Dong Yuhui resigns, and the “de-Hui” of Oriental Selection is a foregone conclusion

Yesterday, Dongfangzhenxuan announced that Dong Yuhui had left. Although many people had guessed this outcome, it was still a bit unexpected. Both Yu Minhong and Dong Yuhui made public statements about the specific reasons and circumstances, but in my opinion, this is actually a lose-lose situation.

On July 25, Oriental Selection announced on the Hong Kong Stock Exchange that Dong Yuhui has decided to no longer serve as an employee of the company and senior management of a merged affiliated entity of the company. The resignation is due to Dong Yuhui's career ambitions, commitment to his other careers and personal time arrangements, and will take effect on July 25, 2024.

Dongfang Selection stated that in addition to paying all the promised benefits and compensation to Dong Yuhui, the chairman of the board, Yu Minhong, has sought approval from the board and the board's remuneration committee to distribute all the remaining undistributed profits of Yihui Xingtong to Dong Yuhui. In addition, in accordance with the listing rules and the company's articles of association, Yu Minhong has made arrangements for the settlement price of Dong Yuhui's acquisition of Yihui Xingtong. In order to maintain the normal operation of Yihui Xingtong, the company will provide Yihui Xingtong with its self-developed information system free of charge.

Image source: Hong Kong Stock Exchange

At the same time, Oriental Selection mentioned that on July 25, Dong Yuhui (buyer), Beijing New Oriental Xuncheng Network Technology Co., Ltd. (seller) and Yuhui Tongxing (Beijing) Technology Co., Ltd. (target company) entered into a sales agreement, pursuant to which the seller agreed to sell and the buyer agreed to acquire 100% of the equity of the target company for RMB 76.5855 million.

Not long ago, the official Douyin account of Yuhuixingtong announced the news of its relocation. On the evening of July 21, the live broadcast team of Yuhuixingtong, which had "established its own business", completed its first live broadcast at the new office address, firmly ranking first on the Douyin live broadcast sales list that night. According to statistics from the third-party platform Feigua, the live broadcast on the evening of the 21st led to an increase of 167,900 followers on the Douyin account of "Yuhuixingtong" overnight, and the number of followers attracted through the live broadcast room reached 147,000, setting a new record for the increase in followers in a single day in the past month.

In fact, as early as March this year, Dong Yuhui revealed in a live broadcast that his independent studio "Walk with Hui" was going to move. He bluntly said that the rent would soar five times after changing the venue, which caused him to feel stressed.

Image source: Walking with Hui

Lack of space may be just a superficial reason for Yuhui Tongxing’s move. The deeper reason is that “moving” is also conducive to Yuhui Tongxing’s establishment of an “independent” company system.

"Starting one's own business" had already laid the groundwork for Dong Yuhui's official resignation, and after going through a process from covert to overt, the "de-Huiization" of Oriental Selection has finally become a foregone conclusion.

1. Oriental Selects and Cuts “People in the Set”

In December last year, the "Small Composition" incident kicked off a script that was carefully calculated by capital and was halfway swept up by the "fan circle culture."

At that time, Dong Yuhui had grown into a super head and was a meritorious anchor selected by Oriental Selection. When talking about Dong Yuhui, Yu Minhong spoke frankly about his contribution to the development of the company and how he remained calm after becoming a head.

Teacher Yu's comments are full of sarcasm.

During the live broadcast, Feng Tang "translated" for Dong Yuhui in a joking way, saying, "Don't drift, don't stop, don't think about sharing the money." But Dong Yuhui was still laughing awkwardly, not understanding what was going on.

For Yu Minhong, what Oriental Selection wants is a puppet who can sell goods in front of the camera, not a puppet with thoughts. The traffic tool and the shrewd team can almost succeed in promoting anyone they want to promote. Dong Yuhui is just the one who happened to be chosen.

With all the halos, Dong may have the illusion that "who else but me" can do it. His achievements are so great that he frightens his master. He openly fights with words and swords, and secretly "gives up military power over a cup of wine".

Image source: Weibo

At this point, the "de-Hui" tone of the leadership began to emerge, which was probably the helpless choice made by Oriental Selection when it was deeply constrained by Dong Yuhui.

In the age of traffic, long-term gimmicks are the moat of live streaming with goods. With the endorsement of New Oriental Education and Dong Yuhui's sales model, the platform has become popular on the Internet, and Dongfang Zhenxuan has gained millions of fans overnight. For Dongfang Zhenxuan, Dong Yuhui, who pioneered the "cultural endorsement" sales model, is its core competitiveness.

However, the top anchors are destined to not stay in the position for long. The solidification of the top anchors has led to the "sub-health" of the live broadcast ecosystem, which has become the crux of the dilemma for platforms and MCN companies.

