Did Yu Minhong lose to his "mother-in-law"? Will he let Dong Yuhui go solo?

This article delves into the tension between Yu Minhong and Oriental Selection, and the role played by Dong Yuhui. From stock price fluctuations to the change in live broadcast style, to the collision between personal brand and corporate value, I hope it will help you gain insight into industry dynamics.

This 618, Yu Minhong slashed the price of Oriental Selection’s stock price.

Recently, he said in the live broadcast room of Wumart founder Zhang Wenzhong, "Dongfang Selection is also in a mess now, and I have no ability to give you any suggestions." It is not certain whether this is a humble show-off or a real complaint. But what is certain is that the topic #Yu Minhong said Dongfang Selection is in a mess# became a hot search on the day, sparking heated discussions.

Perhaps affected by this, on June 3, the share price of Oriental Selection plummeted by nearly 10%, and its market value shrank to HK$17 billion. Some netizens joked that "the share price of Oriental Selection may have been accidentally hurt by Yu Minhong's words."

1. Yu Minhong was “stabbed in the back”

It is hard to say whether the fluctuation of the stock price was caused by accident, but the performance of Oriental Selection in recent months has indeed made it difficult for the capital market to "vote"

Since the beginning of this year, the cumulative decline of Oriental Selection's stock price has exceeded 40%, and its market value has evaporated by more than HK$11 billion. Among them, the most controversial is the sudden change in the style of Oriental Selection's live broadcast room.

Some videos on social platforms show that in the recent live broadcast of the 618 promotion, in the Oriental Selection of Beautiful Life live broadcast room, Dun Dun, who used to be a boy next door, changed from saying "Don't panic, don't panic, there will be moonlight when the sun comes down" to working hard to promote his own products, "You are here, buy an order before you leave"; Yoyo was also beating drums and gongs in the live broadcast room, and the originally quiet atmosphere was broken by the noise, and finally ended with "321, link up!"

It is undeniable that the anchors selected by Dongfangzhen show extremely high professionalism and professionalism. Moreover, this kind of hawking style of bringing goods has aroused consumers' emotions to a certain extent and promoted more orders.
Bianniu.com mentioned that during the 618 period, the sales performance of Oriental Selection's Beautiful Life Live Streaming Room even exceeded that of Oriental Selection's main account, with its daily sales frequently ranking among the top 20 on Douyin, mostly between 10 million and 25 million, becoming the strongest pillar of the Oriental Selection system.

One background worth noting is that by consulting a third-party data platform, it was found that since the official launch of "Walking with Hui" on January 9, 2024, the number of fans and sales of the main account of "Dongfang Zhenxuan" have declined to varying degrees, with a cumulative loss of 1.12 million fans. Since February, the average sales for many consecutive months have been less than 10 million yuan, ranging from 7.5 million to 10 million yuan.

The financial report of Oriental Selection also showed "increased revenue but not increased profits". According to its interim performance report for fiscal year 2024, from June 1 to November 30, 2023, Oriental Selection's total revenue was 2.795 billion yuan, a year-on-year increase of 34.4%; net profit was 249 million yuan, a year-on-year decrease of 57.4%; adjusted net profit was 509 million yuan, a year-on-year decrease of 15.4%.

In addition, Oriental Selection has also faced some negative public opinion recently. For example, an affiliated company of Oriental Selection was fined 13,000 yuan by the Beijing Municipal Bureau of Culture and Tourism for operating travel agency business as an online travel operator without obtaining a travel agency business license; the South American white shrimp sold in its live broadcast room was also targeted by anti-counterfeiters, and it was reported that "sulfur dioxide exceeded the standard by 7 times." Then, Oriental Selection's stock was removed by the well-known index compiler MSCI.

From this, we can see that for Dongfang Zhenxuan, this kind of popular hawking live broadcast is an attempt under the pressure of business. Objectively speaking, the change in the style of live broadcast can indeed partially alleviate the anxiety of traffic in a short period of time and boost the sales performance. But from a longer-term perspective, Dongfang Zhenxuan's move is tantamount to destroying its own strength, and the loss outweighs the gain.

You know, one of the key reasons why Oriental Selection can stand out from Douyin's traffic screening mechanism is that its live broadcast room not only displays and sells goods, but the anchors also share relevant knowledge and convey cultural values, so that consumers can gain knowledge and fun while shopping.

