On March 31, 2020, Yuanfudao Online Education officially announced that it had received the latest round of financing of US$1 billion. This round of financing was 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.

During the COVID-19 epidemic, Yuanfudao Online Education took the lead in donating 10 million yuan to help Wuhan, and launched free live classes and opened the core functions of all its learning products to help primary and secondary school students across the country study at home during the extended winter vacation. During the epidemic, a total of 20 million people attended online lectures, the online education duration was 50,000 minutes, and 1.23 million people took online mock exams, which received enthusiastic attention.

Yuanfudao online education currently has more than 400 million users nationwide and is the first unicorn company in the domestic K12 online education field. As competition in the K12 online education field becomes increasingly fierce, how did Yuanfudao develop step by step to achieve its current industry position? Why do so many users choose Yuanfudao?

This article will analyze these aspects and help you understand the development of Yuanfudao and the entire K12 education industry.

1. Industry Analysis
2. Analysis of typical players 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. Summarize

1. Industry Analysis

In China, K12 education refers to 12 years of basic education, including 6 years of primary school, 3 years of junior high school and 3 years of high school.

According to the development time, the development history of the K12 education industry has roughly gone through three stages: a period of sustained demand growth, a period of explosive growth, and a period of mature development. So, how did K12 online education develop so rapidly? What are the future development trends?

Below we use the PEST analysis model to explore the reasons behind this.

1.1 Politics

In February 2016, Internet education was included in the new version of the "National Key High-tech Fields" list. Internet education companies have the opportunity to be recognized as high-tech enterprises and enjoy tax and other preferential policies.

In January 2017, the "13th Five-Year Plan for National Education Development" encouraged social forces and private capital to enter the Internet field in various ways and promote the development of new "Internet + Education" business models.

In April 2018, the Ministry of Education announced that by 2022, the development goals of "three comprehensives, two highs, and one large" will be basically achieved. That is, teaching applications will cover all teachers, learning applications will cover all students of appropriate age, digital campus construction will cover all schools, the level of informatization application and the information literacy of teachers and students will be generally improved, and a large "Internet + Education" platform will be built to promote the transformation from special education resources to large education resources, from improving the information technology application capabilities of teachers and students to comprehensively improving their information literacy, and from integrated application to innovative development. Efforts will be made to build a new talent training model under the conditions of "Internet +", develop a new model of Internet-based education services, and explore a new model of education governance in the information age.

In March 2019, the government proposed "Internet + Education" for the first time in its work report to promote the integrated development of urban and rural compulsory education.

In June 2019, the central government issued the "Opinions on Deepening Education and Teaching Reform and Comprehensively Improving the Quality of Compulsory Education." Encourage "education + Internet", further weaken scores, and continue to advocate "burden reduction". At the same time, "the integration and application of information technology and education and teaching" is still encouraged, but the relevant review mechanism must also be strengthened. This is also in line with the guidance previously issued by the Ministry of Education. Education informatization is the general trend, but not all "flies and mosquitoes" can come in. Supervision will become the new normal.

Against the backdrop of widespread government attention and encouragement for “Internet + Education,” the country vigorously encourages private teaching institutions, vigorously promotes the development of Internet education, and comprehensively promotes online education. Online education will also be included in the scope of supervision. In this gradually standardized policy environment, resources will be concentrated on capable, highly standardized and professional flows. Although regulatory measures are tightened, the country still encourages the development of online education, and the K12 online education field has great potential.

1.2 Economy

The scale of China's K12 online education market has maintained steady growth in recent years. According to the data from iiMedia Research, the scale of online education users in China will reach 309 million in 2020, and the scale of K12 online education users will reach 37.656 million.

The national residents' income and consumption expenditure have continued to grow, and spending on education, culture and entertainment has also gradually increased. By 2018, spending on education, culture and entertainment accounted for 11.21% of total spending.

In 2019, the per capita consumer expenditure of the national residents was 21,559 yuan, a nominal increase of 8.6% over the previous year. Among them, the per capita consumer expenditure on education, culture and entertainment was 2,513 yuan, an increase of 12.9%, accounting for 11.7% of the per capita consumer expenditure. It can be seen that the investment of Chinese residents in education has increased year by year. The parents of K12 students are generally between 30 and 45 years old, in the rising and golden period of their careers, with better economic conditions and stronger spending power.

From the above data, it can be seen that relying on the huge online education group, with the gradual increase in national income level and education expenditure, K12 online education has a good development momentum.

1.3 Society

The social factors that led to the development of K12 are mainly manifested in three aspects:

First, China has a huge number of students at the K12 stage, but the number of admissions to high-quality high schools and universities is limited, making the junior high school entrance examination and the college entrance examination very difficult, with low admission rates and fierce competition.

Second, due to the differences in economic development, historical evolution and policy preferences among regions, there is a huge gap in educational resources at the K12 stage among different regions within the same province, city or autonomous region.

Third, as the parents of K12 students gradually become those born in the 1980s and 1990s, compared with those born in the 1960s and 1970s, they are more educated, pay more attention to their children's education, and are more willing to invest more in their children's education.

1.4 Technology

The development and continuous progress of science and technology have provided more room for the development of K12 online education.

Students in my country's K12 stage are digital natives. With the popularization of mobile Internet and smart phones, K12 students grow up surrounded by various smart devices such as smart phones and tablets, live under the influence of digital technology, and are very dependent on the Internet to obtain information and conduct interpersonal communication.

In terms of learning, there are extremely rich channels for acquiring knowledge, reading habits are nonlinear, learning methods are highly personalized, and the quality of courses is very high. The use of digital learning devices and resources has gradually become a habit of life and learning.

Informatization is an effective means to achieve educational diversity and personalization. The development of technologies such as cloud computing, big data, and artificial intelligence enables education practitioners to accurately portray the individual characteristics of each learner, thereby providing differentiated education supply based on the specific needs of each learner while providing large-scale education. This will solve the contradiction between scale and personalization that has long plagued the education sector and achieve high-quality educational balance and high-level lifelong education.

1.5 Summary

The influencing factors at the above four levels have jointly driven the popularity of the K12 online education market in recent years. What will be the development trend of this industry in the next few years? Is there enough market space?

With the increasing maturity of Internet technology and mobile Internet infrastructure and the large-scale migration of user habits to online, my country's online education industry has been showing a continuous warming trend since 2014, with the market size and user scale continuing to grow.

