Chinese K12 Education Institutions Bet on Live-streaming E-commerce
In 2022, under the pressure of the Double Reduction policy, many K12 education companies in China, including New Oriental Education & Technology Group and Doushen Education, transformed into the live-streaming field. In addition, with the introduction of a number of policies, the market space for vocational education is expanding in the country.
Former New Oriental teachers such as Michael Dong and Dundun have quickly become popular on ByteDance’s Douyin with their personal flair. Since its premiere on December 28, 2021, the number of New Oriental’s live-streaming accounts on Douyin has increased from one to six, attracting 36 million fans, and launching 52 self-operated products. On December 27, a new account named “Look at the World” started selling products from Hainan, with a single day’s sales exceeding 20 million yuan ($2,867,240).
The popularity of live-streaming is reflected in New Oriental’s financial report. From June 1 to August 31, 2022, New Oriental achieved an operating profit of $78 million, up 140.5% year-on-year, while net profit was $66 million, up 9% year-on-year.
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Doushen Education, TAL, and Scholar Education have also launched their own live-streaming businesses. TAL’s live-streaming account on Douyin has 9 live-streamers and 76,000 fans, far fewer than that of New Oriental. On December 12, Scholar Education’s first live-streamer appeared on Douyin and now has 20,000 fans.
In response to the letter of concern from the Shenzhen Stock Exchange in June this year, Doushen Education said that since October 2021, Dou Xin, the chairman of the company, has led several members to publish short videos on platforms such as Douyin to share the knowledge of literature and history. As of June 20, the company has nearly 100 live-streamers, and the live-streaming e-commerce sales business contributed 17.13% of the company’s total revenue in the first quarter of 2022. However, its Douyin account has only 1,406 fans and stopped uploading new videos on July 7.
Aside from New Oriental, the road of transformation of other educational institutions does not seem to be smooth sailing. Cailian Press reported that New Oriental focuses on selling products while sharing useful knowledge with the audience, and its live-streamers are mainly former teachers with extensive teaching experience. The business model is difficult to copy.
Besides live-streaming, vocational education is one of the transformation directions of K12 education companies. This year, vocational education received policy support and ushered in a critical period of development. In May this year, the new Vocational Education Law was officially implemented, which clearly stated that “vocational education is an education type with the same important status as general education”, including two modes – vocational school education and vocational training.
According to the Ministry of Education, there are 11,304 vocational schools in China, including 9,786 secondary vocational schools and 1,518 higher vocational schools, with a total of 30 million students. According to the calculation of Guolian Securities, the market size of higher and secondary vocational education will exceed 130 billion yuan and 60 billion yuan by 2025, with a CAGR in five years of 5%-7%. It is estimated that the market size will exceed 200 billion yuan in 2031.