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On January 19, 2022, Qiaohu China’s official website issued an announcement clarifying that the brands, businesses and services of Benesse Group and Qiaohu Lezhi Xiaotiandi are operating normally, and the Chinese market is crucial to Benesse Group Importantly, there are no plans to exit the domestic market.
Qiaohu is an early childhood education brand owned by Japanese education giant Benesse (9783.TYO). Its business in mainland China is solely operated by its subsidiary Benesse Trading (China) Co., Ltd. The business of Qiaohu Early Childhood Education Center mainly relies on the franchise model. Shanghai Herring Baby Education Management Consulting Co., Ltd. is the general operating company of Qiaohu KIDS business system in mainland China.
In the announcement, Benesse Group also severely condemned the illegal Qiaohu KIDS center franchisees and apologized to consumers.
Franchise management and standardized operations have long been the operating pain points of Qiaohu Early Childhood Education.
Since last year, many parents have posted on social media that Qiaohu early childhood education center franchise stores in Shanghai, Hangzhou, Changsha, Chongqing, Zhengzhou and other places have closed down and are in arrears with tuition fees. According to a CCTV News report in 2020, due to the bankruptcy of a "Qiaohu KIDS" early childhood education center in Fengtai District, Beijing, parents were unable to recover tens of thousands of yuan in tuition fees.
A Mr. Li who runs Qiaohu-related businesses told Jiemian Education, “The closure of Qiaohu offline early childhood education center franchise stores will lead to a decline in users’ trust in the brand, and they will not dare to recharge in large amounts. "In addition, due to the impact of the epidemic, people's jobs have become unstable, their incomes have dropped, and their early childhood education consumption has declined significantly. The impact of fewer newborns on early education business cannot be ignored.
The Chinese market is crucial to the Benesse Group. The semi-annual report for fiscal year 2021 shows that in the six months as of September 30, 2021, the cumulative number of registered people in the Japanese preschool business (Kodomo Challenge) was 4.575 million; the cumulative number of registered people in the overseas preschool business was 7.192 million, with the latter consisting of mainland China, China Market composition of Taiwan and Indonesia. China is the main overseas market.
Qiaohu’s development in China can be traced back to its entry into Taiwan in 1989. Unlike Japan, where the birthrate is declining and the childcare market is shrinking, Qiaohu has been advertising in popular variety shows such as "Kangxi Is Coming" for many times since the 1990s, and has become very popular in Taiwan.
In 2004, Benesse began to investigate the early childhood education market in mainland China and formed a strategic partnership with China Welfare Institute Publishing House. In 2006, Benesse registered the "Qiaohu" series of brand trademarks, published and released the "LeZhi Little World" series of early education products, and localized the design of "Qiaohu".
In November 2020, Zhihu user "Cai Cai Ma" concluded that taking babies aged 7-11 months as an example, the "outline" of Qiaohu is basically the same. Taiwanese picture books are richer and more streamlined, and mainland picture books are richer and more concise. More toys.
In comparison, the Taiwan version is more life-oriented, while the mainland version is more preachy. These changes may be Qiaohu’s localization attempt to meet the learning needs of mainland exam-oriented education. However, as the mainland attaches great importance to quality education and comprehensive education, the content of the mainland version of Qiaohu needs to be upgraded urgently.
On the other hand, low sales efficiency has also been criticized.
In the early days, Qiaohu used TV marketing and recommendations from acquaintances, and extended the user life cycle through a membership system, with remarkable results. With the development of streaming media, Qiaohu relies on telemarketing for marketing. Many parents went to its official account to leave messages, "The product is good, but can we stop making sales calls?"
In the semi-annual report released in November 2021, Benesse stated that for China's Qiaohu business, it will integrate digital transformation into the sales structure and use AI recognition technology to develop courses. It did not involve the issue of Qiaohu early childhood education.
In response to the declining birth rates in China and Japan and the limited space for early childhood education market development, Benesse formulated the "Medium-Term Management Plan for the Fiscal Year 2021-2025", with special emphasis on increasing investment in the elderly care industry. This also includes China. Official data shows that the nursing and childcare business accounts for 29% of Benesse's total performance, surpassing Qiaohu.
Qiaohu’s crisis in China does not stop there.
Externally, it also faces competition from similar early education centers such as Gymboree, Mejim, Sports Baby, and Baby Friendly Room. In terms of early education IP, Peppa Pig, Baby Bus, Paw Patrol, Super Baby JoJo, etc. are coming fiercely.
Faced with these impacts, Qiaohu launched cartoons such as "Lovely Qiaohu Island", "Qiaohu Explores the Wonderful World", and "The Adventures of Qiaohu's Spaceship", but its influence has yet to be tested.
On January 14, Qiaohu official announced the business upgrade of Qiaohu KIDS Growth Center on the WeChat official account. Qiaohu said that in the future, Qiaohu KIDS will have more innovative stores, more comprehensive learning plans, and more interesting activities. For China Qiaohu, there is still an urgent need to upgrade its IP image and enhance its franchise store management capabilities.