Combined with the data analysis and forecasts released by multiple institutions, the market size of the entire online education industry will exceed 540 billion yuan in 2022; among them, K12 online education, as an important branch, will have a market size of more than 150 billion yuan in 2022. In the next few years, the market size of China's online education will maintain a steady growth momentum.

The penetration rate of the K12 online education industry reached its peak in March 2020. It is predicted that the penetration rate of the K12 online education industry will exceed 55% by 2022.

It can be seen that in the next few years, the K12 online education industry still has a lot of room for growth and will maintain rapid growth in the next few years.

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

In this fiercely competitive track, various companies are vying for the lead, including not only old traditional education companies with rich teaching staff and offline experience such as New Oriental and Xueersi. There are also Internet education companies that have developed rapidly in recent years, such as Yuanfudao, Zuoyebang, YiQiZuoye, Onion Mathematics, and Xuebajun. There are also some Internet giants whose newly developed educational products such as Tencent Classroom and NetEase Premium Courses have participated in this race. Moreover, so far, an oligopolistic market situation has not been formed like in some industries.

At present, the main players in K12 online education can be divided into three categories according to their start-up methods:

2.1 The first type of players: offline institutions expanding online

Leading institutions such as New Oriental, TAL Education, and ONLY were the first to go online. As the market gradually matured and the division of labor in the online education industry chain became increasingly refined, sensitive local leading institutions quickly followed suit.

The main reasons why traditional offline education and training institutions expand online education are as follows:

1. The need for defensive measures. The speed and scale of online education development have made traditional offline institutions dare not ignore it. The online K12 enrollment war in recent years can give us a glimpse of this.
2. The need to expand the original business, that is, to serve the existing market, expand the incremental market, and seek the second curve of institutional innovation and development. The advantages of this type of institution lie in its strong teaching and research capabilities, which can ensure a certain degree of continuous supply of teachers and have established a market reputation in local areas. Therefore, it has certain advantages in teaching capacity. But the disadvantage is that in the initial stage, they do not understand Internet thinking, lack technical reserves, and cannot operate online traffic.

2.2 The second type of players: starting with pure online education

Institutions of this type are represented by Zhangmen Education, Zuoyebang, and Yuanfudao. They have always been supporters of online education and are very optimistic about the online trend. They started with products such as question bank tools and like to build platforms. The core team is good at Internet thinking and has strong financing capabilities.

The weaknesses are the lack of teaching experience and weak brand reputation in the initial stage. It is necessary to continuously educate the market and cultivate users' online learning habits. It has now become a mainstream force in the industry that cannot be ignored.

2.3 The third type of players: Internet companies’ education layout

Represented by Tencent, ByteDance, and NetEase, in addition to doing traffic channel business in the education industry, they also directly enter the K12 course service and content service market. The advantage is that they have their own traffic platform and are good at Internet strategies, but they lack educational genes. They usually adopt the method of external acquisition + internal trial and error to develop products, using their financial and talent advantages.

Overall, there is still some distance to true success, but it is also very likely to stand out from the fierce market competition.

3. Competitive Product Analysis

According to the latest statistics from Qimai Data, among educational apps, Zuoyebang, Yuanfudao, and Xueersi Online Class are currently in the leading position, so we have identified Yuanfudao’s competitors as Zuoyebang and Xueersi Online Class.

3.1 Yuanfudao

3.1.1 Growth Path

In August 2012, it received US$10 million in Series A financing from IDG Capital.

In August 2013, it received US$7 million in Series B financing from Matrix Partners China and IDG Capital.

In July 2014, it received US$15 million in Series C funding from Matrix Partners China and IDG Capital.

In March 2015, it received US$60 million in Series D financing from CMC Capital, New Horizon Capital, IDG Capital, and Matrix Partners China.

In May 2016, Yuanfudao received USD 40 million in D+ round of financing from Tencent. Prior to this, Tencent also invested in Crazy Teacher, EasyTiKu, Kuakao Education, ABC360, New Oriental Online and other companies. But in the field of K12 online education, Yuanfudao is indeed the largest player.

In May 2017, Yuanfudao received US$120 million in financing from Warburg Pincus and Tencent in its E round and later. Warburg Pincus said that Yuanfudao is the only one in the K12 field with a mature development model.

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 announced that it had completed its latest round of financing of US$1 billion. The financing was 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.

3.1.2 Business Model

The company's products: Yuanfudao, Yuantiku, Xiaoyuan Question Search, Xiaoyuan Oral Arithmetic, and Zebra AI Class.

Development model: The company has a variety of online education products, providing users with diversified intelligent education services such as online courses, intelligent exercises, and problem analysis, helping students complete the learning loop systematically and efficiently. The company has always been committed to using technology to enhance the learning experience, stimulate learning interest, and cultivate scientific learning habits, so that Chinese students can more conveniently access high-quality educational resources.

Yuanfudao was founded in 2015. At the beginning, it relied on the reputation and user base accumulated by its sister software Yuantiku and Xiaoyuansouti to divert traffic. In the early days, Yuanfudao relied on its unique massive data-based teaching and research, focusing on students' weak links in learning, creating immersive classrooms, and enhancing the interactivity and fun of learning. Starting in 2019, it focused on large-class online live broadcasts, paying full attention to the learning process of each student through a dual-teacher format.

User scale: As of January 15, 2020, Yuanfudao has accumulated more than 400 million users. In 2019, Yuanfudao’s revenue was between 3 and 4 billion, and the renewal rate for primary school-age students was over 80%.

3.2 Homework Helper

Zuoyebang is an online education APP officially produced by Baidu. It is an educational product that focuses on taking photos to search for questions and solve them. The question bank contains 90% of the textbooks for primary, junior high and high schools nationwide, and supports online answering and solving of questions.

3.2.1 Growth Path

In January 2015, the photo-taking and question-searching function of Zuoyebang was launched; in June of the same year, Baidu split it off and established a new company, Xiaochuan Chuhai Education Technology (Beijing) Co., Ltd.

In August 2015, Zuoyebang's synchronized practice app was launched. In September of the same year, the company received US$25 million in Series A funding from Sequoia Capital and Legend Capital.

In September 2016, it completed a US$60 million Series B financing round led by GGV Capital and Xianghe Capital, with Sequoia Capital China and Legend Capital also following suit.

In March 2017, Zuoyebang's live classes were changed to Zuoyebang Yike; in August of the same year, it completed a US$150 million Series C financing round, led by H Capital, with Tiger Fund, Sequoia Capital China, Legend Capital, GGV Capital, Xianghe Capital and others all following suit.

