Brief
1 Market background
1-1【Macro data】1-2【Market size】1-3【Kindergarten】
2 Competitors
2-1【叽里呱啦Jiliguala】2-2【宝宝玩英语BBWYY】2-3【英语小神通YYXST】2-4【Others】2-5【Brief summary】
3 My opinion (brief)
3-1【User demand and scenario】3-2【Competition】3-3【Strategic opinions】
Summary
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Brief
Last night, I compiled the information of the past week, and combined with the actual investigation, I wrote the following.
Due to the tight time, problems can not be described in depth one by one, but we can communicate one by one after that.
The full text is 3200 words, and the reading time is about 8 minutes.
1 Market background
1-1【Macro data】
The number of children aged 0-6 years in China will increase from about 100 million in 2015 to 125 million in 2020.
The rising population of young children has benefited from the opening up of China's overall economic environment and the policy of second child in recent years.
2015~2025, the average annual birth rate is about 20 million +. Over the next decade, a total of 24 million new births are expected, with an average annual increase of 2.4 million.
1-2【Market size】
1-2-1 Number of people
1) in 2018, the number of children aged 2~6 years in China was about 73 million, that is, the total available market,TAM is 70+ million.
2) At present, the Internet penetration rate in China is about 50%. According to the actual situation, the target family has not less than 40% Internet penetration rate, and the Served available market, SAM service market is 30 million.
3) the market share of Unicorns in China's Internet sector is about 35% to 60%. According to this ratio, share of Market, SOM can be obtained from 10 million to 20 million.
4) To sum up, this is a market with TAM of 70 million and SAM of 30 million for Chinese children aged 2 to 6, replacing 20% of new users every year.
1-2-2 Amount of money
In 2017, China's total annual household consumption of early childhood education exceeded 450 billion yuan, and by 2020 it is estimated that it will exceed 600 billion yuan.
After the rapid development of mobile Internet, China's Internet education market has reached 200 billion yuan in 2017. It is estimated that the market will reach 500 billion yuan by 2020. Among them, online preschool education accounts for about 17%, 85 billion.
Expenditure on early childhood education has become an important expenditure for family consumption. According to a survey conducted by Erie, 76% of people aged 0-6 buy audio-visual products for early childhood education books, which cost 300-500 yuan a month. The expenditure on early childhood education in the first-tier cities can reach 500-1000 yuan per month, and the expenditure on early childhood education in the third and fourth-tier cities can also be maintained at 100-300 yuan per month.
1-3【Kindergarten】
In 2010, the Central Committee and the Council proposed that by 2020, the gross admission rate would reach 95%.
Basically, the first two years of education should be popularized, and three years' education should be popularized in the selected areas.
The government encourages the vigorous development of public kindergartens and actively supports private kindergartens.
In other words, there is still a 20% increase in kindergarten attendance. Secondly, the government encourages the establishment of more private kindergartens.
In addition, in 2016, there were still 3 million vacancies for kindergarten teachers in China, let alone the EN teachers.
2 Competitors
2-1【叽里呱啦 Jiliguala】
叽里呱啦 Jiliguala, a slang, which is the sounds of a child when he learns a language in his childhood.
Keywords: 16 million users, have been profitable
叽里呱啦Jiliguala, 0-8 years children's old online English education brand.
Founded in 2014, they are the first online education companies invested by Y-Combinator in China. In 2016, it received tens of millions of A round financing. In 2017, business grew by 2300%. Currently, there are 16 million registered users, but the growth has entered a flat period, with an estimated increase of 1.5 million users this year. In addition, it announced that it had achieved full profit in August.
To its App content, included words, nursery rhymes, everyday spoken English, animation, picture books. It focus on picture book course.
2-2【宝宝玩英语 BBWYY】
宝宝玩英语 BBWYY means Babies play/learn English.
Keywords: 150 million B round of financing, Tencent and 经纬资本Jingwei Capital leading investment, cooperate with BBC Studios
宝宝玩英语 BBWYY was founded in 2016, the main form of parent-child interaction of 0-6 years old English enlightenment courses, users mainly to the parents of children.
At present, there are more than 1000 original animation lessons in English for babies, with more than 200 original children's songs. The children are divided into three groups according to their age: 0-2 years old, 2-4 years old and 4-6 years old. The total number of services is more than 1 million 500 thousand families, with 200 thousand new users added in a single month.
In November 2016, Seed rounds.
In May 2017, the A round.
In March 2018, the B round. The amount is RMB 150 million, which is invested by Tencent and 经纬资本Jingwei capital.
