NetEase Youdao launched a Smart Lamp device as gadgets meant for learning purposes start to become a new area of opportunity for Chinese Edtech firms struggling under the Double Reduction Policy.

Youdao, Inc. (DAO), the education technology unit under Chinese internet giant NetEase, launched the Youdao Smart Lamp on the evening of April 7. This is another learning product released by Youdao after a series of its smart devices gained popularity, such as the Dictionary Pen, the Pocket Printer, and the Listening Pod.

Zhou Feng, CEO of Youdao, said that the company has extensive experience in the area of smart devices, and that it is confident in turning the lamp into a flagship product in 2022. Using AI technology, the Youdao lamp enables user to look up new words in a split second and aids desktop study while protecting the eyesight of children, according to the company.

This device, which went on sale on April 7 at CNY 1,999 ($314), is part of Youdao’s new product and service mix as it pivots to new revenue streams after the country’s crackdown on for-profit tutoring since last year.

Youdao’s current main businesses include education digital solutions and business-to-business, education, big data services. The company generates in-depth analytics for students and schools, and it customizes learning services by converting homework into a digital format. 

During the Q3 2021 earnings conference call, Youdao executives replied to investor inquiries that learning devices, STEAM courses, adult education, and education digitalization solutions are the four core pillars for Youdao's future growth. 

Youdao continued to expand the suite of learning products and launched the Youdao Listening Pod at the end of Q3 as scheduled, which is a smart gadget making full use of AI technology to efficiently train the user’s listening and speaking ability. Zhou, CEO of Youdao, also said that there was little competition before in the area of smart devices, but the competition became more intense this year.

According to Youdao's financial report for Q4 2021, net revenues from learning products reached CNY 318 million ($49.96 million), up 33.9% from the same period in 2020. This is driven by the substantial increase in sales volume of the Youdao Dictionary Pen, which has shipped approximately 500,000 units. The company believes that smart devices will sustain the momentum for its revenue to grow at a relatively high pace in 2022.

Owing to the Double Reduction Policy and aiming to lighten the academic burden for Chinese students receiving compulsory education, many other Chinese Edtech firms started to seek new business growth trajectories, such as ByteDance, TAL Education, Zuoyebang, and Yuanfudao.