Disney English’s Exit from China
On June 22, 2020, Disney English published an open letter to students and parents on its official website and WeChat public account, announcing the closure of all Disney English centers in China. Free online courses were discontinued from June 22, and all refunds to students were arranged subsequently. This marked the official exit of Disney’s education business from China after a 12 year journey.
“No one knows the language of children better than Disney.” With the classic Mickey Mouse head and the unique font of “Disney”, Disney English once used this slogan in the advertisement, trying to create a “fairy tale world” in general, for Chinese children. After all, in the Chinese education market that has undergone many significant changes over the past decade. There are many lessons in why our beloved Number 1 Entertainment Brand Disney has not been able to pull off its “magic” in helping kids learn English in Chia.
Once Among Top 3 leveraging Disney Brand
In 2016, when parent named Yue Ya walked into the Disney English Center in Shanghai for the first time with her two-year-old son, it was a nice surprise. Everything in front of her completely broke her stereotype of the tutoring class: before the class, the teacher did not start teaching directly, but arranged a pre-class warm-up and singing English song; in a colorful, fairytale-style classroom, “ Typical cartoon characters from Disney, such as Mickey, Snow White and Donald Duck, stepped out of the animated film and became interactive protagonists in the English classroom. Teaching words and dialogues are also closely combined with the lines in the animation.
“The son immediately fell in love with this place. “Because the child is happy is the premise of interest, it is difficult for parents not to pay for this child’s favorite.”
Therefore, since the first Disney English Center was launched in Shanghai in 2008, the Walt Disney Company’s direct training brand has successfully entered the golden age of Chinese children’s English because of the existence of the Disney Animation Halo.
In 2010, Disney English has expanded from a “base point” on Maoming Road in Shanghai to a layout that includes 11 training centers in Beijing and Shanghai. Four years after its founding, there are 44 “Mickey Heads” beating in 10 cities in China on the map of the training center on Disney’s official website.
And Disney’s purpose and ambitions are far more than that-according to the report of the Financial Times in 2010, Disney company should put the company’s main energy into the development of the Chinese market, planning to build 148 languages in China within 5 years The school will teach English to 150,000 Chinese children every year by 2015. It is reported that Disney will earn more than 100 million US dollars (about 670 million yuan) in China through these schools within 5 years.
Indeed, Disney’s original judgment was forward-looking. At that time, the children’s language training was in its explosive growth phase. From 2013 to 2016, the domestic after-school tutoring market ushered in explosive growth. K12 education, children’s English training, vocational training, quality education and other subdivisions Full bloom.
Among them, the children’s English training is obviously a dark horse taking off rapidly in the Chinese education market. According to research by Frost & Sullivan, from 2012 to 2016, the scale of the Chinese children’s English tutoring market increased from RMB 43 billion to RMB 85.2 billion at a CAGR of 18.6%.
In this wave of rising English training, Disney has become a wave that can hardly be ignored. According to public data, the market share of EF English for Kids, New Oriental Bubble English for Kids, and Reth English (NASDAQ:REDU) once accounted for about 3.6% of the total market share in 2016. However, according to the annual cost of more than 16,000 yuan, EF Children’s English, Ruisi English and Disney English are ranked in the top three in the high-end market.
“Actually in first-tier cities, around 2016, children’s English training institutions are almost as good as fur. But most of them are really like “fur”, there is not much presence. The main choice is the comparison of Le Ning, EF and Disney. Reliable and more famous.” Yueya told us. “Especially online education was not popular at the time. Compared with offline education and training institutions, it was more difficult to distinguish. For children 1–3 years old , Parents still believe in offline education and training institutions.”
Fierce Local Competitions and Market Shift of Technology Paradigm
Obviously, because of the existence of the Disney anime halo, its opening is considered smooth. But the good times don’t last long: Disney English’s road to expansion began to show signs of failure three years later.
At that time, Andy Mooney, the chairman of Disney Consumer Products Management who was in charge of the project, announced that he was leaving for personal reasons. Disney English then changed its development path and stopped its large-scale expansion plan. Its plan to enter the Brazilian market was once shelved and eventually it was difficult to produce.
Originally the top priority, the territory in China has also changed-the market authority has shrunk and the business form has solidified. It is not difficult to see from the daily content of the Disney English WeChat public account that its business is centered on Disney animation IP.
Corresponding to this, during this period, China’s local English training institutions are ushering in a year when the Internet dividend concentration broke out, and online education is booming. Under the pressure of capital, a large number of foreign language online training institutions are on the upswing and launched a fierce attack on the traditional Chinese English education and training institutions represented by New Oriental.
Since then, online education companies have intensive close combat: capital-intensive admissions in 2017, team expansion in 2018, and head players in the summer of 2019 through heavy marketing, just over 4 billion yuan in just two months, only for Seize bigger cakes.
There is consensus in the industry that online and offline education companies are competing for the same batch of users on this track that relies on the stock market. Every time online education companies take further steps, the territories of offline education will lose their ground.
The data is more intuitive-since 2015, the online penetration rate of the online youth English education market has achieved a breakthrough from 0 to 1, increasing from 0.8% in 2015 to 9.1% in 2018, an 11-fold increase in 4 years.
Under such squeeze, even Yu Minhong, who once slogan “The profitable gameplay in the Internet era cannot replace the profitable model of traditional education” in the interview, is hard to watch the cakes eaten by New Oriental slowly being divided by online education institutions. Food, have to survive in the change-build an online platform, develop an OMO model that combines online and offline.
