreme. Pinduoduo has existed in the form of lightweight H5, Mini Program and official account on Wechat platform for a long time after its official launch. Compared with traditional APP drainage, it can absorb user consumption more widely, make full use of Wechat's social flow resources, and drive the rapid growth of active users.
It is its strong social marketing ability to learn from who goes unnoticed. When peers are carrying out large-scale advertising recruitment online and offline, learn from who is already groping for low-cost Wechat traffic operation. However, there is nothing we can do about it, just like who raised only $50 million before going public, which was about the same in the 2015 O2O war, and advertising with competitors will only dry up cash flow more quickly. Learn from who began to explore the realization of Wechat traffic in the O2O period, providing customer acquisition, interaction and other technical support for nearly 100 Wechat official accounts, coinciding with the Wechat community marketing dividend from 2017 to 2018, catching up with a free ride. At present, there are 97 certified official accounts with whom Xue has nearly 10 million active followers, and the routine is not complicated: writing articles on social hotspots leads to reading and retweeting (a number of 100000 + articles), promoting free courses, and joining grouped WeChat groups. invite to join the celebrity teacher live class, complete the payment.
It looks simple, but the actual effect is very good. In the early years, few people realized that Wechat ecology can bring such a large amount of traffic. Several other companies either have enough money to advertise on mainstream platforms, or have their own traffic pools, and path dependence is also a hindrance to exploring new things.
The low cost of getting passengers is the key factor to learn from who can overtake around the corner. In the latest third quarter 2019 report, the average cost of getting customers from whom is 545 yuan, while the industry average is more than 1,000 yuan. The main reason for the losses of other online education companies is mainly due to the high cost of getting customers.
Looking back from whom to learn and Pinduoduo, it is in the case of overlapping historical opportunities, decisively seized the opportunity, there seems to be more elements of luck. But the truth is far from that simple. Before Chen Xiangdong founded and studied with whom, he had worked at New Oriental Education & Technology Group for 15 years, from a grass-roots teacher to the group's chief executive. Huang Zheng was even more successful as a teenager. He was appreciated and cultivated by Ding Lei, Duan Yongping and other bigwigs during his study. His first job was in Alphabet Inc-CL C, and he left to start a business in 2007. Before they start a business, they already have a vision and experience that is difficult for ordinary people to reach.
Opportunity is only a reward for long-term hard work and persistence.
Rethinking of social stratification
2019The economic instability and the frequent emergence of black swans since 2000 have made people feel that the golden decade of the Internet is over, and the economic leadership of new technology seems to be a long way off. But it's not that bad, it's just that the era of easy money is over.
Behind who to learn from and Pinduoduo's success, there is more to think about.
More and more obvious social stratification will be the biggest challenge and opportunity we face. Social stratification brings about the stratification of consumption power, high-income families need the upgrading of spiritual consumption, and low-and middle-income families also need the upgrading of material consumption. The goal of "letting some people get rich first" has been achieved, and now we need to pay attention to the needs of other people on a large scale, which is a realistic social phenomenon and the greatest business opportunity. Successful business models are all about solving social problems.
There is a saying in the Godfather, "people who spend half a second to see through the nature of things, and people who spend a lifetime not seeing the nature of things, are destined to be very different destinies."
The rise of learning from others and striving for more is based on the huge increase in the spending power of low-and middle-income families, which is almost a brand-new market. Low-and middle-income families yearn for educational resources in first-tier cities and need cost-effective products that meet their spending power. Who to learn from and Pinduoduo just seized an opportunity to subdivide the field. In addition to education and e-commerce, there are more opportunities for dedicated people to explore.
A very important point is that the stratification of consumption power is not equal to the stratification of regions. First-tier, second-tier, third-tier and fourth-tier cities are only roughly divided. Living in first-tier cities is not high consumers. Similarly, there are also many high-income families in third-and fourth-tier cities. Families with different spending power have been mixed geographically, which is the form of a normal society. What we need to do is how to identify and gather specific groups of consumers and deliver products and services. At present, Wechat's community and circle characteristics, and the online celebrity economy represented by Douyin, all happen to play the role of circle screening. The system of Wechat and Douyin will certainly hatch more business forms in the past, and will be in the future.
The popularity of social stratification and mobile Internet has opened the highway of consumer economy, and many people are still pulling broken carts on the previous "shortcuts". The historical trend is mighty and mighty. Those who comply with it prosper, and those who go against it perish.
What should be sunk should be given up so that the newcomer can set sail.
Disclaimer: this article only represents the personal views of the author; the author declares that I do not hold the shares mentioned in this article.