Yuanfudao Product Analysis

Online education has developed rapidly in recent years. The impact of the epidemic last year has led to the rapid development of many K12 online education. Yuanfudao has stood out among a large number of players. Nowadays, people's demand for learning has increased, and online learning has become the choice of many users.

On October 22, 2020, Yuanfudao announced that it had completed a total of US$2.2 billion in financing in rounds G1 and G2. After the financing was completed, the valuation of Yuanfudao online education company reached US$15.5 billion, exceeding that of Indian education technology company BYJU'S, and ranked first among global education technology unicorn companies.

What has enabled this company to achieve such success in just a few years? What is the current status of industry development?

This article will conduct an in-depth analysis of Yuanfudao and comprehensively analyze the factors that contributed to the company’s success and the current development prospects of K12 online education.

This article will analyze from the following aspects:

1. Industry Analysis
2. Analysis of the advantages and disadvantages of typical players and typical models in the k12 field
3. Competitive product analysis
4. User Value Analysis
5. Business value analysis
6. Product Iteration Analysis
7. Product structure analysis
8. Operational Analysis
9. Summarize
10. Future Outlook

1. Industry Analysis

As the name suggests, online education is a teaching method that uses the Internet as a medium. Through the Internet, students and teachers can carry out teaching activities even if they are thousands of miles apart.

In addition, with the help of online courses, students can study anytime and anywhere, truly breaking the limitations of time and space. As a supplement to traditional classrooms, K12 online education has also ushered in a period of rapid development between 2012 and 2020.

The education industry is an industry that is deeply affected by macro factors. Therefore, in order to explore the secret of the rapid development of K12 online education, we use the PEST analysis model to interpret the industry.

1. Politics

The "13th Five-Year Plan for National Education Development" issued by the State Council in January 2017 proposed the goal of achieving new breakthroughs in educational informatization, forming a new situation of innovative development in the integration of information technology and education, and significantly enhancing the convenience and flexibility of learning.

The "Notice on Effectively Reducing the Extracurricular Burden of Primary and Secondary School Students and Launching Special Governance Activities on Off-campus Training Institutions" issued by the Ministry of Education in February 2018 focuses on regulating bad behaviors such as training institutions not having a license, teaching beyond the syllabus, teaching ahead of schedule, and intensive test preparation.

In April 2018, the Ministry of Education proposed the goal of basically achieving the development goals of "three comprehensives, two highs, and one large" by 2022, namely, teaching applications covering all teachers, learning applications covering all eligible students, digital campus construction covering all schools, and general improvement in the level of informatization application and teachers' information literacy. This is referred to as the "Internet + Education" platform. It will promote the transformation of special education resources into large education resources, from improving teachers' and students' information technology application capabilities to comprehensively improving their information literacy, and from integrated application to innovative development. It will strive to build a new talent training model under the "Internet +" conditions, develop a new model of education services based on the Internet, and explore a new model of education governance in the information age.

From the perspective of national policy, reducing the burden and "Internet + Education" are the main themes of education, but it is undeniable that China is still a society based on academic qualifications. As long as the college entrance examination scores can still greatly affect one's life, the demand for extracurricular subject tutoring will not be small. At the same time, the governance of training institutions is actually the standardization of the entire extracurricular subject tutoring market, which is more conducive to the healthy development of the extracurricular training market.

"Internet + Education" has the advantages of scientific and information-based management and supervision, and is the general trend of the future development of the education industry.

2. Economy

With the steady development of the national economy, my country's per capita disposable income has continued to increase. In 2019, it was close to 31,000 yuan. At the same time, with the improvement of living conditions, Chinese residents have shifted their focus from "seeking survival and food and clothing" to cultural needs that can improve the quality of life. The consumption structure has shifted from survival to development. In 2019, the proportion of consumption expenditure on education, culture and entertainment has increased from 10.6% in 2014 to 11.7%; and with the continuous advancement of supply-side reform and the continued intensification of social competition, the proportion of education-related consumption expenditure will further increase in the future.

3. Society and culture

my country has a huge population. By the end of 2019, the national population exceeded 1.4 billion. The number of people registering for the college entrance examination and the senior high school entrance examination is also increasing year by year, which provides a huge base of potential users for the development of K12 online education.

The "13th Five-Year Plan for National Education Development" issued by the State Council in January 2017 pointed out that there are still imbalances and disharmony in my country's education development. The education gap between urban and rural areas and between regions is still large, the total amount of high-quality educational resources is insufficient, and the layout is unreasonable. Changing the current situation requires long-term and in-depth reform, which is also one of the opportunities for K12 online education.

There is a big gap between the rich and the poor in our society. Parents' anxiety about social class advancement has spread to their children's education. For ordinary families, letting their children "go to college and move to the city" is a safe plan; however, not everyone can go to college. From 2012 to 2016, the gross admission rate from junior high school to high school was 56.4%, and the gross admission rate from high school to college was 49.5%. After these two rounds of screening, only about 1/4 of the students can successfully enter undergraduate studies.

Compared with developed countries such as the United States, Japan, and Germany, the proportion of Chinese students attending undergraduate programs is significantly lower. In the context of a shortage of high-quality educational resources, extracurricular tutoring has become a good tool to improve grades and admission to higher education. Even if a child's grades are acceptable, parents see that other children are enrolling in classes, and their children cannot fall behind. Learning never ends, and the more skills a child acquires today, the more competitive he or she will be in the future. Many parents have become long-term consumers of the K12 education market amid anxiety.

In addition, affected by the new coronavirus, K12 education has become the area with the largest growth in monthly active users in the education and learning segment, with monthly active users reaching 299 million, an increase of nearly 50% compared with the same period in 2019.

4. Technology

The continuous development of technology provides opportunities for the development of K12 online education.

The gradual popularization of mobile Internet since 2012 has expanded the use scenarios of online learning, allowing learning anytime and anywhere.

The development of technologies such as cloud computing, big data, and artificial intelligence can accurately portray the individual characteristics of each learner, grasp students' learning behavior habits, accurately discover students' knowledge gaps, and enable teachers to push corresponding teaching content in a timely manner; thereby providing large-scale education while achieving differentiated education supply based on the specific needs of each learner, thereby solving the contradiction between scale and personalization that has long plagued the education sector, and achieving high-quality educational balance and high-level lifelong education.

The popularization of 4G networks and the development of 5G networks provide a continuous and stable network environment for online education, enhancing the user experience; at the same time, the development of 5G is expected to create an immersive teaching scenario, further enhancing the fun and diversity of learning.

5. Summary

The above factors together contribute to the vigorous development of K12 online education. What will be the development trend of this industry in the next few years? Is there enough market space?

According to data from iResearch Consulting, the market size of China's online education industry exceeded 330 billion yuan in 2019, with a year-on-year growth rate of more than 28%, accounting for about 11.0% of the overall education industry. It is expected that the compound growth rate of the market size will reach 20.8% from 2019 to 2023, and the growth momentum will remain steady.