In this wave of change, there is no lack of established traditional English teaching institutions like EF and Reed. Among them, EF Young English launched an online and offline integrated learning solution in March 2019.
So, in times of difficulty, institutions such as New Oriental Bubble Children’s English, EF English, Ruisi and others brands, and the total number of their respective teaching centers has exceeded hundreds.
However, the unresponsive “foreigner” Disney, apparently “lost the team”, and was gradually squeezed to the edge of the track-with the “siege” of domestic online education, Disney English gradually closed the training center, 2013- During 2014, Disney English has closed some offline institutions in Shanghai, Ningbo, Wuhan, Beijing and other cities.
As of this time when it announced its withdrawal from China, it only opened 26 all-direct training centers in six major cities, including Beijing, Shanghai, Guangzhou, Nanjing, Chengdu, and Shenzhen. Among them, Shanghai has the most, reaching 11.
This statement is confirmed in its latest open letter: “In the past few years, we have noticed changes in consumer preferences, and more consumers tend to learn online.” In other words, Disney English has noticed changes in the industry, but No corresponding adjustments or countermeasures have been made for this change.
“In the past ten years, China’s education and training market has experienced very rapid growth. In this process, local companies have very strong sales and marketing capabilities, with obvious advantages.” based on an industry source.
But for foreign companies, the company’s national layout is generally unified by the headquarters, which easily leads to problems in marketing and brand localization.
The 2020 epidemic has made Disney more embarrassed to walk on only one leg. When the tide came, even without preparation, Disney English had to start “winter swimming.” Although it also provides free online courses for students from March 19th. But this transition plan has not eased its operating pressure.
It is difficult to have a “fairy tale” under exam-oriented education
“Even if it is the finishing touch, the students and staff are taken care of.” This is a high-profile message from a parent under the Disney English farewell letter.
Indeed, compared to many educational institutions that had hurriedly “run away” before, Disney English at least made this farewell worthy of a “fairy tale”.
However, in fact, Disney English, which specializes in high-end routes, has not gained huge market share. Wanting to tell a fairy tale in the Chinese education market is not as easy as expected.
The official website of Disney English shows that the cost of each class is about 250–260 yuan, and the total cost is 24,000 yuan/year. This is not cheap compared to most English education institutions.
“Disney was once the LV of English training institutions.” Some parents said after comparing a number of English education institutions, “Spending such high tuition fees to endorse a foreign brand, most parents will still have some concerns.”
This also explains to a certain extent, why Disney English has always been the first-tier cities. The high tuition fees make it difficult to sink to three or four cities.
“Disney English’s high tuition fees are mainly due to its high cost. From the school site decoration to the teachers, Disney is a high-end configuration, which makes its self-employment cost high.” Once worked in a Disney English Center in Chengdu Annie, the teacher, told us that the average monthly salary of foreign teachers who speak English is about 24,000 yuan. In addition to recruitment, management and other expenses, some foreign teachers still need to solve accommodation problems. Overall, the monthly expenditure of a foreign teacher is about 30,000 yuan.
Another important reason is that, despite the favor of children, Chinese parents may take into consideration Disney English, which provides English learning and training services for children aged 3–12. However, under test anxiety, it is difficult for them to continue to pay for their “fairy tale”.
According to the official introduction, Disney English has designed three courses for the needs of children of different ages: exploration class (children 2–3 years old), basic class (children 4–6 years old) and improvement class (children 7–12 years old).
However, a comparison analysis by industry insiders pointed out that “the overall difficulty of its teaching and research content is only about one-third of that of other brands in the class. The courses are also difficult to meet the demand for PET and KET examinations that have risen in China in recent years, and there is no complete bridge. Due to system and other reasons, the problem of low renewal rate is difficult to solve.”
“Before the elementary school, the children always read Disney English. After all, its educational teaching method is very suitable for the introduction of English. However, after the elementary school, facing the pressure of school selection, parents will inevitably need to consider more tangible teaching content and effects.” Some parents admitted that Disney’s teaching ideas are difficult to adapt to the characteristics of Chinese education.
“Although Disney is very famous, it is mainly because of its entertainment industry. English education is still inadequate to meet the needs of local students.” Parent Xia Xia also told us, “Although Disney’s teacher is a foreign teacher With a Chinese teacher assistant, the foreign teacher is responsible for classroom activities, and the assistant is responsible for order, but obviously can feel that the role of the Chinese teacher is not very great.
Whether it is Disney’s teaching materials or classroom design, they are more inclined to foreign styles. Although the interest of children in class is very high, it is difficult to tell whether they like English or ‘Mickey’ in the classroom. “
Therefore, most of the students of Disney English are still concentrated in the kindergarten stage, and the business of younger students is weaker. But without expanding in more ages, it will inevitably restrict the richness of teaching and the expansion of products and markets.
“And this, it is easy to determine the life and death of the training institution.” An experienced investor in the education industry said that, obviously, for the difficult English of Disney, during the epidemic, it was a “stop the boat” to retreat, and it was a timely stop. .
Right now, the Disney English Center in many places has already started the refund registration work, and Yue Ya has also become one of the parents who applied for the refund. On the day of the application, she wrote in the circle of friends, “Goodbye Mickey and friends, the future only I can meet again at Disneyland.”
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