The “Great Earthquake” finally came.
On July 24, the official announcement of the “Double Reduction” document regulating off-campus training institutions in primary and secondary schools (“Opinions on Further Reducing the Burden of Homework and Off-campus Training for Students in Compulsory Education”) means that the living space for subject training at the K9 stage will be reduced. Great compression; unable to go public for financing, for online education companies that rely on capital to spend money to expand rapidly, it can be said to be a drain on the bottom line.
Seeing the heavy hammer fall, practitioners have also had a fluke mentality in the first half of the year to now must “recognize the reality”. Some people in the industry even gave suggestions, “Transformation that can be transformed, and career change that cannot be transformed.” How to transform has become the most discussed topic among practitioners in major education and training institutions in the past week. It depends on who moves fast and has the right direction.
Under the wave of transformation, many players have already “turned” to respect. Intelligent educational hardware is one of the directions that has attracted much attention. This is not a new track, and many players have poured into it, including online education companies, Internet technology companies, and traditional education hardware manufacturers. New product forms are emerging one after another. Some people believe that in the new era of education and training, the demand in this market is stronger than expected.
VCs are also paying close attention to this track, and practitioners looking for transformation are watching: What is the status of the smart education hardware track? How to change from “soft” to “hard”? Is it difficult?
01 Scramble to make hardware
“C-end education hardware products will definitely increase in the future.”
Zhou Shuang, a partner of Blue Elephant Capital, is optimistic about this track for a long time. She told Shen Ran, “After the off-campus subject training is compressed, the time allocation of students has changed. In the past, the time in education and training institutions will be allocated to the school or family, which means that users’ demand for products in home education scenarios will increase. It will increase, and a new wave of market opportunities will inevitably emerge.”
Since the epidemic caused students to study at home for a long time, the market imagination and profit margins of the education hardware market have been further seen. According to the “2021 China Educational Intelligent Hardware Trend Insight Report” released by iResearch, it is expected that China’s education intelligent hardware market will reach 45.3 billion yuan in 2021 and nearly 100 billion yuan in 2024.
Intelligent education hardware is not a new track, and it is not an exaggeration to describe the product form in various ways.
From Xiaobawang to Backgammon and Dushulang, these traditional education hardware manufacturers have been fighting since their establishment at the end of the last century, and now a number of quasi-listed companies with large-scale revenue have emerged. In the first half of this year, the prospectus submitted by Dushulang to the Hong Kong Stock Exchange showed that its revenue in fiscal year 2020 was 734 million yuan, and its net profit was 92.013 million yuan. The GEM listing has been accepted, and its revenue in the first half of 2020 was 288 million yuan, with a net loss of 1.0383 million yuan.
A number of Internet technology companies and online education companies have also stepped down to make intelligent education hardware. ByteDance, Xiaomi, Baidu, iFLYTEK, etc. have all released related products.
Among the online education players, NetEase Youdao, Yuanfudao, and Homework help more or less set foot in the intelligent education hardware business.Among them, Youdao has made the intelligent education hardware business one of the pillars of revenue.Taking Q1 in 2021 as an example, Youdao’s overall revenue is 1.34 billion yuan, of which education hardware revenue is 202 million yuan, accounting for 15.07% of revenue, and the most important K12 business The sales are only 442 million yuan. .
The main product form of Youdao’s education hardware business is dictionary pens. During the Q1 period of fiscal year 2021, the gross profit margin of Youdao’s learning services and learning products reached the highest since its listing, mainly due to the sharp increase in sales of “Youdao Dictionary Pen 3”, and the gross profit margin of this product was higher than other learning products. Just this week, Youdao also released the NetEase Youdao dictionary pen K3 Frozen series in collaboration with Disney.
Dictionary pens are a field that industry players get together to enter. iFLYTEK launched the iFLYTEK scanning dictionary pen in the second half of 2020, and the veteran player Hanwang released the Hanwang dictionary pen as early as 2011.
The freshest product form of educational hardware in the past two years is the smart desk lamp.
In October 2020, Vigorous Education, a subsidiary of ByteDance, released the “smart desk lamp”, which aroused the attention of industry insiders on the new “traffic portal” in the home education scenario.
The “lighting war” provoked by Byte has attracted giants such as Tencent and Ali to participate in the war. In the first half of this year, there were rumors that Homework Gang was also deploying “smart desk lamps”.
“Ancient” learning machines and learning tablets are the product forms that many traditional manufacturers are betting on, and they are also areas where cross-border players overweight. iFLYTEK has released a new learning machine in July this year. Previously, there was also news that Vigorous Education may be developing learning tablet products. Youdao revealed at the financial report that “new products of educational hardware will be released this year”, which was pointed out by industry insiders that it would launch a learning tablet.
