China Online Education Group, a digital education platform specializing in English teaching and also known as “51Talk,” announced that Zhang Liming has tendered his resignation as the company’s COO due to personal reasons. His last day with the company will be May 15.
In 2014, Zhang joined 51Talk as co-founder to serve as COO. In June 2016, Zhang and Huang Jiajia, firm founder and CEO, attended a listing ceremony of the company on the NYSE.
51Talk’s original main business was one-on-one tutoring with Filipino teachers, which had lost money for a long time. In 2020, its performance improved, with non-GAAP net profit in the first quarter of 2020 reaching 57 million yuan ($8.94 million). At the same time, its operating cash flow in Q1 2020 was 172.7 million yuan, an increase of 164.3 million yuan from the same period of 2019.
51Talk’s net revenue in 2021 was 2.1665 billion yuan, an increase of 5.5% from 2.0541 billion yuan in the same period of 2020. Net profits were 105.7 million yuan, compared with 147 million yuan in the same period of 2020. The non-GAAP’s net profit also reached 132.7 million yuan in 2021, compared with 173.7 million yuan in the same period of 2020.
In 2021, the domestic private tutoring industry suffered from a major adjustment. China’s new “Double Reduction” policy aimed to systematically regulate the business types and operating hours of after-school tutoring institutions. This policy quickly had a major impact on the education and training industry. The business of TAL Education, New Oriental Education and Gaotu Techedu Inc. has been hit hard. The market value of TAL Education has dropped from a peak of more than $50 billion to more than $1 billion.
51Talk and VIPKid, which provide online English classes by connecting Chinese students with foreign-based English-speaking teachers, have been greatly impacted. The Double Reduction policy clearly stipulates that it is strictly forbidden to hire overseas-based teachers to carry out training activities.
In August, 2021, 51Talk announced that it would no longer sell overseas foreign teacher courses to users in China. “The main business of 51Talk at the beginning of its establishment is English training for adults. We will continue to increase investment in the specific business and provide high-quality courses,” 51Talk said.