By 2023, online education will account for 16.6% of the overall education industry. The increasing acceptance of online education by users, the gradual development of online payment awareness, and the improvement of online learning experience and results are the main reasons for the continued growth of the online education market. The brand battle in the online education field has begun, and the surge in advertising costs has also provided support for the increase in market size.

Therefore, we can see that there is still a lot of room for improvement in this market, and it will maintain stable and rapid growth in the next few years.

2. Analysis of the advantages and disadvantages of typical players and typical models in the K12 field

Faced with the K12 online education market, which is uncertain and has huge growth potential, a large number of players have poured in, including traditional educational institutions that have transformed, as well as Internet upstarts that focus on online education; such as Xueersi Online School, New Oriental Online, Yuanfudao, Zuoyebang, Zhangmen 1-on-1, etc.

According to iResearch's data research, they can be divided into the classic school that is committed to optimizing offline education, the middle school that emphasizes that teachers' training and guidance of students is the essence of education, and the avant-garde school that is keen on developing new tools and creating new ways of playing.

1. Classic

The classic school emphasizes the irreplaceable nature of offline education. Its live lectures are more of an attempt at "Internet + Education". In essence, its focus is still on offline extracurricular tutoring.

Its advantages are obvious, and its disadvantages are also prominent. The specific analysis is as follows:

Advantages: Offline education is a face-to-face teaching model, the same as the traditional classroom model, so teachers can control students' class status very well and adjust students' listening status through classroom interaction; the classic school has been involved in offline education for many years, has accumulated more high-quality teachers, and has done more research on teaching methods.

Disadvantages: Students must go to designated locations for classes, which are greatly restricted by time and space. The time spent on the road occupies most of the students' free time, making them feel very tight on time every day, and even affecting their time for independent thinking. In addition, in order to attract more students, offline education has to set up many teaching points in one city, which puts great cost pressure on enterprises.

2. Centrists

The Middle School relies entirely on the Internet platform for tutoring and teaching, and has gradually developed with the development of technology. On the one hand, it emphasizes that the training and guidance of teachers to students is the essence of education. On the other hand, it uses big data and other methods to accurately discover students' deficiencies so as to improve the teaching system and adjust teachers' teaching methods.

For the middle class, various institutions are constantly trying out teaching models, mainly including one-to-one model, small class model and large class double teacher model. The advantages and disadvantages are analyzed as follows:

1) The one-to-one tutoring model is actually more similar to traditional tutoring, but the teaching location is placed on the online platform

Advantages: Compared with private tutoring, one-on-one tutors teach according to the syllabus provided by the platform, which is more scientific, reasonable and systematic; and it can also ensure that a learning plan suitable for the child is formulated within the teaching system based on the child’s learning efficiency. The platform's big data background can detect children's weaknesses more promptly and quickly, and send reports to teachers so that teachers can take timely countermeasures.

Disadvantages: The course price is relatively high.

2) Small class teaching: the number of students in a class generally ranges from a few to more than ten people.

Advantages: Small class teaching can share the teaching costs to a certain extent, so the price is more advantageous than one-on-one teaching. Because there are fewer students in the class, the teacher can basically take care of them comprehensively. Students also have a certain competitive pressure, which is helpful for improving their academic performance.

Disadvantages: Small classes require a large number of teachers and have high requirements on the teaching level of the teachers. It is difficult for companies to fully implement this model.

3) Large-class dual-teacher teaching means that the teaching teacher teaches live to hundreds of people, and there is a tutor to answer questions after class.

Advantages: On the one hand, students can enjoy live courses taught by famous teachers, and on the other hand, they have dedicated tutoring after class, which greatly improves learning efficiency.

Disadvantages: It is quite challenging for the platform’s teaching system.

3. Avant-garde

Avant-garde is keen on developing new tools and creating new ways of playing, advocating the use of smart applications to replace or assist real teachers

Advantages: It is very interesting, and through big data algorithms it can accurately identify students' deficiencies and conduct intensive exercises.

Disadvantages: It is difficult to understand the key points without the guidance of a real teacher, and there is no supervision, which tests students' self-control.

3. Competitive Product Analysis

Although Zuoyebang is classified as avant-garde, it is more because it has some attributes of a tool. In fact, Zuoyebang is also exploring an online teaching model - Zuoyebang live classes.

Since Yuanfudao and Zuoyebang are direct competitors with comparable user bases and equally rapid capital financing, we will take the two companies’ growth paths and business models as a starting point to gain a deeper understanding of the differences between them.

1. Yuanfudao

Yuanfudao Online Education was founded in 2012. It has successfully completed six rounds of financing led by well-known funds and giant companies such as IDG Capital, Warburg Pincus, and Tencent. It is valued at over US$3 billion and is the first unicorn company in K12 (covering preschool to 12 years of compulsory education) online education.

According to information provided by Jiguang Big Data, the following is the development history of Yuanfudao:

The details are as follows:

• In August 2012, it received RMB 10 million in Series A funding from IDG;
• In August 2013, it received $7 million in Series B funding from Matrix Partners China and IDG;
• In July 2014, it received US$15 million in Series C funding from Matrix Partners China and IDG;
• In March 2015, it received USD 60 million in Series D funding from China Media Capital, New Horizon Capital, IDG Capital, and Matrix Partners China;
• In May 2016, Yuanfudao received USD 40 million in D+ round financing from Tencent, which was a major strategic investment by Tencent in the field of K-12 online education.
• In May 2017, Yuanfudao received a round E financing of US$120 million from PE firm Warburg Pincus and Tencent.
• In December 2018, Yuanfudao received US$300 million in Series F financing. This round of financing was led by Tencent, followed by Warburg Pincus, Matrix Partners China and IDG's original shareholders. After the financing was completed, Yuanfudao's valuation exceeded US$3 billion;
• On March 31, 2020, Yuanfudao completed its latest round of financing of US$1 billion, led by Hillhouse Capital, followed by Tencent, Boyu Capital and IDG Capital. After the financing was completed, Yuanfudao's valuation reached US$7.8 billion;
• On October 22, 2020, Yuanfudao announced that it had completed a total of US$2.2 billion in financing in rounds G1 and G2; the G1 round was led by Tencent, followed by Hillhouse Capital, Boyu Capital and IDG Capital. The G2 round was led by DST Global, with participation from CITIC Industry Fund, Singapore Government Investment Corporation (GIC), Temasek, Trustbridge Capital, DCP, Ocean Link, Jinglin Investment, Danhe Capital and other funds. After the financing was completed, the valuation of Yuanfudao online education company reached US$15.5 billion, exceeding the Indian education technology company BYJU'S, and ranked first among the global education technology unicorn companies.