In July 2018, Zuoyebang completed a US$350 million Series D financing round led by Coatue, with participation from new and old shareholders including Goldman Sachs, Primavera Capital, Sequoia China, GGV Capital, Xianghe Capital, Tiantu Investment, NEA, and Taihe Capital. Taihe Capital served as the exclusive financial advisor.

3.2.2 Business Model

The company's products include: photo search, homework helper, one-on-one tutoring, ancient Chinese text assistant, composition search, etc.

Development model: In Zuoyebang, students can get the analysis steps and answers to difficult questions through taking photos, voice, etc.; they can also interact and learn with teachers through the live classroom of Zuoyebang. You can quickly discover your weak points in knowledge and practice to supplement them accurately. You can watch live courses and learn interactively on your mobile phone. You can also connect with teachers online for one-on-one answers to your questions. In addition to studying, you can also communicate with students of the same age from all over the country and discuss interesting things in your study and life.

User scale: As of April 2020, the number of daily active users of Zuoyebang exceeded 41 million, the cumulative number of activated users has exceeded 800 million, and the total monthly active users of its apps have exceeded 170 million. In addition, this year during the winter vacation, the enrollment of full-priced classes in Zuoyebang's live broadcast classes exceeded 1.1 million, and the cumulative number of users served exceeded 49 million, with more than 12 million paying students.

3.3 Xueersi Online School

3.3.1 Growth Path

In 2008, Xueersi Online School was founded.

In 2010, it quickly opened up the market with high-quality recorded courses. It was listed on the New York Stock Exchange in the United States with a valuation of US$120 million.

Revenue in fiscal 2011 was nearly $2 million.

In 2015, the "live broadcast + tutor" model was launched in primary and junior high schools, which marked the beginning of a new round of performance growth.

In 2017, the company launched a personalized task learning system and introduced technologies such as facial recognition, voice recognition, and tactile interaction into online classrooms for the first time. The revenue growth rate reached 97.8% that year.

In the fourth quarter of fiscal year 2018, Xueersi Online School grew rapidly, with revenue increasing by 158.6% year-on-year, accounting for 8% of TAL's revenue.

In the first quarter of 2019, the operating income of Xueersi Online School accounted for 9% of the total revenue of New Oriental, or about US$50 million.

In 2019, it received US$500 million in financing from Hillhouse Capital.

3.3.2 Business Model

The company's products: Xueersi Online School.

Development model: Xueersi Online School was established and launched in 2009. Backed by the physical Xueersi offline brand courses, it accumulated a large amount of user traffic in the early stage. It is committed to providing children aged 3-18 with a "live broadcast + tutoring" dual-teacher teaching model, as well as teaching methods such as live classes, real-time interaction, in-class tests, voice assessments, and timely Q&A; it supports real-time online interactive teaching, in-class graphic handouts, academic science assessments, and all-round learning tracking by tutors; and it pushes personalized learning newspapers and other functions.

User scale: Xueersi has entered 55 large and medium-sized cities across the country, with over one million users.

3.4 Summary

3.4.1 Course Target Audience

The users of Yuanfudao, Zuoyebang, and Xueersi Online School are the same, all in the K12 stage from elementary school to high school.

3.4.2 Teaching Mode

Yuanfudao, Zuoyebang, and Xueersi Online School all eventually chose the dual-teacher model, which has become the standard approach for large-class live courses in online education. Under this model, famous teachers are able to focus more on teaching and research before and during class, and are freed from after-class guidance.

The investment in teaching and research not only helps famous teachers improve their professional capabilities and enhance their influence, but also improves the teaching effectiveness of the platform. Therefore, the dependence between famous teachers and platforms is higher and the uncertainty is reduced.

3.4.3 Business Model

In the K12 online education sector, Yuanfudao and Zuoyebang have similar business models. After retaining users through tool software, they use the accumulated reputation and user base to divert traffic to their course market. Xueersi started earlier and uses the user base accumulated through offline education to divert traffic to its online courses. The core business of these three companies all include the module of online live teaching.

However, at this stage, due to China's vast territory, there are significant differences in the economy, consumption levels, ideology and education policies of various regions. It is difficult for the entire industry to have one product or one model that is applicable nationwide. There is no clear dominant player in the K12 track.

It can be seen that in the next few years, industry brands and user acquisition will still be in a window of opportunity. Users will pay more attention to content + experience. Online education may invest certain resources in teaching and research, teacher training systems and student learning experience, and find more standardized and reasonable ways to promote the healthy development of the online education industry.

4. User Value Analysis

In the K12 online education market, there are four main participants: parents, students, teachers, and platforms. The business logic diagram of Yuanfudao is as follows:

If the platform wants to develop rapidly, it must try its best to meet the needs of parents, teachers and students, giving them more reasons to choose the platform.

So what are the needs of these three parties? How does Yuanfudao better meet their needs? Let’s analyze them one by one below.

4.1 Parents

As payers, parents’ needs are issues that we need to address urgently.

So what methods do parents generally use to educate their children?

4.1.1 Relying on the school’s inherent resources

Disadvantages of the school’s inherent resources:

• I cannot choose my own school, class or teacher, and I have no idea about the quality of the teachers.
• The education level and teaching staff vary from region to region.
• There are many students in the class with different levels, so teachers cannot customize learning according to each student's situation.

Therefore, parents hope to understand the teachers and choose teachers with strong professional abilities according to their own wishes, and the teachers can develop appropriate teaching plans based on the situation of their children.

4.1.2 Training institutions

This is also the method most favored by parents at present, because parents feel that training institutions are professional and authoritative, which can make parents feel more at ease. Moreover, offline tutoring classes allow teachers to have close contact with students, allowing them to better understand and monitor students' learning.

According to Aurora Big Data, more than half of parents prefer face-to-face offline teaching, and online video classroom methods are less popular, which also shows that online education has great room for development.

Not all parents accept offline tutoring classes. The reasons are probably as follows:

• Due to the phenomenon of false propaganda in some tutoring classes, parents are not assured of the teaching quality of tutoring classes
• Not familiar with tutoring classes and teaching staff
• The teaching method is too rigid, without any novelty or interest, and children will resist attending tutoring classes.
• The offline tutoring classes are not suitable at the right time, and pick-up and drop-off become a problem
• In small cities and remote mountainous areas, the teaching staff is weak and the teaching quality is worrying.

4.1.3 Teaching at home by oneself/relatives

Many parents choose to have themselves or their relatives tutor their children at home. They believe that this way of learning is more flexible, and they are more likely to pick up their children, so they can tutor their children in a more targeted manner.

