[Editor's Note] Lazy Bear Youth Sports analyzed the long-tail effect of the epidemic on sports education companies, analyzing the transformation of the OMO model of sports education companies, postponing the arrival of the refund wave of sports education companies, and also bringing cash flow problems.
This article is quoted from "Lazy Bear Youth Sports", author Wang Yufei, edited by Yiou, for reference by industry insiders.
Since Wuhan closed down on January 23, the epidemic has lasted for more than two months. As the domestic epidemic gradually stabilizes, news of resumption of work and classes has gradually been released, and local governments have also successively issued policies, and life is gradually returning to normal. But for practitioners in the youth training industry, the "industry turning point" seems to have not arrived yet. In 31 provinces (autonomous regions, municipalities directly under the central government) and the Xinjiang Production and Construction Corps, Hubei, Beijing, Tianjin and Hebei still maintain a response at the first level of epidemic prevention and control, and more than ten provinces and cities maintain a response at the second level of epidemic prevention and control.
As of April 7, 24 provinces and cities have identified the resumption time, but except for some provinces and cities that have stable epidemics, most of the resumption news is still aimed at students in junior high school, senior high school, secondary vocational and higher vocational schools. There is no clear news of resumption of classes for the most important primary school stage and the lower-age stage of youth education companies. And on March 30, the education departments of some provinces and cities further clarified the news that classes were scheduled on Saturday after the resumption of classes, and the summer vacation will be postponed accordingly. Lazy Bear Youth Sports has made corresponding predictions on this before and put forward some suggestions, (Article link: Butterfly effect of the epidemic? What should I do if the physical education institutions may lose the entire summer vacation?) At the same time, in mid-February, Lazy Bear Youth Sports launched a questionnaire for a sports education company, and obtained feedback from executives of 362 sports education companies in , 29 provinces and 100 cities across the country. We sorted out the questionnaire results and conducted corresponding analysis. Based on the long-tail effect of the current epidemic, we selected several analysis results that are instructive to sports education companies and interpreted them accordingly.
1. "Active attempt and passive acceptance" of the OMO model
OMO model was not a hot topic in the previous field of physical education, because it aims to solve the problem of online and offline connections, and education and training projects in the field of sports have seen their strong offline stickiness. The CEO of Filipino Sports mentioned in Lazy Bear Sports' online course that when he first founded Filipino Sports, he was attracted by the fact that when online education became more and more popular, physical education was one of the most difficult sub-sectors to break through.
However, an epidemic quickly pulled various institutions online, either actively or passively began to accept the "dominance" of the OMO model.
Distribution of institutions that have already started online courses
We divide the company according to the number of students, and count the institutions that have already started online courses (before February 12). The results show that the more institutions with the number of students, the higher the proportion of online courses. Among the 362 sports education companies participating in the survey, 210 had already carried out relevant online course services before February 12, accounting for more than half, reaching 56%. Among them, among institutions with less than 100 registered students, 46% chose to conduct online courses; among institutions with 100-500 registered students, the proportion of online courses reached 56%; among institutions with 500-1,000 registered students, the proportion of online courses was 61%; among institutions with 1,000-3,000 registered students and more than 3,000 registered students, the proportion of institutions with more than 80%, 81% and 87% respectively. This shows that, on the one hand, this seems to be the only thing that physical education can do in the case of home isolation. On the other hand, it can also be seen that larger institutions are better in this regard, in terms of response speed, course reserve, to specific implementation and course value. At the same time, we also learned through the follow-up visit that a considerable number of institutions that did not offer online courses at that time also gradually offered relevant courses in subsequent operations and were conducting spontaneous iterations.
For some sports education companies that have reached a certain scale, the OMO model may have been among the candidates long ago, waiting for a suitable opportunity.Hao Mengmeng, the co-founder of Heshi, had previously stated to Lazy Bear Youth Sports that the exploration of the OMO model has been going on for a long time. Under the epidemic, some functions have been launched in advance and live courses have begun. Recently, Duin and YBDL have also launched their own paid courses accordingly. For most practitioners in the industry, this model seems to be quite far from themselves. However, under the epidemic, all institutions are placed under the OMO mode, whether they look like it or not. Some small and medium-sized institutions said that they initially wanted to maintain customer stickiness through online courses, stabilize parental emotions, and at the same time prove that they are still alive and will not "run away". The continuous attempts of
head mechanisms convey the message that this may be a direction for future development. But as far as the current situation is concerned, there are still many problems, such as how to choose and match the situation of recording and live broadcasts, how to control the experience of live classes, and how to adapt and adjust the coaching team. As Dong Yu, co-founder of the Stone Touchdown, said in the Lazy Bear Live Course, although this business model has received attention from the industry for a long time, such as KEEP, which has invested more in this area in the fitness industry, has not yet formed a mature and stable business model. For youth training, we hope that there will be institutions in the market that can achieve this model. With the OMO model, it is too early to draw any conclusions now.
