“In the era of mobile Internet, traffic is a bonus, and users are value."

In the first half of 2020, short-video becomes a new battlefield in the education industry. Companies tap into this sector by launching educational videos and live e-commerce. As more MCN institutions, which are serving the education industry, have been spawned, the ecosystem of “short video + education" has been burgeoning amid the COVID-19.

Short-video is reshaping education

The development of Internet technology has revolutionized the whole of content creation and consumption. With the explosion of the internet and the popularization of smartphones, user traffic is the key to monetization for internet companies, but it did not grow significantly last year. Among all the sectors, we can see that the growth is primarily concentrated in short-video. Initially focusing on entertainment, short-video now has extended to many other fields, especially education. In 2020, the education industry ushers in a new era that short-videos and live broadcasts have reshaped it.

In recent years, online education seems to be on the rise in China. But actually, it is only prevalent in the first- and second-tier cities due to the uneven distribution of educational resources. The first- and second-tier cities occupy more than 70% of the high-quality educational resources, while the third-, fourth-, and even fifth-tier cities with dense populations have very limited access.

Now, boosted by the COVID-19, online education is closing the gap, and short-video could be a perfect penetration point to start with because companies can probably acquire more customers through short-video marketing. As a time killer, short-video has seen over 800 million MAU as of September 2019, according to Questmobile, it means that more than 70% of the netizens in China are using relevant platforms.  And in June 2019, the average duration of monthly short-video app usage has reached 22.3 hours. The data also shows a growth rate of 537% and 60% in June 2018 and June 2019. In comparison, the growth time of long-video watching time in the same period was 31% and 15%, respectively. 

Meanwhile, WeChat, the most ubiquitous social media app in China, has officially released the “Announcement against products offering rewards for users to share advertising-related links". It is undoubtedly a heavy blow for the companies relying too much on the marketing strategies with WeChat Moments. So we can never deny that online education in China still has to overcome the high cost of customer acquisition. Last summer vacation, it is reported that even one of the leading online education companies has spent more than 10 million yuan(around 1.5 million USD) on advertising to acquire more customers, not to mention how much pressure that small- and medium-sized companies are facing.

On the one hand, various data related to short-video is growing rapidly. On the other hand, education companies’ traditional way to acquire customers seems to be unsustainable. Therefore, short-video with a large user base and market space is indeed a great traffic pool for EdTechs to explore.

Short-video not only brings the user traffic but also lowers the cultural barriers to reach more people. For instance, farmers can share agriculture knowledge, blue collars can find a job and learn skills, and the elderly can kill time but learn things they are interested in. Additionally, short videos can satisfy the learning needs of students with poor learning performance, who have been ignored by the leading K-12 education companies. 

The short-video sector is more like a shopping mall close to home, where consumers could buy anything. It offers a more pleasant teaching and learning scenario, but traditional education institution is more like a remote specialty store, appropriate for selling products that are expensive, professional, and meeting rigid demands covering subject education, Gaokao-oriented training, and study abroad. In the past, we always seemed to believe that education should be serious, but short-video has reshaped the educational industry chain.

As we can see, amid the outbreak of COVID-19, an increasing number of K-12 educational institutions have turned to short-video business. TAL, GSX, Zuoyebang, Yuanfudao, and other leading firms start building their own short-video account matrix. Since the integration of “short video + education" has just begun, Edbeta Fund believes that this will be a blue-ocean market with trillion-dollar opportunities. For educational institutions,  it is important to abandon obvious promotion content. Only improving the ability to produce user-oriented and high-quality content can they have the possibility of success.

Starting from consumer acquisition, short-video needs to move beyond

At the current stage, many educational institutions still only regard short-video as a way to convert more paying customers. Wang Kaifeng, a partner of EdBeta Fund, believes that short-video may be transformed from a conversion channel into a learning platform.

Qiu Yanfeng from BE Capital also suggests that the form of short-video has expanded the space for content consumption and widen the boundaries of the education industry. In the future, more groups of people will become target-users of paid content.

Meanwhile, opportunities lie in each process of the supply chain. Companies can become bases for teacher training by signing contracts with KOLs and KOCs or the firms themselves can become good intellectual property. They can function as tools that help teachers better complete the live-streaming courses and assist with practicing and correcting learning assessments. They can also work as an ERP tool to manage courses, students, and teachers.

No matter how the short-video is positioned, it will finally become a new traffic pool. Will the future of “education+short video” start from customer acquisition and stop at customer acquisition as well? A broad space is left for the future. But when discussing the prospect, we should not ignore the existing problems.

Indeed, platforms such as Douyin(TikTok's Chinese version) and Kuaishou enable qualified and charismatic teachers to present themselves, and meanwhile help institutions attract more students, the pain point in companies' operation. However, it is hard to ensure the depth of the content taught because the product positioning of “education+short video" has the nature of entertainment. 

Deep-dive into different modes of two leading Chinese short-video platforms

In fact, since the second half of 2019, Douyin and Kuaishou have embraced the education sector, but which is more suitable for educational institutions' marketing strategy?

In January 2020, according to the "2019 Douyin Data Report", the platform has hosted 14.89 million knowledge sharing short-videos, and each has reached an average of nearly 100,000 users. As for Kuaishou, the "Kuaishou Educational Ecology Report 2019" shows that there were more than 200 million educational short-videos and over 990,000 educational content creators on Kuaishou. The average daily views have hit more than 2.2 billion times. 

In terms of the algorithm, Douyin has a content-oriented distribution mechanism with 400 million monthly active users, leading to strong media attributes but relatively low social characteristics, which means a weaker user stickiness for educational institutions. On the contrary, Kuaishou encourages video accounts to live broadcast. The traffic distribution is based on users' social attention and interests, which helps educational institutions build their own private domain traffic pool and monetize through precision operation and live e-commerce.

Considering the different business modes of Douyin and Kuaishou, educational institutions should adjust their way to monetize and convert via these two platforms. Statistics show that nearly 80% of Douyin's revenue comes from advertising, while Kuaishou's revenue from the live broadcast accounts for more than 60%.

For education companies, it is more urgent to increase the conversion rate of consumers rather than to capture users' minds and get them to remember the brands through information flow.

Kuaishou's community attributes can naturally strengthen the trust between the accounts and followers, which is more conducive to improving the conversion rate. Meanwhile, Douyin is also making more efforts on the live-streaming business.  But how far will “short video + education” go after the traffic bonus fading away? The answer remains unknown.