Yuanfudao's business model is large-class dual-teacher teaching:

• Where teachers come from: Yuanfudao employs lecturers who are graduates from prestigious universities such as Tsinghua University and Peking University, and also sets requirements for teaching experience. The official website claims that "1% admission rate employs first-line senior teachers."
• Content source: Keep up with the reform direction of the Ministry of Education, improve the capabilities of core modules, some courses are self-developed based on mainstream versions of textbooks, and different classes are tailored to students' needs.
• Teaching method: In order to reduce the difficulty of teaching for teachers and improve the quality of teaching, the Yuanfudao platform has formulated a teaching system, and then teachers teach according to the knowledge points of the platform's course system. After class, the class teacher will provide real-time tutoring in the WeChat group.
• Business expansion: When Yuanfudao was first established, its development direction was tools, and its products include Xiaoyuan Search Questions and Yuan Question Library. As the commercial value of tools was difficult to increase, in 2015 the business direction was adjusted to live teaching, and the "Yuanfudao" APP was launched. In addition to the above-mentioned products, the company’s current product matrix also includes Xiaoyuan Oral Arithmetic, Zebra AI Class, and Yuan Programming.

At this point, Yuanfudao has completed a closed loop of its product ecosystem, using tool apps to divert traffic to the Yuanfudao APP, and driving low-frequency course purchases through high-frequency tool use. The product matrix model has raised the ceiling of each product's development limitations.

2. Homework Helper

Zuoyebang Online Education was founded in 2015. On June 11, 2019, Zuoyebang was selected into the "2019 Forbes China's Most Innovative Companies List".

According to Jiguang Big Data, the following is the development history of Zuoyebang:

The details are as follows:

• In September 2015, it received RMB 25 million in Series A funding from Sequoia Capital and Legend Capital;
• In September 2016, it received USD 60 million in Series B funding from Xianghe Capital, GGV Capital, Sequoia Capital, and Legend Capital;
• In August 2017, it received US$150 million in Series C financing from Xianghe Capital, H Capital, Tiger Global Management, Qiyuan Capital, Sequoia Capital, and Legend Capital. This is the largest financing in the K12 field!
• In July 2018, it received USD 350 million in Series D funding from Coatue, Xianghe Capital, Linear Capital, Primavera Capital, GGV Capital, Tiantu Investment, Goldman Sachs, Sequoia Capital, and Taihe Capital.
• In November 2018, it received $500 million in Series D+ funding from SoftBank Group;
• In June 2020, Zuoyebang completed a US$750 million Series E financing, and its live class business has grown by more than 400% in the past year;
• In September 2020, Zuoyebang planned to raise US$650 million in a new round of financing.

Zuoyebang's business model is also to teach large classes with two teachers:

• Source of teachers: The Zuoyebang teacher team has gone through 6 rounds of rigorous screening; the school recruitment admission standards are strict, and the admission rate is less than 1%; 90% are from key universities and normal colleges; the main teachers have an average of 5 years or more teaching experience.
• Content source: We have our own teaching and research team and independently build a teaching and research system.
• Teaching method: Similar to Yuanfudao, the platform has formulated a teaching system, and then the teachers teach according to the knowledge points of the platform's course system. After class, the class teacher will provide real-time tutoring in the WeChat group.
• Business expansion: Zuoyebang has integrated a variety of self-developed learning tools, such as photo search, ancient Chinese text assistant, composition search, etc. In addition, Zuoyebang has separated the "Zuoyebang Live Class" into an independent APP.

In fact, Zuoyebang has changed its positioning. Initially, Zuoyebang was a question-searching tool, and later it was changed to tool aggregation + live classes. The current trend shows that the live classes will be split out again.

3. Summary

From the above analysis, it can be seen that Yuanfudao and Zuoyebang were established at almost the same time, and their current core businesses are large classes with two teachers, and they are direct competitors; the financing of Yuanfudao and Zuoyebang was very smooth and the amounts were huge. Since Yuanfudao was established earlier, it currently has a larger amount of financing and a temporarily superior capital valuation, but it has not formed a huge leading advantage, and the game between the two companies will continue.

The two companies do not differ much in their business models. Both have large classes with two teachers, and all teachers are graduates from prestigious universities. The curriculum systems are also independently developed by each company based on the standard training system of the Ministry of Education, and different classes are tailored to the students' needs.

Finally, in terms of business expansion, the two companies have the same goal, which is to create a closed loop of traffic for their own products, but the methods they choose are different; Yuanfudao directly directs traffic to the course APP to realize traffic monetization, while Zuoyebang first accumulates enough traffic through the tool + course aggregation APP and then splits the business; it is not clear who will have the last laugh between Yuanfudao and Zuoyebang, but the more intense the competition, the more it can promote the vigorous development of the industry, so let us wait and see.

4. User Value Analysis

In 2020, Yuanfudao’s advertisements appeared in the public eye in an "overwhelming" manner, claiming that "Yuanfudao's online education has exceeded 400 million users nationwide" (the author has doubts about the authenticity of this data. After all, according to the 45th Statistical Report on the Development of China's Internet, as of March 2020, the scale of Internet users in my country was 904 million). But regardless of the authenticity of this data, Yuanfudao is indeed a super unicorn in domestic K12 online education.

Yuanfudao’s success is not just due to advertising and marketing. It must also have its own unique features in meeting user needs. After all, only by grasping user needs can the company better serve users and make users willing to pay for the products.

The main participants in K12 online education are students, parents, teachers and platforms. Since the teachers of Yuanfudao are in an employment relationship with the platform, the teachers are service providers and belong to the platform. They will be analyzed together with the platform in the following text.

Next, let’s take a look at what the needs of parents and students are, and how the platform and teachers meet these needs.

1. Parents

As mentioned above, there is a large gap between the rich and the poor in our society, and parents' anxiety about social class mobility has spread to their children's education, so parents are the actual consumers of K12 education.

They focus more on whether it can truly improve children's academic performance and pursue high-quality and efficient course learning. According to data from Aurora Big Data, 51.5% of parents will choose offline teaching when choosing training classes for their children, which shows that there is still a lot of room for development in K12 online education.

So what are the shortcomings of offline teaching, and where are the opportunities for the development of Yuanfudao? We analyze from the following two aspects:

1) Home tutoring

Home tutoring is a traditional offline one-on-one tutoring method. This teaching method can solve the problem of personalized tutoring, but it also has many disadvantages.

Most of these home tutors are college students working part-time. On the one hand, the teaching levels vary so the teaching quality cannot be guaranteed. On the other hand, there is no scientific teaching system. They only impart knowledge points but cannot cultivate students' systematic thinking, making it difficult for students to learn by analogy.

2) Offline educational institutions

This is currently the most mainstream way of learning and is also the most accepted by parents; however, according to the survey results of Aurora Big Data, we can see that the main reasons why parents do not enroll their children in offline training classes at tutoring institutions are: they believe that the teaching level is not high, they do not understand the training classes, the classes are too far away, it is troublesome to pick up and drop off, and the time is not suitable, etc.

In addition to these, since offline educational institutions generally use large classes, it is not easy to personalize the teaching content according to students' circumstances.

The main reason why parents choose to enroll their children in training classes is that they believe that training classes have better learning methods that can improve learning efficiency, can provide children with more comprehensive teaching and guidance, and hope to cultivate their children's interest in learning.