In addition to common product forms, Internet technology companies and online education companies are also constantly innovating product forms in subdivided scenarios. Youdao, Yuanfudao, and Homework Gang have all launched wrong-question printer products, capturing the sub-scenario of wrong-question printing; Zebra, a subsidiary of Yuanfudao, launched the “Zebra Logic Thinking Learning Machine” aimed at the early childhood stage in July this year. ”, which forms a linkage with the content of Zebra APP; in addition, product forms such as smart writing pads and educational electronic paper are also being promoted continuously.
02 Playing hot, there is no lack of doubts
Online education is “turned off”, and a new wave of intelligent education hardware market may emerge, but this track is currently hot and doubtful.
The competition in the current education hardware market has long been not limited to the competition at the hardware level, but also lies in the deep integration of hardware and software content and services. Therefore, the three types of players on the educational hardware track all have shortcomings to be filled.
The strength of traditional hardware manufacturers is the design and production of hardware, while the weakness lies in the research and development of educational content. However, for Internet technology companies and online education players who are good at technology and content research and development, industrial design, supply chain delivery, and sales channels are problems that have to be dealt with.
“Cross-border entry to make hardware, you may step on a lot of pits. “Yao Yufei, the founding partner of Dowhale Capital, analyzed. First of all, cross-border education hardware often lacks the ability to control the supply chain, does not have the genes of industrial design, and has an immature understanding of hardware. Find a suitable foundry to deliver the corresponding products. The required products are also not easy. The second difficulty lies in the sales channels, whether it is through e-commerce, self-owned user conversion, advertising, or offline agency distribution channels, these sales channels have already been tapped by traditional manufacturers. “serious.
Compared with the incompatibility of “genes”, the more important thing is that no matter how fancy the product form is, the function cannot meet the user’s needs, and the user will not pay. Take the smart desk lamp launched by Vigor Education as an example. After its launch, it has been questioned a lot, such as “high price, low cost performance”, “obvious intention of diversion, for selling lessons”, and in terms of product performance, there are also consumption Others commented “poor recognition ability”, “difficulty connecting to WiFi”, etc.
In addition, the “Double Reduction” document pointed out that online training institutions must not provide and disseminate bad learning methods such as “photographing and searching for questions” that inert students’ thinking ability. One of the important functions of “smart desk lamps”, “photo search questions”, may also be removed from the shelves in the future.
“The education hardware industry has already become a red ocean market.It may be difficult for industry players to transform into hardware now. “Yao Yufei said. Even if it is a big factory that makes intelligent education hardware, it is because there are some progress in technology and content that need to be implemented in the scene, or to preempt certain specific scenes to launch products, and it cannot be called All in. law, but only a strategic layout.
Previously, K12 online education manufacturers focused on product forms with lighter models such as error-prone printers, and intended to increase investment in the research and development of intelligent hardware. The more critical purpose was to use hardware as a “traffic portal” to alleviate traffic anxiety. In particular, one of the reasons why the hot smart desk lamp can explode is that it is regarded as a key traffic entrance to grab the offline home scene, and then guide users to convert from hardware to paying users for live classes.
Under the “double reduction”, the war of K12 online large class live broadcast has been extinguished. In the past, online education companies have reduced the meaning of intelligent hardware as a “traffic portal”. These players have to be patient with how much investment in intelligent hardware is still needed. question mark.
03 How to grab smart education hardware?
Today, in the context of “decapitalization” in the K12 online education track, “survival” is the most important thing. “K12 online education has entered a period of transformation. At this stage, each company is showing its magical powers. As long as there is an opportunity and transformation, everyone in all directions may try it.” An online education practitioner told Shen Ran.
Yao Yufei expressed a similar view: “K12 online education can be said to have entered the juncture of life and death, and making intelligent education hardware is one of the ways to survive. Each company will definitely evaluate how to combine the hardware with its original business to increase revenue. .”
Transformation is difficult, but it is not without precedent that smart hardware has become one of the business pillars of education companies. Since 2017, Youdao began to test the water for intelligent education hardware. After launching the first product “Youdao Translator Egg”, Youdao Dictionary Pen, Youdao Translator King, Youdao Pocket Printer, Youdao Super Dictionary and other products have been launched successively. .
Youdao is also due to its early layout, and it took 3 years to realize the scale of revenue from educational hardware products. In 2020, NetEase Youdao’s revenue was 3.168 billion yuan, of which educational hardware product revenue reached 540 million yuan, a year-on-year increase of 139.8%; in Q1 2021, Youdao’s revenue was 1.34 billion yuan, and educational hardware revenue was 202 million yuan, a year-on-year increase. An increase of 279.8%. Hardware revenue is also growing rapidly.
Online education players build hardware. When the meaning of “traffic portal” is weakened, the role of future intelligent education hardware is to truly solve the problem of offline learning scenarios. Compared with business collaboration, it means opening up new businesses. Moreover, the investment and output of educational hardware requires a long period of time, and new players need to be carefully evaluated.
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