Operating Modes of China's Programming Education Companies
In the global perspective, almost every developed country is stressing on children's programming education, which is a reasonable explanation of why China is accelerating the layout of programming education
In the first half of 2019 programming education companies led the number of financings by 12 in the quality education sector. Among which XiaoMa.Wang (小码王) completed a billion yuan B+ round of financing, Codemao (编程猫) completed a new round of financing as well, a few months ago Hetao (核桃编程) announced that it had completed CNY 120 million A+ round of financing. As the number of new-comers in the sector is increasing the competition will get fierce in the near future. But the sector is still in its early stages, and the operating model to survive in this early stage is very important.
At present the operating models of thee children’s programming companies in the market include, online (recording and live broadcast), online+offline, offline etc. AllDream (傲梦) and Tongcheng Tongmei (童程童美) use the online+offline model, Sequoia backed Xigua Chuangke (西瓜创客) and Hetao (核桃编程) use the online model. We can see that different institutions have chosen different models to either lead or survive in the industry.
The new generation of parents are starting to understand the importance of programing. They do not want their children lagging behind in the race of technology.
Companies like All dream, Editing and learning aka CodePKU (编玩边学) and Codemao use the online operation model.
Founded in March 2014, AllDream is one of the first players from mainland China to break into child programming circuit. At the beginning of the establishment, AllDream adopted the offline training model. However, due to insufficient education level and the high operating cost of the offline store, the company switched to a one-on-one programming in 2016 with the gradual maturity of the online model.
AllDream has raised five financings, of which B round of RMB 120 million financing is led by TAL and IDG Capital. The age of users is 6-18 years old. According to public information, the price of AllDream is CNY 130-160 per session. The frequency of class is one time per week, and the conversion course price is CNY 173-213 per hour, and the class time is 45 minutes.
Editing and learning aka CodePKU (编玩边学) is mainly based on online (recording + live broadcast). According to Rhino data the company has also been financed five times. The enrollment age is 7-16 years old, and the frequency for the class is set to 2 times/week. The price is CNY 90/ day, of which the conversion price is CNY 120 / hour.
Tongcheng Tongmei (童程童美) operation mode is online + offline. It is necessary to know that in the children's programming track, the operating modes of each company are different. Among them, Tongcheng Tongmei's offline business revenue accounted for 95%, and online business accounted for only 5%. Due to the relative subdivision of the programming track, offline customer acquisition costs are much lower than online.
Most of the children's programming companies maintain the frequency of 1-2 times/week. Each class is of around 40 minutes to an hour. For longer courses, according to the course teacher, a short break is arranged in the middle of the course.
In terms of price, it is closely related to the teaching method, ranging from CNY 36 per hour to CNY 200 per hour. Compared with the one-on-one online mode, Xigua Chuangke (西瓜创客) and Hetao (核桃编程) adopts the model of recording and broadcasting + real-time online Q&A, which focuses on small profits but quick turnover.
Art education, children's programming, and other fields have received much attention in terms of financing in the first half of 2019. As China continues to incorporate sports, art and other disciplines and comprehensive quality evaluation into performance evaluation standards, and the gradual opening of the after-school service market, 2019 Quality education will continue to attract investments in the second half of the year.
Although the total amount of quality education has decreased, it is still a popular track as far as capital attention is concerned. According to the “Implementation Opinions on Regulating Online Training in Schools” “关于规范校外线上培训的实施意见” released by the Ministry of Education and six other departments, quality education is the government’s main support for encouraging development and is still in the policy dividend period.
At present, there are more than 200 children's programming entrepreneurial projects and companies on the market.
In the field of quality education, the number of outdoor education finances has grown and is set to become a new hot sector of the industry. At the same time, children’s programming education is still on top of the list for capitals, in which as mentioned above Codemao (编程猫), XiaoMa.Wang (小码王) and Hetao (核桃编程) received a large amount of financing of over CNY 100 million.