2. Students

K12 education covers elementary school, junior high school and high school. The needs of students at each stage of study are different, so the following is an analysis based on the needs of students at these three stages:

• The needs of primary school students are that the courses are lively and interesting, which can stimulate students' interest in learning, cultivate the habit of independent learning, and promote students' grasp of basic knowledge;
• The needs of students in junior high school are to fill in the gaps and continue to consolidate basic knowledge, and to learn problem-solving ideas and skills to improve their grades in a short period of time in order to prepare for the high school entrance examination;
• The needs of high school students are mainly to prepare for the college entrance examination. They need to learn problem-solving ideas and techniques while doing a large amount of practice to achieve the goal of practice makes perfect. In addition, due to the difficulty of the course, they need real-time tutoring and review of key points.

3. Platform & Teacher

Through the above analysis, it is not difficult to find that parents’ needs are:

• Whether the teaching staff is of high quality;
• Whether there is a scientific teaching system to ensure teaching quality;
• Whether the teaching can be personalized;
• Is the timing appropriate?

The students’ needs are:

• Is the course lively and interesting?
• Whether systematic knowledge can be acquired;
• Can you strengthen your practice?
• Whether to obtain real-time guidance and review of key points.

So how do platforms and teachers meet these needs?

1) Original teaching materials

The original teaching aids used by Yuanfudao keep up with the trend of curriculum reform and have established learning modules to enable students to acquire systematic knowledge. While ensuring a scientific teaching system, it can also teach students in accordance with their aptitude and divide classes to achieve personalized teaching.

2) Large classes with two teachers

First of all, Yuanfudao’s teacher recruitment is very strict. According to the information on the official website, senior teachers are hired with a 1% acceptance rate (the author has doubts about this and the real situation is difficult to investigate); these teachers not only come from famous schools, but most of them have more than 5 years of teaching experience. The teaching mode is live lectures by first-line teachers, focusing on expanding ideas. After class, the head teacher answers questions in real time in the WeChat group to consolidate the effect, and there are also replays of live classes.

The large-class dual-teacher model not only ensures the high-quality teaching level of the teachers, but also solves the problem of real-time tutoring. After class, the key points and difficult points can also be reviewed through live class playback.

3) Platform

Yuanfudao has also built a data research system based on big data, which can accurately determine students' knowledge weaknesses and provide intensive exercises, thus realizing personalized teaching methods. In addition, there are immersive classrooms such as live classes where students can interact with teachers, as well as in-class quizzes that test learning outcomes and allow students to concentrate. There is also a gold coin incentive setting to give students a sense of accomplishment, thereby arousing their interest in learning.

An exclusive course report will be generated after each class, allowing students and parents to simultaneously know the status of the class so that timely adjustments can be made.

4) Summary

Through the above analysis, it is not difficult to find that Yuanfudao K12 online education has well solved the needs of parents and students, and has completed some expected needs, which will improve user satisfaction.

5. Commercial Value Analysis

Revenue is the first goal of business development and an important indicator for judging whether business development is good. So is Yuanfudao’s business situation healthy? Since Yuanfudao’s core business is selling courses, we will use GMV, a commonly used data indicator in e-commerce, for analysis.

GMV = number of users * conversion rate * average order value

The improvement of any one of the indicators, namely the number of users, conversion rate, and average order value, will have a positive impact on the overall revenue. There are many factors that affect these three indicators. Next, we will focus on analyzing the means used by Yuanfudao to improve these three key indicators.

1. Increase the number of platform users

How can it be so clear? Because there is a source of living water. Only by continuously attracting new users can the platform ensure sustainable profitability. How does Yuanfudao attract new users?

There are mainly two ways: paid channels and free channels

First, large-scale advertising investment (paid channels)

Method 1: Precise advertising delivery: As long as you pay a little attention to some educational topics, you will soon see Yuanfudao related ads on video websites, WeChat Moments, and Zhihu. This can be said to be a relatively precise delivery method.

Method 2: Sponsor well-known variety shows; for example, becoming the exclusive online partner of "The Brain" for four consecutive years, becoming the exclusive title partner of CCTV's "Let's Talk", and being the special broadcaster of the 2020 CCTV Spring Festival Gala. These highly-known variety shows have a large user base, which brings a great degree of exposure to Yuanfudao’s brand.

Method 3: Official endorsement; whether it is selected into CCTV's "Brand Powering the Country" project, or becomes the "Official Online Education Service Sponsor of the Beijing 2022 Winter Olympics", or is recommended by the "Study Powering the Country" project, it has brought a certain official background to Yuanfudao, making parents more willing to trust this brand.

Method 4: Advertisements in elevators, etc. You can see Yuanfudao ads on bus stop billboards or in elevators. Although the sound of the ads in elevators (If your child likes a good teacher, choose Yuanfudao for online classes) is harsh, you have to admit that its slogan is as magical as the Nongfu Spring back then, and it lingers in your mind for a long time.

Large-scale advertising and marketing can greatly enhance brand awareness and increase user trust with certain official endorsements;

Second, excellent product reputation (free channel)

Users are always very cautious when purchasing educational products because the decision-making cost is too high. If you buy the wrong ordinary product, you can return it or exchange it and wait a few days before using it again. However, with educational products, every second counts in improving academic performance. In this way, the importance of word of mouth is more prominent, and users are more willing to listen to the recommendations of friends or old users when choosing educational products.

In order to build the ultimate reputation, Yuanfudao spares no effort to improve the user experience of parents. For example, here are two scenarios:

Scenario 1: Parents are usually at work, and when they get home from get off work, their children have already finished their classes. What is the learning effect like? Yuanfudao provides thoughtful classroom report push, which timely tracks background data and then presents children’s classroom performance to parents in the form of simple and easy-to-understand charts.

Scenario 2: Parent A and Parent B were chatting about tutoring their children with homework, but the content their children are learning now is different from when they were young, so it is difficult to tutor them. Parent B recommended Yuanfudao to Parent A. Yuanfudao provides a dual-teacher tutoring model, with famous teachers teaching in class and the head teacher tutoring after class. Parents have free time to cook for their children or do other things.

We can see that Yuanfudao is doing large-scale publicity to expand its brand awareness on the one hand, and is also improving user experience and enhancing the reputation of its products on the other.

Overall, the effect is quite significant. According to the latest statistics from Qimai Data, Yuanfudao has long occupied the top 3 in the monthly user activity ranking of educational apps, and the total number of users has exceeded 400 million, according to Yuanfudao.

2. Improve conversion rate

A user downloads an APP, browses a few pages, and then uninstalls the APP or never opens it again. Is this valuable to the platform? No. Only when the user makes a purchase on the platform and becomes a paying user, does the platform become valuable. So, what methods does Yuanfudao use to improve its conversion rate?

1) Low-cost trial classes

First, users are attracted to complete their first payment by taking a low-priced trial class, as shown in the following figure:

In fact, in this first step, some people will be skeptical about the quality of the course. How does Yuanfudao eliminate the doubts of these users? We can find that after clicking "Go Buy", the page jumps to the course details page.

