The growing popularity of the online education market underscores the increasingly narrow living space of startups.

Absrtact: The admission of giants, the influx of capital, the online education market is booming behind, but highlights the increasingly narrow living space for start-ups. Whether it's gaming, video or other internet verticals, getting enough traffic and users is always a support provider

The admission of Giants, the influx of capital, and the growing popularity of the online education market have highlighted the increasingly narrow living space of start-ups.

Whether it's games, videos or other internet verticals, getting enough traffic and users is always the core factor underpinning the business model, and the Internet leaves education with a very limited flow space and target user base. For the online education industry, traffic and users become the biggest problem.

On the Internet, where the demand for entertainment and living services is the core, electricity quotient, games, video, real estate, automobile and other industries flow has the value of mutual conversion, but education is special, more netizens do not develop the habit of online learning, these traffic is difficult to transfer to the education field, and from the perspective of students, More in the hands of the traditional offline education and training institutions.

Search remains one of the most important traffic portals for educational products. Public information shows that education and medicine, machinery and equipment, franchising and electronic products accounted for about 50% of Baidu's total advertising revenue.

However, a Baidu insider told Tencent Technology, the current education search flow and advertising revenue is mainly linked to the traditional offline education institutions, pure-oriented online education site traffic is still very small.

Baidu Education last September on the line of the center page of educational institutions, and the search results in the education institutions to give certification and rating, from the current search results of various educational keywords, offline education institutions occupy the majority.

According to the education of the relevant person in charge, such as "primary and secondary education", "English training" and other keywords, a single click price of up to 100 yuan, offline institutions to obtain effective user unit cost more than 1000 yuan/person. However, at present, the traditional education and training generally is the high profit industry, the examination and the English course price to reach hundreds of yuan per hour is not difficult, for small and medium-sized traditional education institutions, the education field of the flow price within the scope of acceptance.

But for free product-oriented online education startups, the flow from Baidu will also pay high costs, it increased the survival pressure. An online education start-up company founder told Tencent Technology, such as "study English Training" and other keyword search of the CPC click Price can easily reach about 50 yuan, "We are almost all working for Baidu," the founder described.

In the future, once the Giants such as Baidu, Alibaba and Tencent expand their education market and tighten the distribution of their own platforms, the traffic shackles of these startups will intensify.

Gruel: Industry Centralization accelerates

According to statistics, 2013 has billions of funds into the online education industry, the whole year new nearly thousands of online education institutions. Experts predict that 2014 is the year of China's online education outbreak.

Eric data shows that the number of online education users in 2013, about 67.2 million people, compared to video, games and other Internet areas, the base is very small, and in the universal free mode, in addition to access to a small amount of advertising revenue, the value of individual users can not be guaranteed.

Internet education itself is a service nature of the "slow heat" industry, is unlikely to accumulate a large amount of users in a short time. "To do the platform, first to users, the vast number of users is not once day can attract, need a long time huge investment, ladder nets will at all costs through high-quality free resources to attract a lot of users." "Ladder net founder Gong admits.

The establishment of a long time in the established online Education Web site, the network, claiming to have 60 million registered users, 3 million paid students, however, from the flow, and other vertical areas of the gap. Compare Alexa Traffic rankings, SouFun's global ranking is around 1100, auto is about 1300, the ranking of the network is about 9,700.

In fact, in addition to search and other brand advertising to bring users and traffic, offline organization is the online education platform to obtain users of another major traffic channel. In other words, compared to pure online companies, large and medium-sized traditional offline institutions master the quality of education user resources, is the future competition to obtain traffic channels of important chips.

A once entered YY education institutions in charge of education has said to Tencent, before the YY education platform, YY brought to the value of educational institutions is far less than the value of the educational institutions to YY, because these educational institutions need independent enrollment, cultivate users to use YY client, and bear a variety of operating costs.

All of these reasons can lead to a concentration of users and traffic to a handful of large platforms, and more online educational institutions business models will be hard to sustain.

"This is a mass pit, high risk, high investment, high return, low success rate, many people will die on this road." "Gong said, online education is not like offline, offline even small training institutions can survive, as long as the surrounding area to deal with the market, but the Internet attention to scale effect, the ultimate success probability must be very low, there will be many people died on the road.

New Oriental CEO Yu Yu has revealed that China's pure Internet education companies There are about 2000, of which 99% will fail, the remaining 1% will become a particularly dynamic education companies.

Hu Network and other established enterprises have many years of user precipitation, 100 education can use YY resource accumulation, new oriental institutions have enough chips to choose and Tencent and other large internet companies, Baidu Education in the future does not exclude the use of tourism and video market model to create another "Where to go", Alibaba through Taobao flow to control the education products trading market, and more companies do not have a reliable source of traffic.

To sum up, the online education industry in the next few years may occur as follows a series of major changes:

Baidu as a natural knowledge retrieval platform, or will be through the control of search channels, investment and support similar to the network of enterprises, become online education giants, Tencent with a strong comprehensive resources and new Oriental and other traditional education institutions to form a joint venture to occupy a place and internet companies such as Alibaba and NetEase need to embark on a takeover battle to share the growth gains of online education markets through investment.

There are still financial strength of online education enterprises (such as ladder nets), will accelerate the acquisition of a variety of users have accumulated education forums and sites, and even small and medium-sized online education institutions, and a group of funds not enough internet education companies will be washed out, not find financing of entrepreneurial companies began mass death.

Three or four-line city difficult to become a pioneering company breakthrough

Faced with giant competition and flow pressure, some entrepreneurs began to adjust their direction to enter the three or four-line city. In these areas, English training, vocational education, judicial examinations, civil service examinations and other adult education fields have greater market potential.

Xu, vice president of the net, said that the future network education target user group will be concentrated in small and medium-sized cities, even some remote areas of township counties.

Although the traditional education market in the three or four-line city is not as immature as everyone imagined, most of them are in a disorderly competition, the new Oriental and other traditional large institutions are not in power, leaving the local training institutions with space for development.

This has also resulted in uneven distribution of quality educational resources. Taking English as an example, in a big city, you can find English training institutions such as New Oriental, Global IELTS, EF and so on, but in small cities, even if users are willing to pay for education services, it is difficult to enjoy the best courses and the resources of teachers.

In this case, once the big online education platform with High-quality resources to enter the three or four-line market, the impact on local educational institutions, but, because the market costs and education costs are too high, the opportunity to leave the start-up companies are not much.

However, in Xu's view, online education startups fail to come for the time being, "the education industry is a slow hot field, it is unlikely to be like the electric dealer or group purchase, after a year or two multifaceted only one or two oligarchs left." "Xu said.