However, since parents and relatives are not professional teachers, they have many deficiencies in knowledge reserves and teaching methods, which may cause children to dislike learning even more and become bored, which is counterproductive. At the same time, tutoring homework has become an important factor in destroying parent-child relationships. Interest is the best teacher. Children should be encouraged to develop the good habit of learning independently.

4.1.4 Home tutoring

Another way of learning that is favored by many parents of junior and senior high school students is to hire a tutor to teach at home. This method can avoid the trouble of going to offline tutoring classes, and parents can supervise at home. The time is relatively flexible. Usually one tutor is responsible for one child, which is more targeted.

The disadvantage of this method is that the tutors are usually college students or part-time teachers, the teaching methods are too rigid, the quality of teaching cannot be guaranteed, and the cost of tutoring is not cheap. This makes many parents reluctant to spend high prices and time to let their children "test the waters" even though they still have reservations.

It can be seen that although the above four methods have their own advantages and disadvantages, none of them can meet the current needs of parents well.

4.2 Children

At this stage, K12 education covers children born after 2000, who were born in an Internet age. This means that their way of acquiring knowledge is not limited to textbooks; they are more willing and able to obtain it from the Internet. Of course, due to their long-term immersion in the Internet, they are more receptive to new and interesting things. Therefore, if you want to arouse their interest, the content and form must be novel, otherwise it will definitely not attract them and the teaching purpose will not be achieved.

The needs of students at different stages are also different:

• Primary school stage: The learning pressure on students in primary school is relatively small. During this period, parents pay more attention to cultivating their children's learning habits, interests and hobbies, and ways of thinking. Students, on the other hand, focus on the fun of the teacher's teaching methods. Teaching courses through storytelling, playing games, doing handicrafts, etc. is a method that students are more receptive to.
• Junior high school stage: The academic burden in junior high school increases, and students have their own independent thoughts and consciousness. They are more eager to be respected. Therefore, teachers need to guide students to learn in the right way, design reward mechanisms, and actively encourage children to learn.
• High school stage: As the college entrance examination approaches, the study pressure and intensity in high school are undoubtedly the greatest, and students' demand for knowledge is more targeted and purposeful. Students are eager to receive efficient guidance from professional teachers, and they care about whether the teachers can teach them effective methods and techniques. This stage has the highest requirements for teacher ability, and of course it is also the stage when parents are most willing to spend money on their children.

4.3 Teacher

The quality of teachers is an important factor for parents to choose training institutions and is also one of the core competitive advantages of training institutions.

Teachers' needs:

• The need to realize one's own value or gain a sense of professional achievement is met through students' progress and parents' recognition.
• Increasing income, if teachers' income can be increased while the work intensity remains the same, is something every teacher is thinking about.
• With roughly the same income, factors such as working environment, commuting distance, atmosphere within the institution, etc. are also key factors that some teachers consider when choosing a company.

4.4 Platform

From the above analysis, we can conclude that:

• For parents, the current problems are: lack of understanding of the teaching staff, high time costs for pick-up and drop-off, difficulty in choosing a teacher of choice, insufficient professionalism of the teachers, inability to provide targeted tutoring for children, expensive tutoring fees, etc.
• For children, the most important concerns are whether the course can attract their interest, whether the teacher can solve problems efficiently and promptly, the teaching methods and techniques, etc.
• For teachers, professional fulfillment and competitive salary are what they care about most.

So, as a platform, how does Yuanfudao better meet the demands of the three parties and attract them to this platform?

4.4.1 High-quality teacher resources

Yuanfudao has relatively strict requirements on its teaching staff. The teachers are all teachers with bachelor's and master's degrees from double first-class universities with more than 3 years of teaching experience, or first-line teachers from famous universities with more than 5 years of teaching experience. The overall admission rate is about 1%, and the teachers’ teaching qualifications certificates will be publicly available on Yuanfudao’s official website for parents to check.

Such public information has greatly reduced parents' doubts about the teaching staff, satisfied parents' desire for famous teachers from Peking University and Tsinghua University, and solved the problem of uneven quality of teachers in most tutoring institutions.

The price of Yuanfudao’s online courses ranges from a few yuan to several hundred yuan. The prices are cheap and clearly marked, which also solves the problem of expensive and random charges by tutoring institutions. Moreover, Yuanfudao has abundant teacher resources, and parents can choose their favorite teachers, which also solves the problem that schools cannot choose teachers independently.

For small cities and remote areas with weak teaching staff and lack of high-quality educational resources, they can also learn knowledge and improve their grades through affordable Yuanfudao courses.

4.4.2 Teaching Interest

Yuanfudao has changed the boring teaching in traditional teaching and adopted interesting teaching that students currently prefer. It designs task incentives and gives students rewards during the learning process. It makes rational use of the current live broadcast technology to create an interactive experience with students in online classes that is more interesting and can stimulate students' interest in learning than offline classes.

At the same time, original teaching and tutoring materials are provided to comprehensively enhance students' learning outcomes. After each class, class reports are used to help us understand students’ learning situation and develop corresponding learning strategies. It can be said that every student can find the learning method that suits him or her best on the APP.

4.2.3 Data Teaching and Research System

Yuanfudao’s unique domestic K12 learning behavior database of tens of billions of levels allows teachers to better understand students’ needs and more accurately find each student’s weaknesses, so as to overcome them one by one. Even if there are a large number of students, personalized teaching plans can be customized according to each student.

4.4.4 Teaching Mode

In terms of teaching model, Yuanfudao adopts a dual-teacher model, with front-line teachers giving live lectures. After class, the class teacher will answer questions and solve problems encountered by students in their homework and daily studies in the group.

• Before class, students will be provided with courseware for downloading to facilitate their preview.
• During the class, the live class supports the teacher’s personal image display, PPT presentation, multimedia video, and annotation prompts on the handouts. During the student communication session in class, students can participate in discussions in the speaking area or raise their hands to do in-class exercises.
• After class, a discussion group is set up to discuss homework, and the head teacher answers questions online; in addition, the live class content can also be downloaded offline and supports unlimited recording and playback functions.

4.4.5 Systematic Curriculum Planning

In the product planning of system courses, we closely follow the curriculum reform direction of the Ministry of Education. Tailor-made most suitable educational products for students, who can choose different courses according to their grade and weaknesses. And according to different class types, we scientifically match students' learning goals and teach them in accordance with their aptitude.