On the course details page, we can see labels of famous teachers such as "8 years of front-line teaching" and "Master of Peking University". In addition, we can see the specific content of the course, such as "Core methods of reading and writing", etc. Finally, there is gift information "22 pieces of teaching aids". Scroll down to see more detailed content and official endorsements such as CCTV's "Brand Powering the Country" project.

At this point, most people will choose to place an order, because the value of just 22 pieces of teaching supplies already exceeds the amount they need to pay. This is taking advantage of the fact that people like to "get a small bargain."

Then we entered the payment process. On this page, Yuanfudao also cleverly used the principles of psychology.

• Create scarcity of products. The remaining places in the class are prominently displayed at the top, suggesting to users that if they don’t buy now, they will not be able to get it, thus prompting users to confirm payment.
• Create a sense of urgency. Displayed alongside the remaining places is a countdown, which is accurate to milliseconds, giving people a sense of tension.

After the payment is completed, you need to add the class teacher's WeChat before class. The class teacher will ask some questions to understand the child's situation in detail, as well as the precautions before, during and after class. This step connects the user and the platform staff well. Later, before registering for the full-price class, the "class teacher" will play a certain guiding role.

2) Regular Price Course

In the course introduction section of the full-priced courses, Yuanfudao divides the introduction into four aspects: course, outline, evaluation, and details.

First, we can see the basic introduction of the course, including difficulty, class time and service. There are four main points that can promote users to place orders:

Serve:

Click on a service to see the details of the service, including free shipping of textbooks, independent class adjustment, timely answers to questions, playback at any time, live teaching, support for course withdrawal, etc. Especially the guarantee of support for course withdrawal makes users feel more confident when placing an order.

Details of the lecturer:

Click on the teacher's avatar to enter the teacher's details page, which will have a more detailed introduction, including the teacher's teaching certificate number, teaching experience, teaching achievements, teaching style, etc., allowing users to have a more comprehensive understanding of the teacher and make a reasonable judgment whether the teacher is suitable for themselves/their children.

Free trial:

The free trial content is an excerpt from the course, which allows users to more intuitively judge the teacher's teaching quality and style, and feel whether the classroom experience meets their expectations (in fact, if you find that you are not used to the teacher's style later, you can change classes within seven days of purchasing the course).

Post-test registration:

Registration after the test is based on a grading of ability levels according to the division of courses. Not all children are suitable for high-difficulty courses, so the test before registration can accurately test the students' learning level, and then users can make choices based on the actual situation of the children and purchase appropriate courses. The setting of the entry threshold actually satisfies the vanity of some parents to a certain extent, "Look, my child is different. Some people can't take the course my child has signed up for even if they spend money."

Secondly, we can see a specific course schedule on the outline page. After expanding it, parents can understand every detail of the course in detail, such as course chapters, class time periods, break time, etc. The scientific and regular course setting can bring a good experience to parents.

Then we can also see the evaluation display page, where we can see the evaluation feedback from previous purchasing users, which can provide a reference for purchasing courses. When the positive rate and a large number of positive comments are displayed in front of users, users will think this is worth considering, just like when we buy a piece of clothing or other things we don’t know about on an e-commerce platform, positive reviews are a very important reference.

Finally, we can also see the details page, which mainly provides an overall introduction to the course, a page display of famous teachers, and cooperative sponsorships with variety shows. On this page, the platform is mainly flexing its muscles to enhance user trust and recognition.

3) Others

The course format of the trial class is the same as that of the full-price class, and the teachers are also teachers with rich experience from famous universities such as Peking University and Tsinghua University. The quality of a course is not reduced in order to save costs.

3. Increase average order value

The average order value refers to the average purchase amount of each customer, which means that the average order value is affected by two factors: the single purchase amount and the number of purchases. Yuanfudao sells lessons based on periodic class hours. Its pricing rules have a lot to do with its R&D costs, etc. It is relatively stable over a period of time, but will be dynamically adjusted in the long run. Therefore, the single purchase amount is not the focus of our analysis. Instead, we focus on how the platform increases the number of user purchases, that is, the repurchase rate.

1) Encourage users to increase repurchase

First of all: teaching quality.

If the teaching quality is not high, old users who have purchased courses will definitely not repurchase them.

In order to improve the teaching quality, Yuanfudao strictly controls the entry threshold for teachers. Teachers are required to graduate from prestigious universities and have rich teaching experience. The official website shows that the admission rate does not exceed 1%.

Then there is a clear division of labor among the teachers. There is a team responsible for teaching and research, there are teachers responsible for after-school tutoring, and the teachers who teach are only responsible for teaching. This can ensure that professionals do professional things and put all their energy into one job, so they will do a better job.

At the same time, the development of the curriculum system is based on the syllabus of the Ministry of Education. On the one hand, it ensures the authority of the curriculum system, and on the other hand, it provides high-quality teaching tools and adds interesting links to improve the efficiency and teaching quality of classes;

Finally, the classroom report is an objective evaluation of the quality of children's listening based on big data analysis, which can facilitate teachers to adjust teaching methods in a timely manner and ensure that every child has gained something.

All the above measures help improve the stability of the platform's teaching quality, thus ensuring the improvement of course effectiveness.

Secondly: class experience.

If parents have poor class experience on this platform, they will not repurchase the courses.

Enough teachers to choose from:

After parents buy classes, the teacher's style is indeed not suitable for children, and it will inevitably affect the class experience. Yuanfudao has attracted many famous teachers to join with high salaries, ensuring the diversity of parents' choices. In addition, the shifts can be changed within seven days of payment.

Visual learning effects:

In terms of visualizing children's learning effects, Yuanfudao has also done a lot of work, such as using big data analysis technology to analyze and record classroom quality and promptly feedback to teachers to guide teachers to optimize teaching mode; parents can also easily understand their children's learning progress and learning situation in a timely manner through the push of classroom reports; the learning effect of K12 education products is a key factor affecting the repurchase rate. As long as they can truly see the growth and changes of their children, parents are willing to continue to purchase on the platform again.

2) Induce users to increase their purchase amount once

In terms of single purchase amount, you can find the function of course registration on Yuanfudao. No preferential policies were found during the author's experience, but it is not difficult to guess that Yuanfudao wants to increase the user's single purchase amount in this way, and can launch preferential policies at special time nodes to encourage users to complete orders.

In summary, it can be seen that Yuanfudao has made a lot of efforts to optimize its revenue model, whether from products or services, which laid the foundation for success.

Continuously attracting new users and increasing conversion rate and customer unit price, the effect is still very good at present. This is one of the reasons why investors are interested in investing.

6. Product Iteration Analysis

According to the cumulative download volume (Android) curve of Kuchuan Shangyuanfudao, we can see that since Yuanfudao was launched, the growth of users has been mainly divided into three stages, a period of slow development, a period of stable growth and a period of "J-shaped" curve growth.

During these three stages, Yuanfudao has made different efforts in product iteration. Let’s take a look together.

1. Phase 1: Cold start phase

Before December 2015, the V1.0-V1.5 version was the cold start stage of Yuanfudao's products. At this stage, Yuanfudao's main goal is to build core competitiveness.

