Author丨Yi Jiaying Wang Feng
Edit丨Li Qingyu Bao Fangming Lin Dianchi Li Yutong
Just been strictly restricted from personnel salary and publicity fees, off-campus training institutions welcome regulatory documents again.
According to the Ministry of Education website on September 7, in recent days, in order to implement the "Opinions on Further Reducing the Homework Burden of Students in Compulsory Education Stage and Off-campus Training Burden" issued by the General Office of the CPC Central Committee and the General Office of the State Council (hereinafter referred to as the "Double Reduction" document), the Ministry of Education, together with the Ministry of Civil Affairs and the State Administration for Market Regulation, issued a notice that will deploy the unified registration of subject off-campus training institutions for students in compulsory education stage as non-profit institutions.
notice clearly states that for existing subject-based off-campus training institutions for students in compulsory education, corresponding measures will be taken to handle them according to different situations such as offline non-profit subject-based training institutions, offline for-profit subject-based training institutions, online subject-based training institutions and termination training institutions. After the end of 2021, the administrative approval and legal person registration of subject off-campus training institutions for students in compulsory education stage should be suspended from enrollment and charging before completing the registration of non-profit institutions.
notice requires that all localities should establish joint working groups, clarify timetables and roadmaps, formulate special work plans and work processes, and coordinate and promote the registration of off-campus training institutions for students in compulsory education stage. It is necessary to establish an accountability mechanism and hold relevant units and responsible persons accountable for failing to implement responsibilities and failing to take appropriate measures to ensure that the work is completed on schedule.
off-campus training will implement a government guidance price, and strictly limit personnel compensation and publicity fees are
It is worth noting that the National Development and Reform Commission and three other departments have recently issued the "Notice on Strengthening the Supervision of Off-campus Training Fees in Subjects in Compulsory Education" (hereinafter referred to as the "Notice"), and deploys subject off-campus training institutions to implement government guidance price management.
notice stipulates that the training costs include personnel compensation for training institutions, rent for training venues, publicity fees, R&D expenses, fixed asset depreciation fees and other expenses.
"According to the general management of private non-enterprise units, a profit margin of about 10% will be allowed, which means that the income of subject-based off-campus training institutions will be about 110% of the cost. In this way, the tuition fees in the future will definitely be greatly reduced than they are now." An industry insider told 21st Century Business Herald.
Specific charging standards will be formulated by provincial competent departments or authorized prefecture-level governments. The above-mentioned industry insiders will introduce specific details for Beijing and other places.
It is worth noting that the notice strictly restricts the two main costs of training institutions - personnel compensation and publicity fees. It stipulates that the average salary level of personnel shall not be significantly higher than the average salary of employees in urban non-private units in the local education industry announced by the statistical department. "To put it bluntly, the average salary of training institutions shall not be significantly higher than the salary of teachers in public schools." said the above-mentioned person in .
notice also stipulates that publicity fees shall not exceed 3% of the sales revenue of off-campus training in subjects. This is almost a fraction of the current proportion of online education companies' marketing expenses to revenue.
Photo/Xinhua News Agency
html burned 423 yuan in 11 seconds: Does capital harm the education and training industry?
"Now looking back, the education and training industry was really crazy at that time."
Teacher Xiaopeng, who is engaged in K12 education operation position, jumped to a leading K12 education institution in April this year. "The salary I asked for during the interview was 14,000 yuan per month, but the institution took the initiative to give me 16,000 yuan per month, and I was a little confused. Since 2020, I have jumped all the way and increased my salary. In just one year, I have jumped 5 K12 education and training institutions, and my monthly salary has also increased from the initial 7,000 yuan to 16,000 yuan."
And behind this is the bubble-like prosperity of the education and training market. With the gradual implementation of the "double reduction" policy, the industry rectification storm has begun. Looking back at the 2020 when the education and training institutions were dancing wildly, it was like a dream.
.com Economic and Social Security’s “Dianshubao” e-commerce database shows that in 2020, a total of 111 financings occurred in my country’s online education, with a total amount of more than 53.93 billion yuan, exceeding the total financing from 2016 to 2019. Among them, the top online K12 platforms Yuanfudao and Zuoyebang received a financing amount of up to 38.01 billion yuan, accounting for 70% of the industry's total annual financing.
"The injection of capital and overwhelming advertising and marketing have raised the cost of acquiring customers and then raised the selling price. All costs are ultimately paid by consumers. This is irrational market competition." Shan Xiaojun, founder of Encore Music and chairman of Nanjing Encore Education Technology Co., Ltd., said in an interview with a reporter from 21st Century Business Herald.
In this regard, a person in charge of a education and training institution pointed out, "It can be said that to a certain extent, the development laws of the education and training industry and the logic of capital are themselves a paradox, and even in some aspects, the impact of capital on the education and training industry is destructive."
Capital Manufacturing Education and Training Internal Volume
Previously, many people still believed that capital is omnipotent.
, as one of the leading platforms, Yuanfudao disclosed three financings to the public in 2020, namely, US$1 billion, US$2.2 billion and US$300 million in March, October and December, with a total financing of more than US$3.5 billion and a valuation of US$17 billion. The capital institutions that have entered the market include Yunfeng Fund, Dehong Capital, Hillhouse Capital, Tencent Investment, etc.
"It (online education) is that money can burn users and moats, and turn it into a lasting, trillion-level business?" In January this year, Yuanfudao founder Li Yong publicly responded in a documentary, "I can't think of the reason why it can't."