For example, for senior high school students, Yuanfudao has set up special training classes for high-frequency test points, basic consolidation classes, classes targeting Tsinghua and Peking University, classes targeting 985, and classes targeting first-class universities, providing personalized tutoring for students of different levels, teaching students in accordance with their aptitude, and fully meeting the needs of students at all levels and stages of study.

4.4.6 More attractive salary system

According to recruitment information on various recruitment websites, the salary of Yuanfudao teachers ranges from 6,000 to 20,000, which is much higher than the salary of primary and secondary school teachers.

With the help of the Yuanfudao platform, teachers can explore more innovative teaching methods, create new teaching concepts, and no longer have to deal with inspections from school leaders, so they have more time to do meaningful things. In the dual-teacher model, the main teacher can get more training in different aspects than traditional teachers through live classes, and the assistant teachers can also grow quickly, which also gives teachers a sense of accomplishment.

Summary: Yuanfudao helps parents integrate high-quality teacher resources, provide children with a high-quality teaching system, increase the fun of teaching, combine systematic curriculum planning, and improve teachers' professional achievements through its excellent functions. These provide Yuanfudao users with a better user experience, which is why everyone chooses Yuanfudao.

5. Commercial Value Analysis

Yuanfudao’s current core business is large-class online courses with a dual-teacher model. An important indicator for judging whether a business can develop healthily is its operating income. Here we use the most commonly used data indicator GMV to analyze whether Yuanfudao’s core business is healthy.

GMV (gross merchandise volume) = number of users * conversion rate * average order value. An increase in any of the indicators, such as the number of users, conversion rate, and average order value, will have a positive impact on the growth of overall revenue, so next we will focus on analyzing the means used by Yuanfudao to improve these three key indicators.

5.1 Increase the number of users

In order to achieve sustained growth in revenue, a steady stream of registered users is the most basic guarantee for the platform. What actions has Yuanfudao taken to increase the number of users and enhance the brand and word-of-mouth effects?

5.1.1 Increase product awareness

Method 1: Sponsor a well-known variety show.

Yuanfudao launched "Day Day Up" in 2015 as a guest recording program.

In 2018, Yuanfudao became a partner of "The Brain" and held auditions for the fifth season of "The Brain". According to Yuanfudao officials, at the end of 2018, 110,000 people across the country signed up for the two-month global auditions through the Yuanfudao APP, 84% of whom were post-00 young students.

In 2019, Yuanfudao and "The Brain" took their cooperation a step further, inviting Liu Jia, the question setter of "The Brain" and director of the Department of Psychology at Beijing Normal University, to serve as the chief consultant and launch a customized "Elementary School Mathematics Ability Training Camp" course for "The Brain" simultaneously with the program.

In 2020, it became the exclusive interactive partner of CCTV's "Chinese Poetry Competition" (Season 5). This is the first time that "Chinese Poetry Competition" has introduced an interactive partner since its launch. Past champions and new contestants of "Chinese Poetry Competition" will also have the opportunity to appear on Yuanfudao to communicate and share with students.

It can be seen that every time Yuanfudao cooperates with a brand, it adopts the form of deep participation and is bound to its own APP content. It is not a simple exposure, but a targeted exposure made after understanding the real needs of K12 education users.

Method 2: cross-border cooperation.

As the peak of the 2020 Spring Festival travel rush approaches, Yuanfudao Online Education has signed a strategic cooperation agreement with China Railway's official APP "High-speed Rail in Your Hand", the operator of China Railway Jixun, to launch the national high-speed rail "online education on board" service for this year's Spring Festival travel rush. The two sides will jointly provide knowledgeable and interesting online learning content for primary and secondary school students on the journey, so that young travelers can enjoy a free and entertaining journey.

On April 10, 2020, Yuanfudao’s Zebra AI course appeared in the second live broadcast of Luo Yonghao, the former famous teacher of New Oriental, former founder of Smartisan Technology, and internet celebrity.

On July 13, 2020, Yuanfudao and the Beijing Winter Olympics Organizing Committee officially announced that Yuanfudao Online Education became the official sponsor of the Beijing 2022 Winter Olympics.

Method three: Be enthusiastic about charity.

During the epidemic, Yuanfudao teamed up with the "Study Strong China" online education platform to create a "Home Schooling" special topic and launched free live classes for primary and secondary school students across the country. This has a very positive impact on improving conversion rates, enhancing parental trust, and increasing its own visibility.

During the epidemic, Yuanfudao Online Education established cooperative relationships with 54 universities in Wuhan, held 127 online seminars, and provided more than 30 public welfare courses such as resume guidance and career planning for college students through live broadcast platforms, with more than 30,000 people participating in the courses.

After the outbreak, Yuanfudao Online Education made an emergency donation of 10 million yuan to Wuhan to purchase much-needed medical supplies, becoming the online education company that took the lead in providing assistance to the epidemic.

After the postponement of school opening in various places, in order to help students better plan their study and life, Yuanfudao Online Education provides free live classes for primary and secondary school students across the country. The courses cover knowledge consolidation learning, open classes by famous masters and youth role models, etc. More than 20 million students have signed up for online learning.

From the above methods, we can see that large-scale advertising investment can greatly increase the platform's exposure and thus attract new users.

5.1.2 Enhance brand reputation

Because educational products require users to invest a lot of time and money, the decision-making cost is very high. And because of the result-oriented nature of educational products, it is very important to hear successful examples and product recommendations from friends around you. Word of mouth plays a critical role in attracting new customers for educational products. Yuanfudao uses a variety of methods to build word-of-mouth:

Satisfy parents' desire to share. By forming classroom reports, test reports, etc., it is convenient for parents to show their children's progress and learning performance on WeChat Moments, which not only satisfies parents' desire to share but also builds word-of-mouth and creates fission.

Promote new customers by offering preferential treatment. For example: invite friends to attend classes together and win popular gifts, and receive the same training equipment as the strongest brain for free; invite new users to attend classes and receive monkey coins, gifts and other activities to motivate users, increase user participation, and promote brand image and related courses.

5.1.3 Building a traffic pool

"Use Yuanfudao for online classes, use Yuantiku for exercises, and use Xiaoyuansouti to find solutions to problems!" This slogan is the most favorable embodiment of Yuanfudao's traffic pool construction. Yuanfudao relies on the cross-promotion between different types of APPs under its own umbrella and takes advantage of the huge traffic pool that has been formed within the company to continuously improve its customer acquisition rate.

APPs such as Xiaoyuan Search, Yuanteku, and Xiaoyuan Oral Calculation are used as tools and traffic portals for Yuanfudao to attract primary and secondary schools to use this type of software, and thus drive users to use its online school products.