It mainly does the following three aspects of work

• Complete basic functions. Supporting pre-class practice of taking photos and answering answers, adding new order functions, etc. are all improving basic functions.
• Add course categories. High school mathematics, physics and chemistry 1-to-1 tutoring and semester classes have been launched, enriching the categories of courses and providing users with more choices.
• teacher. The continuous optimization of the teacher evaluation function is to make it easier for users to choose their ideal teacher. It conforms to Yuanfudao's concept that "teachers' training and tutoring for students is the essence of education."

In addition, Yuanfudao has launched the sharing function of the course introduction page and the teacher’s personal page. Sharing means that more people can see it and means rapid spread. This action marks that Yuanfudao is preparing to enter the second stage of the product.

2. Phase 2: Build operation tools

Before February 2018, the work done by Yuanfudao in V2.0-V5.17 was mainly to establish operations on and off-site, and gradually increase the number of users.

It mainly does the following aspects:

• Improve and optimize existing functions. For example, if you can use gestures to quickly forward and backward, support batch download course playback, and only view teachers' speeches in the discussion area, the improvement of functions can further improve the satisfaction of old users, and combined with off-site operation tools, the purpose of user growth can be effectively achieved.
• Construction of off-site operation tools. At the end of the cold start stage, we can see that Yuanfudao wants to guide users to share off-site. In this stage, the sharing function of purchasing courses has been added, which more directly realizes the effect of off-site operation.
• Construction of on-site operation tools. Added the fastest answer to the ranking list, and added Xiaoyuan emoticon packages in class groups to enhance user stickiness through interesting forms and enhance interesting experience.

What is more worth mentioning is the launch of the shopping cart function. The shopping cart function is particularly useful for e-commerce products. It increases the average customer price through various activities such as full discounts. The shopping cart function provides unlimited possibilities for Yuanfudao to increase the average customer price and achieve greater commercial value.

3. Stage 3: Improve learning scenarios and seize market share

Before August 2018, Yuanfudao only tried his best to learn the learning scenarios. He started to move continuously in January 2019 and quickly improved the learning scenarios. The author speculated that this has a lot to do with its biggest competitor's two consecutive rounds of huge investments in July and November 2018.

The new standing interactive classroom for primary school English is Yuanfudao's first attempt to expand learning scenarios, but there has been no other action for nearly half a year. Until after trying again in January 2019, the subsequent versions were expanding learning scenarios. At the same time, Yuanfudao also accelerated its progress in operations, constantly naming popular variety shows, and advertisements were everywhere, and it was even endorsed by CCTV.

Judging from the data at this stage, the number of users showed explosive growth, and there are no signs of slowing down at present. This shows that Yuanfudao's product and operation strategies are relatively successful at this stage, and indirectly shows that Yuanfudao has great potential.

4. Summary

Overall, Yuanfudao's product rhythm is very good. In the early stage, it focuses on improving basic functions and developing core businesses, and there is no rush to promote it. On the one hand, the product is not yet mature and the experience cannot reach a very satisfactory level. On the other hand, it is more effort to polish the core businesses to enhance the competitiveness of the product.

In the middle, Yuanfudao began to try to build operation tools, especially in the site, which can not only stabilize old users, but also attract new users through word of mouth and achieve smooth progress; in the later stage, Yuanfudao began to make efforts to continuously expand new learning scenarios in terms of products to meet different user needs; and then attract more users through large-scale operation and promotion.

7. Product structure analysis

We already know that products are constantly optimizing through iteration. What are the needs of users? How are they distributed in the APP?

This requires us to do product structure analysis. The following figure is the product structure brain diagram of Yuanfudao V7.21.2:

For the sake of analysis, the author sorted out the following table by sorting out the product structure of Yuanfudao according to users, scenarios, needs and functions:

1. Overall analysis

Yuanfudao’s teachers have an exclusive APP, and their needs will not be analyzed here. Yuanfudao APP meets the needs of parents and students. The lower grades may meet more of the needs of parents. The higher grades may meet more of the needs of students more of the needs, and the overlap rate of demand is very high. Therefore, except for the unique needs, the two are analyzed as one user.

When users use Yuanfudao, three demand scenarios will arise:

• Want to know before buying a class
• Payment issues during purchase
• Operation after purchasing courses

Before purchasing courses: What is the Yuanfudao platform the first thing users want to know about? At this time, you can get to know Yuanfudao through the text and videos of "Learn Yuanfudao in one minute".

After getting to know Yuanfudao, users began to choose courses, but at this time they still don’t know much about the reliability of the course system, faculty, and platform. These needs can be met in the course outline, course details, teacher details, teacher evaluation, and brand display of Yuanfudao’s course details page.

After understanding these, users will also be skeptical about the style and quality of the course. Yuanfudao solved this need through the free trial design, allowing users to experience the course before paying, reducing the need to change shifts due to discomfort with the course style. You can also view the reviews of users who have purchased to verify the quality of the course.

In addition, users also hope to have consultation before purchasing classes, and there are people who don’t understand any questions at any time. Yuanfudao has made consultation modules on the homepage and course details pages to provide online customer service and communicate with users quickly. There is even an after-sales telephone recommendation course after consultation, which is a very complete sales system.

In the purchase course: Even if you have a relatively comprehensive understanding of Yuanfudao, you will have a certain sense of distrust of the platform during the payment process, and you want to know more about its business status, charging standards, and teaching qualifications; Yuanfudao displays the registration content and publicizes the commitments on the payment page, and introduces the above information in the filing and attaches the QR code for the supervision and reporting of the Beijing Municipal Education Commission. These can provide users with a sense of security.

In terms of payment methods, Yuanfudao has opened up a series of mainstream payment methods such as WeChat, Alipay, and bank cards, and provides QQ wallet payment and parent payment functions to meet the payment needs of all ages to varying degrees.

After purchasing the course: for students, class schedule is the most important thing, because it requires pre-class preparation, careful listening during class, and reviewing the key points after class, and planning the time in advance. In this regard, Yuanfudao provides a course calendar function on my course page, which can clearly show which time each class is at, which helps students make plans in advance.

In addition, reviewing the key and difficult points is an important way for students to improve their grades. Students may still understand it in a live class; it doesn’t matter, Yuanfudao provides offline course functions on my course page, so that students can watch class videos repeatedly and overcome key and difficult points in a timely manner.

Click on my course to enter the details page. Class materials, classroom tests, and mark records correspond to pre-class preview, test the effectiveness of listening, and review class notes. Linked together and clear logic. It meets students' learning needs in a continuous stage.

For parents, the most important thing is to see the improvement of their children's grades and understand their children's listening effects. This requirement is met by binding WeChat public accounts and pushing learning reports; mainly because WeChat is a social tool that is used very frequently in daily life, and pushing WeChat public accounts allows parents to no longer have to open a new APP. Moreover, WeChat's attribute is social networking, which can help Yuanfudao achieve the purpose of word-of-mouth fission.

