Report of Chinese Academy of Sciences: Four Models of Online Education: The Rise of Small Class Mode of Competitive Spark Thinking

On March 2nd, the Key Laboratory of Big Data Mining and Knowledge Management of China Academy of Sciences officially released the Report on Small Class Size Development in Online Education Industry in 2020 (hereinafter referred to as the Report). The report pointed out that after the double explosion of financing scale and number of users in 2020, the multi-track online education business model was successfully verified and entered four modes: large class, small class, 1V 1 and AI class. Among them, ape coach, spark thinking and VIPKID are the typical head enterprises of the above different tracks.

The report pointed out that in the face of increasingly mature user cognition and increasingly subdivided user needs, online education is bidding farewell to the extensive growth period with marketing as the core and entering a new competitive pattern with product research and development, teaching and service quality as the core. An obvious trend is that the "back-end" small class model represented by Spark thinking will replace the current second AI classroom and become the mainstream of online education market after 2025.

Small class model has sprung up suddenly: in 2022, the super 1V 1 model will replace the AI class model in 2025.

The report of the Chinese Academy of Sciences pointed out that due to the epidemic, household consumption gradually returned to rationality, and the main competitive market of online education gradually sank to second-tier and below cities. Cost performance will become an important factor affecting users' choice preferences. Through the famous teacher effect and the best cost performance, the large class will undoubtedly win the favor of more families in China. Small class provides users with a better learning experience through high-quality back-end research and development and heavy front-end operation, which has obvious advantages in teaching effect and cost performance.

According to the report, the small class model that has gradually entered the public eye in the past two years is springing up like mushrooms after rain. More than two-thirds of the surveyed users are willing to choose the small class mode of 202 1, and the proportion of users who prefer the mode of 1V 1 has also increased slightly. Small-class teaching mode is rapidly gaining recognition from users, and it is currently in a rapid growth stage.

The report predicts that the small-class model will maintain a high growth rate in the next four years, while the growth rate of other online education models is slowing down. In 2022, it is estimated that the market size of small classes will exceed the 1V 1 model, and in 2025, it is estimated that the market size of small classes will exceed the AI class model and become the mainstream education model after large classes. It can be referenced that in recent ten years, domestic mainstream offline educational institutions have basically experienced the collective transformation process from large class mode to small class mode.

The report points out that users' consumption choices for online education are not blindly rising, but reflect a regression trend, that is, users with high consumption and low consumption gradually move closer to the middle, which also means that online education has entered a pragmatic, result-oriented and cost-effective era.

High performance-to-price ratio and unique peer learning effect are also the key factors for small class mode to win in the whole online education mode competition. Small class mode is in the middle level in price, but it is among the best in user experience and learning effect, and it is a very cost-effective option. After trial and error in the market, small classes have gained a good reputation among users and are expected to attract more users in the future.

The brand satisfaction list of small classes was released for the first time: Spark thinking, whale foreign teacher training and art treasures ranked in the top three.

The results show that parents are the most satisfied with the spark thinking of mathematical thinking track, and the average score of users is 84.55 points, especially in terms of comprehensive service and learning effect, which has obvious advantages. In the field of small English classes, the whale foreign teacher Peiyou ranked second with 83.25 points, and the art treasure ranked third.

The report pointed out that the overall satisfaction of small classes is at a high level, and the operation mode and effect of small classes have been verified by the market and affirmed by users. However, small classes are not an area that ordinary entrepreneurs can easily set foot in. This model puts forward extremely high threshold requirements for entrepreneurs' management ability, operational ability, financial pressure, student satisfaction and renewal rate. The complexity of its business is far from other online education models.

Only at the operational level, the unique mechanism of small class and stratification, the large-scale teacher training mechanism, and the sustainable reduction of operating costs are the core issues facing the management of various institutions. There are only a handful of excellent cases in this area, and negative cases have appeared in batches. For example, in 2020, the brand magic ear of English small class was forced to sell herself for survival under the pressure of management.

Judging from the market scale of small classes, mathematical thinking track has become the largest market segment in the field of small classes. On this track, Spark Thinking, which has been established for three years, presents an advantage trend, with a market share of over 70%, which is twice that of other brands on the same track combined, and its head advantage is obvious.

The report also pointed out that from the user's point of view, in the face of many online education brands, parents' trial and error is relatively difficult and costly. It is undoubtedly a more rational choice to choose a well-known educational brand with good reputation and high market share. Therefore, whether in the field of large class, small class or AI class, the head enterprises such as Ape Tutoring and Spark Thinking will keep an obvious leading position, and their existence and evolution will also affect the market structure of online education in China in the future.