COVID-19 has been a blessing in disguise for online education companies as VIPKID's users increased 3.6 times in 1H 2020, and the cumulative number of one-to-one courses was about 150 million.
Zhang Yuejia, co-founder and president of VIPKID, announced that the company's unit economic model from January to June 2020 was positive for the first time. At the same time, since the second half of 2019, the cost of customer acquisition decreased by 45% year-on-year, and 90% of customers achieved their first profit.
He also added that UE is positive, which can be understood as 'customer unit price-management cost (teacher cost + class teacher service cost + technical cost, etc.) - channel cost.'
With a currently having 800,000 paying students the firm prior to this had already planned to make a profit in 2020.
In 2018, it began to emphasize benefits, but due to market competition, it was postponed to the second half of 2019, and for the first time in 2020, it reached the strategic goal of UE being positive.
Zhang also revealed that "VIPKID pursues 'scale expansion with teaching quality' and has already won 80% of the online youth English market share, and has signed contracts with more than 90,000 North American foreign teachers."
VIPKID has been constantly exploring and adjusting its products.
In the second half of last year, it merged two of its sub-brands and formed Dami Online School (Chinese: 大米网校).
According to reports, the spring semester of Dami Online School achieved a 500% increase in students. The renewal rate of the regular price for spring classes is currently about 75%. Zhang Yuejia once revealed to Chinese media Duozhi, that although the epidemic has accelerated the pace of development of Dami, it will still follow the company's earliest plan.
Officials pointed out that the renewal rate of rice online school is 75%, and the conversion rate is 18%. VIPKID's quarterly growth rate of Chinese and foreign teaching training courses was 180%. In July, parents purchased more than 10,000 orders.
VIPKID realized the large-scale application of AI in online teaching for the first time. At present, the number of AI interactive courses completed exceeds 1 million, covering 100,000 students, with an answer rate of 98%.