宝宝玩英语 BBWYY announced a partnership with BBC Studios, a British Broadcasting Corporation (BBC) subsidiary, to bring five video series from preschool children's program brand CBeebies to babies playing English, including "Global Adventures", "Hi! Dodge", "little dinosaur paradise", "Sarah and the duckling duck" and "123 wonderful mice".
With the help of this collaboration, 宝宝玩英语 BBWYY's users can watch hundreds of popular animation programs launched by the CBeebies(UK) since 2012 through the official platform.
2-3【英语小神童 YYXST】
英语小神童 YYXST means Child prodigy/talent in English
Key words: teaching mother to guide children, get seed round investment in March 2018
By introducing the "Spoken Life Scene" course in the litchi(A app, a well-known audio platform) micro-course, it has gained nearly 500 seed users. According to the age groups of 0 to 2, 2 to 4, and 4 to 6, 英语小神童YYXST has developed online English enlightenment courses, which include children's songs, oral sentences and picture books in the form of 15 minutes audio and video classes. At present, the company's product form includes free or low-priced five-day enlightenment courses, 10-day courses for 199 yuan, three-month enlightenment courses for 299 yuan, and one-year courses for 2000 yuan.
After one and a half months of formal operation, it got the ZhenFund investment. Xu Xiaoping, founder of ZhenFund, said he valued the company's executive power and data performance. Next, 英语小神童YYXST will focus on teaching research and development and company operations, plan to expand the team, and plan to launch live courses.
2-4【Others】
Key words: major companies continue to follow up
English Enlightenment for 0~6 year olds.
VIPKIDS launched the 自由星球(means freeplanet) and joined the BaoBaoshu(means Babytree). BaoBaoshu is a large domestic service platform for mother and infant.
DaDa English launched DaDaBaby and joined the 家长帮("Parent Gangs"). 家长帮 is a sub-company of 好未来HAOWEILAI(China's largest education company), also an educational information and resource sharing platform for parents.
In addition, JIRITOUTIAO(China's top three traffic platform is an important opponent of Tencent) launched Gogokid, and fenbiwang has introduced chalk Kids.
2-5【Brief summary】
The competition is fierce: There are 10+ teams with similar business which also got their certain advantages. If we calculated the teams which have overlapping, we may have 30+.
The type is very similar.: App module is similar, including words, nursery rhymes, animations, picture books, etc. They earn their income through courses, and the unit price is also similar.
Seeking differences in strategy: 宝宝玩英语(BBWYY) signed the copyright of well-known animation; 叽里呱啦Jiliguala focused on the development of picture books; 英语小神通 positioned the user to achieve companionship learning; both free planet and DaDaBaby have strategic partners, thereby obtaining large-scale traffic support.
Here, I want to leave 3 questions and listen to your thoughts later.
What do you think is the advantage of LINGUMI team?
What do you think the ultimate pattern of the industry will be?
What do you think is the new breakthroughs for strategy?
3 My opinion (brief)
Below are my views towards some issues. Due to time constraints, I only selected 3 important modules as I thought at this moment.
3-1【User demand and scenario】
Christensen, a professor at Harvard Business School, has a classic point of view. He says that users aren't buying a product or service. What they're actually doing is "hiring" your product or service to accomplish something they're facing.
3-1-1 User demand
ToC, Parents. The core requirement for parents to send their children to kindergarten is to release their hands and give them time to participate in work and increase family income.
According to the survey of preschool children entering kindergartens carried out jointly by the All-China Women's Federation and the Ministry of Education, the most concerned problems of parents to kindergartens are teachers' love and responsibility for children (61.4%), providing systematic and standardized education for children (43.6%), paying attention to nutrition, hygiene and rich colors (34.9%) in meals, and guaranteeing them. Children's health (25.7%), regular communication with parents (25.2%), and excellent professional teachers (22.4%).
See, the above user demand will not shown in the current investigation, because that is a practical premise.
ToB, Kindergartens. The core purpose of the English lessons offered by kindergartens is to attract students and improve the level of English teaching in kindergartens.
At present, most of the kindergarten foreign teachers in China are granted tourist visas because they can not afford the high cost of working visas. Secondly, kindergartens are highly capital-intensive and highly decentralized industries, so the teaching content is mixed and the research and development efficiency is not high. This is different from the restaurant. We hope to see more different restaurants because we want to have a change every day. But when it comes to kindergartens, we don't mind the similarities in teaching content because we all want our children to receive a more standard and quality education. So here is a big demand. In my circle of friends, a startup team got 8 million yuan seed round funding this year, concentrated on the kindergarten teaching program. The team is currently including 12 people. They introduced the concept of early childhood education in Stanford University, and then made localization.