5.2 Improve conversion rate

After guiding users to the platform through various methods, the user who generates paid behavior is the effective user. Yuanfudao has the following ways to guide users to pay and thus improve conversion rates:

5.2.1 High-quality free trial classes and low-priced classes

Yuanfudao provides users with high-quality experience classes with rich content, such as: the special courses for key and difficult subjects of senior high school students are charged only 1 yuan, the wisdom courses for famous artists are 0 yuan to watch, free live classes for senior high school students, etc., allowing students to take the courses at a low cost and dispel users' concerns about the quality of the courses and the learning effect. During the epidemic, Yuanfudao even provided free live classes to people across the country, which had a very positive impact on improving conversion rate and popularity.

5.2.2 You can listen to paid classes and it is convenient to withdraw the class.

Before users purchase core special courses, they can listen for free, and support the behavior of not being satisfied with the class after purchasing. After listening to the first class, if users are not satisfied, they can withdraw before the second class. These methods have greatly improved users' consumption experience and willingness to buy classes.

5.2.3 Low pricing, high cost performance

The large-class double-teacher group class promoted by Yuanfudao generally costs 30 classes, with prices ranging from a few hundred yuan to more than one thousand yuan. The average cost per class is only a few dozen yuan. Compared with the pricing of courses that can cost thousands or tens of thousands of yuan in offline tutoring institutions, it can reduce users' risk expectations and help encourage first-time payment users to purchase.

5.2.4 Thoughtful shopping process

When opening the APP for the first time, the user will be asked to fill in the grade and gender of the child, and then recommend the corresponding courses based on the child's grade.

For high school courses, the courses are divided into high-end classes in Tsinghua and Peking University and ordinary classes. Users can choose courses according to their own situation. In order to help users distinguish whether they are suitable for high-end classes, they will have the ability to test before registering, and they can only register for high-end classes after passing the test. This also greatly reduces user mispayment and causes economic losses to users. After users have finished their regular classes, they can sign up for high-end classes, which also improves the renewal rate to a certain extent.

Each course will display the main teacher, class teacher, course cycle, daily class time, course difficulty, course syllabus, course evaluation course details, etc. in detail, so that users can choose courses according to their preferences after fully understanding the course.

After purchasing the course, the teacher will actively contact you 5-7 days before the class starts to understand the basic situation of the child. He will also send original teaching materials with the course and inform the class teacher of the contact information by text message. After adding the teacher’s friends, the class teacher will be invited to enter the learning group, which will be managed conveniently and quickly, and will also allow parents and students to answer questions easily and quickly. This also gives users a very good experience.

5.3 Increase Average Order Value

There are two ways to increase the average customer price: increase the single consumption amount of a single user and increase the consumption frequency of a single user over a period of time. According to Yuanfudao's current pricing strategy, the prices of summer summer classes in primary, junior and high schools are basically between 600 and 800, while the autumn system classes are 1400-1700. Let’s focus on how the platform increases the purchase frequency and renewal rate of users.

5.3.1 Improve the quality of the course

The cost of decision-making of educational products is very high, so the quality of the course is crucial. After attracting new users to listen and purchase courses through advertising/reputation, if the quality of the course cannot reach the level of satisfactory for parents, then after withdrawing from the course, parents' trust will be greatly reduced, and the platform will lose more users. Through the spread of word-of-mouth by parents, the platform will lose more users.

In terms of improving the quality of the course, Yuanfudao has adopted a variety of methods:

• Gather famous teachers. The quality of the teaching team is ensured through a flexible salary system, and famous teachers with rich teaching experience and good educational background are recruited with generous salary, and at the same time, by cultivating teaching assistant teachers, internal improvement is completed.
• Targeted curriculum system. Help students match courses according to different grades and subjects. Tailor-made courses for students of different goals and ages, which can solve the needs of students for personalized tutoring well.
• Systematic large-class courses covering all subjects. Yuanfudao has achieved comprehensive coverage of all subjects in terms of curriculum system, allowing every student to find a system class that suits them to the greatest extent, and to minimize the loss of users due to the inability to select courses.

5.3.2 Experience in class process and teacher feedback after class

Yuanfudao adopts a variety of methods to improve students' experience in class and after-school tutoring, and ensure parents' satisfaction in their children's learning process.

• Ensure learning experience. Through the dual-teacher classes and immersive classrooms in the large class, students can enjoy all-round tutoring before, during and after class, and through rich and interesting courses, they can capture their children's interests and improve their course experience;
• Improve parental satisfaction. The platform will notify parents of course reports, examination reports, etc., so that parents and students can understand their learning situation at any time. Parents have a comprehensive understanding of students' learning situation, and can feel their children's progress as soon as possible, so that parents can use it more with confidence.

5.4 Summary

Through the above analysis, it was found that only by continuously improving functions, enriching classroom resources, and strengthening faculty can the online education platform gain higher user retention and conversion rate. Yuanfudao has done a lot of work to continuously attract new new products to increase conversion rate and renewal rate, and ultimately improve the revenue GMV index.

In 2019, Yuanfudao Course Platform had more than 1 million paid users, with more than 160 million registered users, and the annual revenue reached RMB 1.5 billion. The "renewal rate" of its core business indicator increased from the initial 30%-40% to 70%-80%, the customer acquisition cost was reduced to hundreds of yuan, and the promotion conversion rate was about 42%.

In November 2019, the user data exceeded 250 million. In 2020, within two months after the outbreak of the epidemic, Yuanfudao announced that the national users reached 400 million, so Yuanfudao can obtain 8 rounds of financing within 8 years, reaching a valuation of 7.8 billion, becoming a unicorn in the K12 online education track. This shows that Yuanfudao will have a broader commercial market.

6. Product Iteration Analysis

In order to analyze the version iteration rhythm of Yuanfudao and explore the product iteration logic, all core versions of Yuanfudao are iterated as follows:

According to the above figure, according to the direction of functional iteration, Yuanfudao is divided into three stages for analysis.

6.1 The first stage: cold start of the product, improving basic functions

Version 1.0.0 to version 1.6.0 is the cold start stage of Yuanfudao. For the initial stage of the product, the purpose of iteration is to build the basic framework of the product and improve the basic functions.

Gradually launch three types of high school one-on-one courses, special courses and semester class courses, which can meet the needs of different users, add special courses and discounts, allowing more user experience courses and increase product exposure and traffic.