There is no doubt that advertising placement and user subsidies are two major money-burning models, but they are simple and crude ways to acquire customers that cannot be avoided. Chen Xiangdong, founder of Gaotu, once said that he did not think it was normal to burn money to do business, but under the influence of capital, "the market was reconstructed, and my ideas have changed."
As of the first quarter of this year, Gaotu's sales expenses were as high as US$353 million, a year-on-year increase of 202%, mainly due to the increase in marketing expenses for expanding the user base and improving the brand, as well as the increase in remuneration for sales and marketing personnel.
The following rise is the salary of education and training practitioners. Teacher Xiaopeng admitted frankly, "If I were in another industry, the monthly salary of 8,000 yuan in the position I worked in was the 'regional price' of Beijing. Even though I knew that the salary in the education and training industry was bubbled, I still couldn't lower my expectations and actively squeeze out the bubble when facing my next job."
"Take Nanjing as an example, before, the monthly salary of a store manager of an English education and training institution was around 13,000 to 18,000 yuan, and performance bonuses were added." Shan Xiaojun explained, "But in terms of business ability and level alone, in any other industry, 6,000 to 8,000 yuan is a high salary."
In his opinion, the more fatal thing about capital is that it allows practitioners to only see money, and educators who lack a sense of responsibility are unqualified. "From this perspective, it can even be said that capital has actually destroyed this industry, which distorts the three views of practitioners. The education industry cannot be kidnapped by money, because you will always face so many children." Under the marketing war of
, the development pace of education and training institutions has become messy. Originally, the core of education and training institutions should be teaching quality, but in the crazy marketing competition, the ability of marketing has become the key to victory, which is contrary to the essence of education.
Review the online education industry in 2020, from Weibo, Moments, Douyin, Kuaishou, iQiyou and Tencent applications on mobile phones, to variety shows, evening parties and TV series on TV, to education and training advertisements everywhere in subways, buses and elevators in public places.
According to the QuestMobile report, in the first half of 2020, the average marketing investment of K12 online education companies increased by 71.2% year-on-year. In June 2020 alone, Yuanfudao, Xueersi and Zuoyebang launched online, burning 1.113 billion yuan, about 423 yuan per second.
Education and training institutions have entered a vicious cycle of "financing - burning money to acquire customers - loss-financing".10 years after the listing of Futures, its profits grew steadily in the first eight years, and it ushered in its first loss in history at the beginning of 2020. This historic loss was mainly due to Futures' rapid growth in marketing. According to the financial report of Future Education, the year-on-year growth rates of marketing expenses in the past three years were 92.14%, 99.92% and 76.20%, all significantly higher than the revenue growth rate.
The business model is still immature
Now, the collapse of subject education and training has collapsed, and aftershocks are in my ears, and capital has poured into the markets of quality education, vocational education and other markets.
IT Orange data shows that in the first half of 2021, there were 104 financing events in the education industry, including 23 financing events in the field of education informationization, 23 financing events in the field of vocational training, and 19 financing events in the field of quality education. The financing events in the above three fields account for more than 60% of the financing events in the entire industry. More than
heads of education and training institutions expressed their cautious attitude towards capital to the reporter of 21st Century Business Herald. "The nature of capital's profit-seeking nature is contrary to the characteristics of the education industry that must have certain public welfare. Education is a basic need and it is difficult to achieve complete commercialization." The head of a vocational education institution in Shanghai revealed to the reporter of 21st Century Business Herald, "In fact, investors express investment intentions every year, but I still think education and training institutions are more suitable for small and beautiful forms."
Shan Xiaojun did the calculations. Taking a 300-square-meter campus as an example, there are five full-time personnel, namely principals, curriculum consultants and three full-time teachers. They can recruit 300 students. When full, the gross profit margin can reach 50%. However, with the increase of campuses, the gross profit margin is gradually declining. The two campuses need to add the position of chief principal, and the three campuses need to add three positions: academic affairs, sales and general manager.
"The management capabilities of an educational institution are limited." He further explained that education and training institutions actually serve both students and teachers, but in fact they are very personalized services, which is also contrary to the scale and replicability pursued by capital. "I think the entire education industry has not actually achieved a truly good business model, and it is still in the stage of exploration. Capital has accelerated the online education model, but the existing model is unhealthy, and the overall education industry is also unhealthy now."
On the one hand, with capital acceleration, the education and training industry has indeed deviated from the original channel. On the other hand, the characteristics of education and training are different from other industries, such as personalization, public welfare, etc., and there is still no business model that can be replicated on a large scale. Many education and training practitioners expressed their hope that capital will see the particularity of the education and training industry, rather than just paying attention to data. "Capital is actually a double-edged sword. At present, those with state-owned assets will be given priority to the entry of capital." The person in charge of a quality education and training institution revealed. The lessons of the discipline education and training industry not only inspire the heads of education and training institutions to rethink the relationship between capital and industry development, but also change the career trajectory of ordinary practitioners in the education and training industry. There are endless news about salary cuts, layoffs, transformation...
Teacher Xiaopeng also resigned from the above-mentioned top K12 educational institution during the layoffs in June this year. He has not found a suitable job so far. He told the 21st Century Business Herald reporter, "Now, I almost start from scratch when looking for a job. Even after working in the education and training industry, my expectations for work and existing experience do not match other industries. It is not as popular as fresh graduates in the market. After all, they are younger."
Source: 21st Century Business Herald