Especially under the logical recursion of "people, goods and places", the role of people has gradually become prominent. The anchor is no longer a "worker" of the platform and MCN company, but a "time bomb" that may explode at any time.

On the one hand, the anchors have low traffic, and the platforms and MCN companies do not make much profit. Pushing traffic has become a common means for platforms and MCN companies, intending to "fatten up and fleece the sheep". On the other hand, the stickiness of fan traffic allows anchors who have grown rapidly through pushing traffic to accumulate a certain amount of discourse capital. Under the Matthew effect, resources are concentrated faster, forming top anchors and gradually solidifying, with a great tendency to surpass platforms and MCNs.

To some extent, the operators of the "Little Composition" incident fought each other, intending to directly dismantle Dong Yuhui's "talented poet" persona, pull him down from the altar, and ultimately achieve the decoupling of traffic from the top. By buying off the platform to push traffic, the top anchors were replaced without anyone noticing.

Since then, whether Oriental Selection can land safely after cutting off its head in a drastic way, and whether Dong Yuhui can smoothly transition by letting the traffic flow in a mad rush, have become the focus of discussion in the industry.

2. Dong Yuhui wants to escape from the "struggle of being trapped"

Judging from the current choices, Dong Yuhui did not change his "new employer", but chose to create his own brand, cultivate his own brand, use his own traffic to divert traffic to the brand, and achieve the path of the top anchor to the MCN company or brand class. Just like Brother Xiao Yang, who has hundreds of millions of fans, he developed his own matrix and realized long-term traffic cashing.

With the opening of the new live broadcast room and the improvement of team building, it is expected that Dong Yuhui will also devote all his efforts to the construction of the live broadcast room and team. According to Dong Yuhui's disclosure in the live broadcast room in June this year, the size of his team has grown from about 70 people at the beginning of its establishment in January to about 150 people today, with a relatively complete organizational structure such as legal affairs.

Yu Minhong and Dong Yuhui responded separately to the content of the Hong Kong Stock Exchange announcement on July 25.

Yu Minhong published "An Open Letter to Shareholders and Friends of Oriental Selection" stating that starting today, Oriental Selection's wholly-owned subsidiary Yuhui Tongxing will officially become independent from Oriental Selection, with Dong Yuhui personally holding 100% of its shares.

Image source: Lao Yu Xian Hua WeChat public account (excerpt)

"Yihui Tongxing is about to become independent. To express my gratitude to Yuhui, in addition to paying all the promised benefits, I have requested and obtained the consent of the board of directors and the remuneration committee to reward Yuhui with all the net profits of Yihui Tongxing. At the same time, Yuhui holds the equity purchase funds required by Yihui Tongxing, and I have arranged the payment in accordance with the rules of listed companies and the company's articles of association. In order to ensure the normal operation of Yihui Tongxing's business, Dongfang Zhenxuan, with the approval of the board of directors, will deliver the developed information system to Yihui Tongxing free of charge for use." said Yu Minhong.

Dong Yuhui also published a long article in response to his resignation from Oriental Selection, saying that he was glad that they had spent a period of life together.

Image source: Dong Yuhui Douyin

He said: "Taking into account the current actual situation and development plan, after friendly consultation and unanimous decision by both parties, Yuhui Xingxing will start to operate independently. Leaving the protection of the port, Yuhui Xingxing will sail to the vast sea alone from today. The future is unpredictable, so we can only go all out."

In the view of "Retail Business Finance", the forced decoupling caused by "de-glorification" is mostly a lose-lose situation for both parties.

The development of Yuhuixingxing can be described as unstoppable in the short term, but statistics also show that, apart from the traffic and topics brought by Dong Yuhui, the daily sales of Yuhuixingxing's live broadcast room are generally between 10 million and 20 million yuan, and the daily increase in fans is around 20,000.

On the other hand, although the live broadcast room of Dongfang Zhenxuan, which lost Dong Yuhui, is actively innovating the live broadcast content, the overall operation effect is not optimistic. Not to mention the direct impact of the farewell of core anchors such as "Jingwen" on Dongfang Zhenxuan.

Overall, Yuhui Tongxing and Dongfang Zhenxuan have not made much differentiation, and there are even many overlaps in their businesses, including cultural tourism and product selection and sales. It is inevitable that there will be an awkward situation of one gaining while the other loses, unless another style of live streaming sales model is developed.

Image source: TikTok

As of 19:00 on the 24th, the total number of fans of the Oriental Selection Douyin account fell below 30 million again, falling back to 29.87 million; the total number of fans of "Yuhui Xingxing" was 21.496 million; the total number of fans of Dong Yuhui's personal account was 26.389 million.

Author: RBF Content Group Produced by: Retail Business Finance