In the later stage, some measures were taken to improve the user experience: an offline course entrance was added, so that course playback could be viewed at any time, which would help students review; a function of viewing teacher evaluations was added, so that users could understand the teacher in advance before signing up for class, and make more favorable choices; a course playback added a display chat record function, which allowed users to understand other people's questions and answers during class while watching course playback, and could be more integrated into the course environment at that time.

6.2 Phase 2: Build operation tools and explore and improve learning scenarios

From version 2.0 to version 3.6, Yuanfudao realized the limitations of the 1-to-1 model, found the direction of product development, and began to concentrate resources to promote semester classes.

By building operation tools, such as supporting sharing after purchase and sharing red envelopes after purchase, we can increase the effect of attracting new products; supporting priority purchase of semester classes on the platform to attract traffic to semester classes; and adding the fastest correct answer rankings in classroom tests, etc., to enhance user stickiness.

This stage has been improved for many functions of the product, such as the addition of semester class adjustment function and online customer service, which optimized the user experience; supported batch download and playback of videos, and optimized the screening function to make it more convenient.

This stage is the stage where Yuanfudao's user base doubles. It was also in the later stage that Yuanfudao obtained a US$40 million investment from Tencent's D+ round and became a unicorn in the online education field.

6.3 Stage 3: Explore user needs and increase learning scenarios

In this stage, on the basis of the original curriculum system, Yuanfudao continues to explore the users' needs and make corresponding supplements and iterations.

In this stage, it mainly meets the learning needs of different users and continuously improves the user experience. For example, the live broadcast of primary school English classes, primary school English role-playing and foreign teacher animations have been added, and the Chinese class reading function has been enriched to the fun of primary school course learning; the test questions can be participated in during the course replay, so that users can consolidate their knowledge; voice and SMS notifications are added, and the local number is logged in and registered with one click, making it more convenient for users to use.

At this stage, under the dual-pronged effect of advertising and product optimization, Yuanfudao's users have continued to increase, and it has also accelerated the iteration speed, continuously optimized and upgraded the product, and improved its reputation among users. For example, a variety of activities such as "Primary School User Invitation Gifts" have been added to further expand and attract new products.

Overall, Yuanfudao's sense of rhythm and product direction are well grasped.

In the first stage, there was no hurry to promote it, but polished the products and improved the basic framework.

After finding the right direction of development in the second stage and having a relatively stable user experience, the user scale will be expanded through operational means and iterative methods and the renewal rate will be increased.

In the third stage, with the increase in the number of users, the product structure will be continuously improved, learning scenarios will be increased, and the learning needs of different users will be met, making the user loyalty higher. Yuanfudao's valuation from a startup company to 2020 is also closely related to its good product rhythm.

7. Product structure analysis

In the iterative analysis, we analyzed the iterative steps of Yuanfudao's product functions. Next, let's take a look at what users' needs meet and how they are distributed throughout the APP.

This is mainly analyzed through product structure. The following figure is the product structure brain diagram of Yuanfudao 7.10.4:

7.1 From the perspective of user/scenario/requirements

For the convenience of analysis, the following table is obtained by re-examining the product structure of Yuanfudao according to users, scenarios, needs and functions:

Overall analysis:

Yuanfudao’s main users are students, but the payers and managers are parents, so the needs of both parents and students need to be met at the same time.

There are three main scenarios when parents use Yuanfudao:

1. Learn what you want to know through the APP before buying the course
2. Learn the details of the course and payment process when purchasing a course
3. Course learning and subsequent operations after purchasing the course

7.1.1 Scenario 1: What needs will parents have before buying a class and how to meet them during Yuanfudao

Before buying a class, parents first came into contact with the Yuanfudao platform. The first step is to understand Yuanfudao. So after entering the homepage, they can have a preliminary understanding of the platform through "Acquaintance with Yuanfudao in one minute".

After gaining a preliminary understanding of the platform, if parents want to further understand the curriculum system, faculty, course learning effects and other content, these needs can be met through functions such as "course details", "curriculum syllabus", "teacher introduction", and "curriculum evaluation".

In order to allow users to quickly understand the quality of the course, reduce the cost of parents' decision-making, and dispel parents' doubts about the course, Yuanfudao provides free trial classes and 9 yuan special offer activities. These courses are no different in quality from formal courses. Parents use students' feedback on trial classes and special offer classes to decide whether to purchase a complete course.

7.1.2 Scenario 2: What needs will parents have in buying classes and how to meet Yuanfudao

When buying courses, users can effectively solve their own questions through the "Course Selection Consulting" function on the home page or course details page, while also improving the user's conversion rate to a certain extent.

After the user has a certain understanding of the course and completes the audition, when parents consider whether to register for this course or multiple courses when choosing a course, the course selection function can meet this need. In the course selection list, you can also use the calendar function to see if the course you have selected is sufficient, especially when reporting on multiple courses, the platform will also provide course selection suggestions based on the user's choice.

When users decide to purchase courses, Yuanfudao can use Yuancoin to make payments, or consult online courses to obtain WeChat and Alipay registration methods. At the same time, the chamber pot helps users directly use the coupons they own, preventing users from having bad consumption experience due to misoperation, which leads to customer loss.

7.1.3 Scenario 3: What needs will students and parents have after buying class and how to meet Yuanfudao

After buying a class, students need to understand the class time and course schedule before class, interact with the teacher during class, form good feedback with the teacher, and review the content of the class after class and practice after class.

In my course list, Yuanfudao meets students' needs for class and review through the course calendar, online dialog questions, online dialog questions, continuous microphone Q&A, class exercises and gold coin rewards, class answer rankings, offline courses, and marking records.

For parents, they need to grasp their children's learning situation in real time and understand their children's learning effects. By following Yuanfudao’s official account and connecting to the account, you can receive your child’s course report as soon as possible after class, including learning content, study duration, and correctness of class answers. You can also receive homework reports after class and test reports after online exams. The child’s learning process is transparent and the weak links are clear at a glance, making parents more at ease.

From the above analysis, we can see that Yuanfudao's functional design can well meet the needs of users in the three scenarios of buying a class, during and after a class, and can give users a better experience, highlight the focus and reasonable layout in the product structure, which can be regarded as a product with excellent design.

7.2 From the perspective of functional layout

The above mainly analyzes the usage scenarios of parents and student users and the needs of users for the platform in various scenarios.

This part will analyze how Yuanfudao divides the functional layout of Yuanfudao AAP in order to better meet the needs of different users and improve user experience.