Finally, Yuanfudao provides a humanized "payment within seven days" shift change service, which solves the problem of users being inadequate to the teaching style or mismatch in the course difficulty.

In summary, we can see that Yuanfudao’s functional design can well meet users’ needs before, during and after purchasing classes; and also have a good control over details, such as high-frequency key functions highlighted on the homepage, and the function distribution is relatively reasonable, which is in line with the user’s operating habits.

Overall, the functional structure is clear and can effectively solve user needs. It is a very excellent product.

8. Operational Path Analysis

Products and operations are always in love and fight each other, but as stated in the book "Light of Operations", products are responsible for defining and providing long-term user value, and operations are responsible for creating short-term user value and assisting products in improving long-term value; therefore, an excellent product must be inseparable from the joint efforts of products and operations. Next, we will analyze how Yuanfudao helps products grow rapidly through operations according to the AARRR model.

1. Recruiting new customers (A)

In terms of customer acquisition, there are currently the following common methods on the market: own traffic customer acquisition, product transition customer acquisition, social marketing customer acquisition, media matrix customer acquisition, SEO customer acquisition, community customer acquisition, telemarketing, and reprinting.

Yuanfudao mainly uses the following types:

1) Receive customers from product leap

Yuanfudao has multiple products such as Xiaoyuan Search and Yuanfuku, forming its own private domain traffic pool; Yuanfudao pushes course information to users through tool APPs, pulling users to the live course platform, and then monetizing through other operational operations. This is to drive low-frequency course purchases through high-frequency tools.

2) Social marketing customers

In terms of social marketing and customer acquisition, Yuanfudao has also made various major moves, attracting new customers by increasing popularity.

Below are some of the more representative marketing activities compiled by the author:

Method 1: Name variety show

• In January 2019, it became the exclusive online tutoring partner of "The Brain's" exclusive strategic cooperation, and launched the customized course of "Primary School Mathematics Ability Training Camp" simultaneously with the program, and will carry out strategic cooperation throughout the program.
• In January 2020, Yuanfudao announced that it had reached a cooperative relationship with CCTV's "Chinese Poetry Conference" (Season 5).
• On February 26, 2020, Yuanfudao Online Education and Liu Jia, a professor of psychology at Beijing Normal University, launched a popular science video of the "Youth Epidemic Prevention Plan", teaching epidemic prevention and control knowledge in daily life in animation, helping primary and secondary school students to spend this special period healthy and safely.
• In July 2020, Yuanfudao announced that it had become the exclusive title sponsor partner of CCTV's "Let's Talk".

Method 2: Cross-border cooperation

• In August 2019, Yuanfudao and Xuexi Qiangguo cooperated for the first time. Yuanfudao's exclusive original course "Dore-Mi Classical Music Introductory Course" was selected for "Xuexi Qiangguo" and received a key recommendation.
• In January 2020, top scholars were invited to give free lectures on master humanities classes, bringing together scholars such as Zhou Guoping, Yu Qiuyu, Meng Man, Yi Zhongtian, Kang Zhen, Ji Lianhai, and Liu Yong to teach Chinese culture live.
• In January 2020, Yuanfudao jointly studied and strengthened the country and launched the special topic of "Homeschooling (Primary and Middle School Classroom)"; primary and secondary school students across the country can watch courses simultaneously by logging in to the "Study and Strengthen the Country" App.
• On July 13, 2020, Yuanfudao Online Education became the official sponsor of the 2022 Winter Olympics and Paralympics in Beijing. This is the first time that the Olympics have joined hands with online education in the history of the Olympics.

Method 3: Charity

• On January 25, 2020, it was announced that Yuanfudao had donated RMB 10 million to Wuhan to fight the novel coronavirus epidemic. The donations are mainly used to purchase medical protective supplies and testing equipment that are urgently needed by frontline medical institutions.
• On January 29, 2020, Yuanfudao Online Education announced that it will provide free consolidation preview classes for primary and secondary school students across the country; at the same time, it integrates all the company's high-quality educational resources, opens up the core functions of its products such as Yuanfudao Online Class, Yuantuku, Xiaoyuan Search, Xiaoyuan Oral Calculation, Zebra AI Class, etc., and provides series of support for students during the extended winter vacation.
• On February 10, 2020, during the period when primary and secondary schools across the country were postponed, in order to help junior high school graduates from all over the country prepare for the junior high school entrance examination at home, Yuanfudao Online Education Company has successively launched a "free live class" for primary and secondary school students across the country, and its Yuantuku App launched another "English mock exam with millions of people online at the same time".
• On April 1, 2020, in the face of the postponement of the college entrance examination, Yuanfudao Online Education announced that it will provide free 90-day sprint preparation services to senior high school students across the country. At the same time, in order to alleviate the employment pressure of 2020 college graduates, Yuanfu guided the employment notice to more than 3,000 fresh graduates in Wuhan, "It is expected that more than 10,000 jobs will be provided to Wuhan by the end of 2020."

3) Media Matrix Acquisition

The development of the Internet has made users' time divided by various platforms, becoming increasingly fragmented, and it is not realistic to make users' attention concentrate for a long time. Therefore, the strategy adopted by Yuanfudao is to establish official brand accounts on various platforms, and through certain content output, users can repeatedly receive Yuanfudao's brand information.

Yuanfudao has established its own official brand accounts on TikTok, Weibo, WeChat official accounts, and Bilibili. The operation status is as follows:

• Douyin: On Douyin, Yuanfudao has 29.1w fans, and the highest number of likes from the video reaches 35.3w. At the same time, it has opened a product window, so users can place orders and buy classes directly, and then take classes on their own platform.
• Weibo: On Weibo, Yuanfudao’s fans have 28.90,000 fans, and have formed the brand’s communication and influence through operational interactive activities such as forwarding lottery draws.
• WeChat official account: On the one hand, the official account is used as a link to link parents, and its function is to send learning reports to parents. On the other hand, it is also a tool to spread brands on WeChat. Most of its articles produce relatively high-quality education-related content, which can trigger users' spontaneous forwarding, so you can often see 10w+ explosive articles appear.
• B station: Yuanfudao's fans have 3.50,000 fans on B station, the highest number of video views reached 25.70,000, and 1,769 comments

2. Stimulate activity (A)

The definition of activation is that the user completes a core task on the platform and has a good experience.

The main goal of stimulating activity is to improve daily and monthly active users, and there are two main factors that affect the user's activity indicators. On the one hand, it is the number of times the user visits the application, and on the other hand, it is the length of time the application is used.

Increase the number of application visits:

• For new users, a good experience of the first visit is the basis for ensuring their subsequent activity. In this regard, Yuanfudao's function page is very concise, and functions with high frequency are placed in places that users can find quickly, which is very friendly to new users who use it for the first time.
• For old users, Yuanfudao uses more message pushes such as: signing in and receiving gold coins, limited-time special courses, etc., in this way, inducing users to open the APP multiple times

Improve usage time:

• In terms of improving the usage time of new users, Yuanfudao adopts the core function of providing users with high-quality experience classes and allowing users to experience the core functions of live classes.
• In order to improve the usage time of old users, Yuanfudao has built a gold coin system. You can get gold coins by pre-study before class, submitting after-school exercises on time, attending classes, etc. The gold coins can be redeemed for physical rewards in the mall.

