Gaotu to Stop Compulsory Education Business by End of Year

On Monday evening, Gaotu Techedu Inc. announced that it will end its off-campus tutoring services related to academic subjects from kindergarten through grade nine (the “K-9 Academic AST Services”). The last day of services will be December 31, 2021 and will apply throughout the Chinese Mainland.

Gaotu pointed out in the announcement that the termination of its K9 tutoring services will have a significant and adverse impact on the company’s revenue in the fiscal year ending December 31, 2021 and subsequent periods. According to the financial report of Gaotu, in the second quarter of 2021, the revenue of K12 courses, including STEAM subjects, was 2.09 billion yuan ($327.55 million), up 51% year-on-year, accounting for 94% of the total revenue of the company in the second quarter.

Gaotu added, “Next, the company will continue to operate our business except for the compulsory education subjects, and shift our focus to other educational products and services. We’ll strengthen the development of various businesses such as education products for adults and intelligent digital products.”

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Recently, many education enterprises, such as Xueda Education Group, Tomorrow Advancing Life (TAL) and New Oriental Education, have announced that they will cease offering services related to the country’s compulsory education business. On the afternoon of November 16, Netease‘s Youdao Education platform announced that it too would withdraw from the off-campus tutoring business for compulsory education in the Chinese mainland by December 31, 2021.