7.2.1 Primary structure analysis

The first-level structure of Yuanfudao is divided into three parts: "course", "my course" and "me", which are divided according to the order of users' use. After entering the APP, users first select their favorite courses on the "course" interface; after successfully placing an order, they can view the courses in "my courses" and manage them; for users' personalized needs, they can set them on the "me" page.

The first-level structure of Yuanfudao APP is simple to set up, which can meet users of different ages to quickly get started and improve the user's experience.

7.2.2 Analysis of each page structure

The following figure shows the content displayed on Yuanfudao’s homepage:

• The search portal at the top can search for courses or teachers, and the shopping cart can view the courses users add to purchase;
• You can choose grades below, and the entrances to different subject courses can be classified through table;
• The sliding window on the homepage shows Yuanfudao’s news and the popular courses currently being promoted. Below is the entrance to learn about Yuanfudao and course selection consultation in one minute, and then down is the entrance to low-priced courses and more popular courses.

From the settings of the homepage, it can be seen that such a design mainly considers the needs of new users and users who are interested in purchasing courses. After selecting the grade where the user is, "Acquainting Yuanfudao in one minute" can quickly establish the user's first impression of Yuanfudao and gain the initial trust and favor of the user. Course selection consultation can assist users in choosing courses, providing convenience to customers, and you can also obtain information about the intended customers through this click usage.

Below the course selection consultation is the entrance to low-priced courses. When users are swaying, a dose of cardiotherapy will be given to promote the first payment and improve the conversion rate.

The following figure shows the content displayed on Yuanfudao’s “My Course” page:

Users who have purchased the course can view and manage it on the "My Courses" page. The course calendar can help users accurately grasp the date and time of class and prevent users from missing live classes. For courses that have been completed, you can watch them anytime and anywhere in offline courses after offline. The hidden window in the upper right corner can view hidden courses that have been held and set up in the class, avoiding confusion with unstudied courses and making it easier to manage courses.

To sum up the above analysis, Yuanfudao has clear overall functions, simple and efficient. The product design has good control over details and a reasonable functional layout, which can give users a better experience and meet the needs of users before and after buying courses.

8. Conclusion

Through the above overall analysis of the online education industry and Yuanfudao, it can be seen that Yuanfudao's development is rapid, especially in 2019, the number of registered users and paid users soared and entered a period of rapid expansion. It can be predicted that the competition in the online education industry will become more intense in the next few years. So what advantages and disadvantages do Yuanfudao have in this war, and what opportunities and challenges will it have?

This article will adopt the SWOT model and analyze it from the following four aspects:

8.1 Advantages (Strength)

Yuanfudao's rapid development in recent years has not only caught the pace of industry development, but also closely related to its own advantages. This article summarizes the advantages of Yuanfudao as follows:

1. The online education industry is in a stage of rapid growth and there are still huge dividends: driven by political, economic, social, technical and other factors, K12 online education has developed rapidly, the market size and industry penetration rate have increased year by year, and the development prospects are very good.
2. Yuanfudao has taken the lead in the process of gradually standardizing the online education industry: 6 applications such as Yuanfudao and XiaoyuansouQi have passed the filing and review of the first batch of educational mobile Internet applications. This industry entry threshold allows Yuanfudao to slowly build its own industry barriers.
3. With an excellent teaching and research team, a mature business model has been formed: Yuanfudao has high-quality faculty, efficient and interesting teaching methods, and a complete and systematic course planning. In addition, it has achieved extremely high cost-effectiveness compared to offline institutions, and has successfully gained the trust of parents and students. Provides students and parents with better quality and more personalized course choices. At the same time, it has attracted a large number of excellent teachers with a more flexible salary system and career development. Excellent teachers will attract parents and students to continue their applications and attract new students, thus forming a virtuous cycle, which will enable Yuanfudao’s user scale to expand rapidly.

8.2 Weakness

Yuanfudao also has certain problems in its development process.

There is always a certain gap between the teaching effect of online education and offline. The dual-teacher model adopted by Yuanfudao can be said to be the optimal solution to the current online education model, but pure online teaching and interaction do not have the atmosphere of offline classrooms, and teachers cannot keep in touch with each child's dynamics in real time. The self-drive and self-discipline of students seriously affect the teaching effect. A large number of students do not have strong self-control, especially for younger students, they often need the supervision of parents. This is also an important reason why many parents cannot receive online education.

8.3 Opportunity

The industry and society are constantly changing, and the continuous changes also contain the development opportunities of Yuanfudao:

• Opportunities brought by the epidemic: Due to the epidemic, offline public schools and training institutions cannot be opened, and all teaching activities have been transferred online, which also brings opportunities to online education institutions, including Yuanfudao, and has developed the habit of online education for users and allows online education to enter the user's vision. Yuanfudao held free live classes and other activities during the epidemic, expanding Yuanfudao's influence and popularity.
• Second- and third-tier small cities and rural markets will become new growth points for online education: for first-tier cities where online education has become popular, their competitiveness is huge and their market share has basically been fixed so far. However, small cities and rural areas are almost unexplored markets, and are usually divided by local offline institutions, but the faculty and teaching models are completely incomparable with Yuanfudao. Moreover, because Yuanfudao's expansion costs to small cities and rural areas are much lower than those of offline institutions, and the price of courses is more advantageous, it has a natural advantage in the competition in the sinking market.
• The rapid development of short video + education model: With the emergence of short video software such as Douyin, users' acceptance and love for short videos exceeds the public's imagination. For the education industry, the short video + education model is also developing rapidly. According to statistics from iResearch Consulting, the short video + education market size in 2019 was 6.23 billion yuan, a year-on-year increase of 403%, and it is expected to maintain rapid growth in the future.

8.4 Challenge (Threat)

In the current online education industry, competition is very fierce. As the first echelon, companies such as Xueersi Online School, Yuanfudao, Zuoyebang, Youdao Premium Courses, etc., there is no company that dominates the market, and it is still difficult to decide the outcome.

Due to the result-oriented nature of online education, from the perspective of future development direction, it will focus on competition in "high-quality teachers", "high-quality content" and "high-quality services". How to improve the output of teachers and content to improve the "service" of products, so that customers can "attract and retain" is a point that Yuanfudao needs to pay attention to in its future development.

The above is the author’s analysis and understanding of online K12 fields and online education institutions. Due to limited personal abilities and incomplete data, if there are any incorrect analysis, you are welcome to correct me. Thank you!

Author: Xiao Ding Bang Ding

Source: Xiao Ding Bang Ding