3-1-2 User scenario
Strictly speaking, English learning is not a demand, but English learning with scenes is a demand.
Here I want to share an case.
凯叔讲故事，"Uncle Kai Tells Stories". Let me make it Uncle KAI Story for short.
Uncle KAI Story, although it has only been founded for 5 years, it has become a well-known IP for children and parents in China. Prior to the company's B round is 156 million yuan.
The founder, Uncle Kai, has a perfect voice. Many of the contents are his own participation in production and recording.
What you think whether child in China wants to listen to stories?
If you play in the daytime, no one will listen to it. But if it turns into bedtime stories, children will need it.
Uncle KAI Story pinpointed the use of stories that children listen to every night before going to bed, using his perfect voice line to create about 30 minutes of bedtime stories, freeing up mom and dad's time. Kay's users grew fast in the early days, because he identified the user scenarios.
What kind of story do you think he should tell?
Later, he received a complaint from the parents and told not to tell stories anymore before bedtime. This is a sweet annoyance. Because his stories are so good, the children became more and more excited and did not fall asleep for an hour.
Rather than letting children know more about a story, what parents real need is to let their children fall asleep on time.
So in later development, Uncle Kai changed bedtime stories to children's vocal enlightenment. They read classical Chinese poetry and match the original music suitable for sleeping.
As a result, children can fall asleep after 15 minutes of listening, and for difficult poems, children can learn them by heart because they often listen to them before going to bed.
The products are very professional and highly praised. I have heard their content myself. It is really very good. If we have time, I will tell you about other details of Uncle KAI next time.
So back to the subject, people actually don't want to buy a 1/4 inch drill bit. They just want a 1/4 inch hole on the wall.
In any case, it is extremely important to clearly identify the core user requirements and define the usage scenario requirements.
3-2【Competition】
There is one quote of Sun Tzu's art of war, 善站者，不可胜在己，可胜在敌。
Which means it's up to yourself that whether you can't be defeated, it's up to your competitors themselves whether you can win and beat them, when they give you opportunities.
Always turn yourself into an invincible state and wait for the opportunity to defeat the enemy.
So even if the competition is fierce now, we can continue to survive as long as we make a key decision. Then wait for others to make mistakes and defeat them.
In the past decade, there have been two classic cases that have impressed me in the vertical industry competition of Chinese Internet companies.
One is in online group purchase industry, the company called MEITUAN.
When the group buying became popular, more than one hundred companies were doing it. At that time, it was called "100 regiment war". MEITUAN is the final winner. At that time it was not big at that time, but at last it annexed the early industry leaders.
In users, the decision they make is customers first, merchants the second.
In promotion, they make the decision not to spend money blindly as competitor for scale and user growth, not to find stars to advertise, and only spend money in the most effective channels they find for customers.
In operation, their decision is to focus on developing three or four tier cities in China rather than a second tier city in the first-half.
In capital, they completed the financing ahead of time, through the capital cold winter.
At each stage, they make the right choice on the core thing, and then wait for the opponent to make a mistake.
There is also a case where Internet travel trips are going, Qnaer(去哪儿, means where to go).
Ctrip is currently a defiantly the leader and unicorn in the online travel industry in China. At that time, 去哪儿Qnaer, founded after 6 years of Ctrip, has occupied a certain market share. It successfully kill out, and then in a very short time to achieve the second industry, finally merged with Ctrip before IPO.
This is a classical business case in China for the latecomers to catch up with the first in 21 century.
3-3【Strategic opinions】
For current indicators, I think business mode > user experience > cash flow> user number > content.
For business mode, in addition to the original ToC channel (App), you can consider ToB channel (kindergarten service/contents and dual teacher class).
For funds, the next round of financing would be better completed within 6~12 months. For team building, content building, B-end channel development.
For China's equity structure, you can refer to Uber's case. Headquarters account for a certain proportion, leaving the equity space in the local market.
Finally, I would like to know how much you plan to invest in the Chinese team in the next 12 months. As for time, money, and your concentration.
Summary
To sum up,
1. China's market and increments are great, and it is undoubtedly the first choice to the team.
2. Do not completely copy overseas product logic and promotion experience, which is likely to be impracticable.
3. Competition is very intense. It is necessary to carry out the financing and strategic cooperation which supposed be completed 6 months later.
4. When everyone is similar, find out LINGUMI's unique point.
5. Consider about the kindergarten, the ToB market.
6. Users' core demand and scenario must be clearly defined.
7. It is need to make clear about CEO's altitude for China's project and team.
Also, don't forget the three questions left above.
I look forward to communicating with you. Thank you.
FM
31st, Oct