2. Whether the wave of refunds will exacerbate the industry's dilemma
Refunds have become a concern for many parents before the epidemic. The "running" institutions that have been constantly emerging in the education and training industry in 2019 undoubtedly tightened this string over and over again. In early February when the questionnaire was issued, we analyzed the data collected and found that the refund did not cause much trouble to the institution, or it was not the main contradiction for the time being.
Among the 362 institutions surveyed, the more students there are, the fewer the refund-related problems encountered. Among institutions with less than 100 students, 13 institutions face related problems; among institutions with more than 100-500 students, 7 institutions face related problems; among institutions with more than 500-1,000 students, 4 institutions face related problems; among institutions with more than 1,000-3,000 students, 2 institutions face related problems; among institutions with more than 3,000 students, only 1 institution face related problems. The number of consultations on the refund issue of
did not increase with the increase of the number of students, but instead showed a decreasing trend. On the one hand, this comes from a long-term trust in institutions. On the other hand, the online courses gradually launched by large institutions have played a role in "stabilizing the morale of the army" to a certain extent. At the same time, we recently looked at the return-to-return issues, but the issues related to refunds are still not the most concerned content for parents. Under the epidemic, parents can have a more full understanding of institutions. Although some institutions have gone bankrupt, most parents can still understand and will wait until the epidemic is over before considering related issues.
Refund related issues Distribution among institutions of different sizes
3. Personalized differences in cash flow conditions
Under this epidemic, cash flow can be said to be the well-deserved "top hot searches". Not only in the field of physical education, but not even in the education and training industry, all industries that cannot resume work in time are measuring their cash flow status.
Lazy Bear Youth Sports found through analysis of cash flow status and overall revenue in 2019 that 1-3 months is the choice of most institutions under the premise of survival. Among the 362 institutions, 156 institutions' cash flow status fell in this range, accounting for 43%. Especially for small and medium-sized institutions, this option is the largest proportion, among which 42% of institutions with revenues below 1 million, 44% of institutions with revenues of 1 million to 2 million, and 58% of institutions with revenues of 2 million to 5 million. For institutions with larger sizes, institutions that can operate for more than half a year account for a much higher proportion than those with smaller sizes. To a certain extent, it can be seen that large institutions have better risk resistance than small institutions.
Cash flow and operating income distribution in 2019
According to the current development status of the domestic epidemic, the full recovery of offline business in the training industry may be until May and June.From the beginning of February of the questionnaire, most of the cash flow of institutions will need to be supported by 4 months, which may help institutions overcome difficulties. On this basis, we also further subdivided the cash flow situation and selected institutions that can last for more than 4 months to observe their number of employees. The analysis found that institutions with small employees performed relatively better in terms of cash flow regardless of the revenue range. In early February, most institutions did not take more radical measures, such as layoffs or salary cuts. Under this situation, labor costs become the most important burden. Site cost is another part of the main burden, but its differences do not lead to a more obvious difference like labor cost.
Cash flow can support the distribution of institutions for more than 4 months
Based on the above analysis, we can see that institutions with streamlined populations and larger institutions will be more relaxed in cash flow. However, from the data, we can also see that institutions that cannot judge the cash flow status, cash flow has been cut off and can only operate for 1-3 months are more prominent, with 247 of the 362 institutions, accounting for 68%. This fully demonstrates that the cash flow of the entire industry is not ideal. In the final analysis, is still the problems caused by extensive growth under the prepaid model, blind expansion during the irregular period of the industry, and wild growth. Only by adjusting the "annual thinking", gradually shortening the payment cycle, and improving the capital utilization under prepaid, adjusting the performance appraisal model of employees, and straightening out the accrual system in the new state, can we improve the cash flow situation from the root and enhance our ability to resist risks.
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