3. Improve retention (R)

On the basis of stimulating the activity of new users, improving retention has become the main goal of the platform. At this stage, whether the platform's functionality is perfect and whether the classroom content is enriched are the main factors that determine user retention.

1) Is the functionality perfect?

There is a detailed explanation of functionality in the section on product structure analysis, and will not be repeated here.

2) Is the classroom content sufficient?

Yuanfudao’s teaching material plan is developed in a certain way based on the reform plan of the Ministry of Education. The teaching teachers are famous teachers in Tsinghua and Peking University, so there is no doubt about the teaching content. In addition, Yuanfudao provides an immersive classroom, such as teams to PK in class, situational interaction, self-developed animation videos throughout the classroom, etc., all to make the classroom experience closer to reality. Virtual real scenes + high-quality teaching content make the classroom content very vivid and fulfilling.

4. Increase income (R)

Regarding the methods of increasing income, there is a detailed analysis in the section on the commercial value analysis, and I will not repeat it here.

5. Share Communication (R)

Sharing and communication is a way to attract new users through word-of-mouth fission. In this regard, Yuanfudao has done the following two aspects:

• To help charity, Yuanfudao donated 10 million yuan to help Wuhan during the epidemic, and also opened free live courses for primary and secondary school students across the country to study at home. At the same time, in order to alleviate the employment pressure of 2020 college graduates, Yuanfudao issued employment notices to more than 3,000 fresh Wuhan graduates.
• Set sharing buttons on the course details pages, teacher details pages and other pages in the APP, which makes it easier for users to share and forward them outside the site.

IX. Conclusion

Through the overall analysis of the K12 online education market and Yuanfudao, we can draw the following conclusions:

1. The combined influence of policies, economy, social culture, technology and other factors has promoted the rapid development of K12 online education, but at present, there is still a lot of room for this market, and K12 online education will still maintain stable and rapid growth in the next few years.
2. In the K12 field, classics, centrists and avant-gardes each have their own advantages and disadvantages. As a typical centrist player, Yuanfudao adopts the "big class dual-teacher" live class to defeat his opponents in the competition. The most important thing is how to build a strong curriculum system through self-development to make up for his own disadvantages.
3. In the industry, Yuanfudao is not the only one. As its biggest competitor, Zuoyebang has been pressing forward step by step. The core business of the two, the source of teachers, the source of textbooks, the business expansion, etc. are basically the same, and the financing situation is also very smooth. It is not known who will win in the end, but we know that what impresses users is definitely not capital, but constantly meeting users' needs.
4. The main participants in K12 online education include parents, students, platforms & teachers. If the platform wants to achieve rapid development, it must meet the needs of good parents and students. Only by relying on product experience to impress users can we obtain user support and generate user value.
5. Yuanfudao is currently doing a very good job in attracting new products, increasing conversion rates, and increasing customer unit price. He first acquires new users through various channels, and then converts users into regular course users through high-quality low-priced courses. At the same time, he continuously optimizes the products and successfully leaves users on the platform to continuously repurchase courses. Yuanfudao has the function of making shopping carts, but when I wrote this article, I did not see its marketing activities. A series of discounts through shopping carts can actually increase the user's single purchase amount, which is also a very important influencing factor in the increase in customer unit price.
6. The iteration process of Yuanfudao can be roughly divided into three stages. The cold start stage continuously improves basic functions and builds core competitiveness; the operation tool stage is built, on the one hand, the off-site sharing function is done, and on the other hand, the in-site operation tools such as rankings and class group emoticons are made well to improve the user's stickiness; the learning scenario stage is improved, and learning scenarios such as text reading and role-playing are continuously launched, further meeting the needs of users, and combining a large number of operation activities to continuously increase the number of users. Overall, Yuanfudao's iteration rhythm is very good. In the early stage, the product is polished to improve the user experience, and then start large-scale operation and promotion after the platform's retention rate reaches a relatively stable state.
7. Yuanfudao's product structure is also very good. On the one hand, it can meet user needs well. On the other hand, it places functions with high frequency in a prominent position, bringing users a good product experience.
8. As stated in the book "Light of Operations", products are responsible for defining and providing long-term user value, and operations are responsible for creating short-term user value and assisting products in improving long-term value; Yuanfudao has achieved good results in attracting new customers, stimulating activity, increasing retention, increasing revenue, and sharing and disseminating through rhythmic operation activities. Yuanfudao's success can be said to be a perfect cooperation between products and operations.

The above is the author's analysis of the reasons for Yuanfudao's success from some systems such as industry, competitors, user value, commercial value, product iteration, product structure, and operations. It can be seen that behind each successful product, there is careful design and operation, even a small function has its own internal logic. Learning is endless, so I will encourage you.

10. Future Outlook

Through the above, we have a clear understanding of how Yuanfudao has risen rapidly in just a few years, and we also know that there is still a lot of room for the future market. So next we can analyze where Yuanfudao's future should go through the SWOT model.

Through the above analysis, we can see that if Yuanfudao wants to go further, he should pay more attention to the following points:

• How to enhance students' enthusiasm for active learning? In this regard, we can see that Yuanfudao has made attempts. When improving the learning scenario, self-developed animation videos throughout the course are added to make the classroom lively and interesting, so as to stimulate students' initiative; but this alone is not enough. Yuanfudao needs to explore more in-depth. For example, in terms of strengthening teachers' supervision of students, Yuanfudao may need to combine eye tracking technology to monitor students' learning status in a timely manner, notify teachers in real time, and give students eye-catching tips.
• While expanding, Yuanfudao must strengthen internal supervision of the company and establish a stricter screening and employment mechanism to ensure the orderly operation of the company.
• Against the backdrop of national poverty alleviation, small cities and rural areas may still be very burdened to bear offline tutoring courses; but Yuanfudao's pricing is relatively friendly, which is also an effort to imbalance in educational resources. For Yuanfudao, market sinking is an opportunity to occupy market share.
• No one dares to say how long the impact of the epidemic will last, but what Yuanfudao can do is to maintain the level of operation. The establishment of a brand image does not last overnight, but it will fall for a moment.
• On the premise of maintaining the normal operation of core business, Yuanfudao needs to explore new business models and try to break the current situation. If you want to stand out from a bunch of strong opponents, you can only innovate along the way; for example, to develop quality education such as interest and hobbies (Go, music, etc.), or try to develop regional teacher entry sections based on the user's geographical location, and then use headhunting companies to explore famous teachers from various offline education institutions to provide users with more diverse choices.
• Policy has always been a double-edged sword for enterprises. Yuanfudao must strictly abide by laws and regulations, adjust the teaching structure and content in a timely manner according to the policy, and must not take risks and touch the law for a little profit, as it will only make the gains less than the loss.

Author: Lv Yanhong

Source: Lv Yanhong