Analysys believed China's Internet education market presented the following characteristics in the 4^thquarter of 2017: 

1.   K12 Education and Foreign Language Learning Remained Popular, and the Sub-Areas like Quality Education and STEM Education Became the Favorite of Investors 

According to the statistics, the primary education market involved 119 financing events in the 4th quarter of 2017, including 11 M&A (including the proposed) and strategic investment events; compared with the 3^rdquarter, the overall vitality was weaker while total investment was nearly equal.  In the 4^thquarter, education industry was embroiled with a series of negative news, with a low ebb in early education. But on the whole, the areas like K12 and foreign language learning attracted huge investment. On one hand, capitals were focused on the leading companies in a certain sub-area while the investment of large sum was distributed in the areas with financing requirements in their middle and later periods. On the other hand, capital penetration in education industry was maturing, and investment organizations began to pay more attention to corporate nature, true growth potentials, long-term development strategies, etc. 

Meanwhile, quality education, STEM education, art education, etc. have been accepted and valued by domestic families after the effective verification abroad, and industry integration accelerates and becomes a new favorite for domestic educational capital. In this quarter, the relevant companies achieved quite excellent performance in financing. For instance, on October 8, The Art Life Education Group, a children’s art education institute, completedSeries BFinancing Round, receiving the investment of RMB 160 million; on November 17, Codemao, which focuses on programing education for adolescents, receivedSeries B RoundInvestment, RMB 120 million. In addition, to promote education popularization and equality, sharing education, commonweal classes, etc. have been the focus of the companies in the field in the recent years. In addition, “the education of theory and practice” has been discussed again after two years.  

2.   Value on Accumulation of Big Data and Artificial Intelligence, Continued Scientific Improvement for Better Education 

The development of advanced technology and powerful data support has brought opportunities to huge changes in the market and industry. As big data, AI, VR, etc. are applied and penetrate into a variety of industries; online education also tends to pursue in-depth understanding of each learner’s requirements based on accumulation and analysis of the data about learning style, learning habit, and the like, in an attempt to realize customized and refined course design and relevant service delivery. Technologies like VR and AR have offered stronger experience and immersion, crystallized and scenarized abstract knowledge through scientific means, and then presented them before students, providing conditions for online interaction for the subjects with high requirements for practical operation and scenarization. 

As AI and teaching scenes integrate with each other, the companies launched their own smart education lab or teaching aid system one after another to enhance intelligent education. For instance, Liulishuo established a special AI lab for English learning study and launched AI tutor, “Know Your English” in October; 51Talk provided fresh interactive English learning experience and established in-depth cooperation with Sweden’s new generation of children intelligent robot, ARMOTO; Xueersi.com released its second personalized learning system, IDO2.0, which can build a diversified closed-loop online learning platform by face recognition, voice recognition, and the like. In addition, the “Gaokao Robot” developed by Master Learner, “Education Brain”, an AI product by Baidu, etc. also came into existence. 

As more and more sub-areas of online education are discovered and education contents and users tend to be diversified, it is expected that most companies will take advantage of technology and be committed to delivering one-to-one refined and customized service to each user in the ecosystem focusing on products, teaching and research, and users, so as to satisfy differentiated, diversified, and in-depth learning needs.  
 

From the perspective of Internet education users, in this quarter, most education apps focused on primary and secondary education, children education; but overall, obvious ups and downs emerged in each area. After the beginning of December, the work, rest, and varied daily schedules had been fixed. Course learning, homework, etc. became common. In addition, the 4 quarter fell on the end of the year, when schools would hold final examinations of different subjects, so students would review and reinforce what they had learned based on their own conditions. In addition, with CET4 and 6, which are organized twice per year, students had to copy with multiple tasks and make effort at the last moment. Therefore, driven by such rigid demands, the use frequency of primary and secondary education apps, learning tools, and foreign language learning apps increased significantly, along with stronger user stickiness. This contributed to significant increase in monthly active users of the three sub-areas. On the contrary, from the perspective of overall status of children education, education platform, vocational education, and the like, monthly users generally showed a downward trend. According to the latest data of Analysys Qianfan, the active uses of primary and secondary education apps reached 111.045 million, with 51.561 million for children education in December 2017. 
 

From the data about internet education apps with top 10 monthly active users in December 2017 as released by Analysys Qianfan, Zuoyebang ranked the first with 62.145 million active users, along with rapid growth in its overall active users in the 4^thquarter; Xiaoyuansouti ranked the second with 23.048 million active users, followed by 17zuoye Student Client (18.378 million active users). The three apps are used for searching problems. As you can see, during the quarter’s routine study, course assignments and homework were inescapable. Additionally, as final exams and unified tests were around the corner, the comprehensive review and reinforcement seemed to be an increasing workload. The application scenes for problem searching apps increased significantly, along with stronger user stickiness. As the semester was coming to an end, due to temporary explosive growth in user demands, these apps witnessed substantial increase in monthly active users.