This knowledge-based way of selling goods has ushered in the era of content live streaming, forming a resistance to traditional ways of selling goods, and to some extent, it has also formed a dimensionality reduction attack. Dongfang Zhenxuan has been continuously recognized by users and praised as a clear stream in the mudslide of "hawking live streaming". To a large extent, it is also following this unique label.

This change also "contributed" a hot search to Oriental Selection. Just two days ago, the topic #After Dong Yuhui left, the style of Oriental Selection's live broadcast room changed# sparked heated discussions. Some netizens said that this is the true face of Oriental Selection, and now they can't pretend anymore, "The most cultured live broadcast room on the entire network has become like this?" Other netizens said "I saw the shadow of Li Jiaqi" and "I thought Li Jiaqi joined Oriental Selection." There are even comments that knowledge-based live broadcasting is Dong Yuhui's personal style, not Oriental Selection. After Dong Yuhui left, this style could not be replicated, so the anchors of Oriental Selection began to let go of themselves and return to their original appearance.

This may be one of the reasons why Yu Minhong is "discouraged". From his personal perspective, Oriental Selection is "stabbing in the back" of his original intention.
Yu Minhong once admitted in March last year that he despised the noise of "buy, buy, buy" in online live broadcasts. In his mind, live broadcasts should be a way to calmly explain products and spread knowledge.

He also said that he personally did the first live broadcast of Oriental Selection. At that time, New Oriental had no idea how to select products and only selected the most expensive agricultural products in China. However, he still took maps and history books and told the stories behind each product to the buyers of Oriental Selection. Later, everyone commented that they came to listen to the lectures instead of buying things. "This is the effect I want. Although I didn't sell many products, I still persisted."

Behind him, Dong Yuhui and other anchors also follow this style. In other words, "321-uplink" was the model that Yu Minhong once hated the most, but now Oriental Selection has really become what he "looks down on".

2. The “choose one of two” problem remains unsolved

Even though Yu Minhong is a business tycoon who has experienced many battles, he still has some emotions about Oriental Selection.
During the conversation, he also talked about the negative impact of the Internet on him, saying that in the past year, he had been abused, accused and insulted more times on the Internet than in his 100 lifetimes combined. He plans to stay away from the business world in the future and spend more time traveling. He doesn't want to struggle desperately, nor does he want to be entangled in disputes.

In Tang Chen's opinion, the sudden change in the style of the Oriental Selection live broadcast room can be solved by holding an internal operation meeting. Yu Minhong did not bother to bring it up publicly, as it would be a public criticism of his own employees and would cause the stock price to plummet. His "inner monologue" did not explicitly refer to Dong Yuhui, but it did not leave Dong Yuhui at all. This also precisely reflects the fundamental problem of Oriental Selection: the traffic rules have changed, but Yu Minhong's business and management thinking has not changed. His confusion and complaints today are, to some extent, also due to the "choose one of two" problem that has not been completely resolved.

After the "small essay storm" at the end of last year, Yu Minhong was very tough on Dong Yuhui for a while. Later, with the pressure from Dong Yuhui's fans, the main account of Oriental Selection lost a lot of fans and the performance of bringing goods declined. He first shed tears and removed Sun Dongxu (Dongfang Xiaosun) from the position of executive director and CEO of Oriental Selection. But he also added that "Sun Dongxu is still his brother and will still contribute to Oriental Selection"; then he apologized three times in three days, invited Dong Yuhui back, supported him to set up a new live broadcast room "Walking with Hui", and appointed him to three important positions as cultural assistant to the chairman of New Oriental Education and Technology Group, vice president of New Oriental Cultural Tourism Group, and senior partner of Oriental Selection.

On the surface, Yu Minhong stabilized the situation by "stepping back and stepping forward", temporarily solved the thorny "choose one of two" problem, and completed the "de-Dong Yuhuiization". But in fact, Yu Minhong still did not put himself in the right position, nor did he put Dong Yuhui in the right position.

Unlike the traditional education and training business that Yu Minhong is good at, live streaming e-commerce sells not only the products themselves, but also the consumer emotions and the personality of the super anchor, and the latter is the core asset of a live streaming organization or live streaming e-commerce company. From Li Jiaqi who said "all girls buy it", to "crazy little Yang brother" who shouted "brothers, lower the price", or Simba who scolded Kuaishou at every turn , to Dong Yuhui, the product and traffic logic in the traditional business environment is no longer applicable. The commercialization of super anchors and empathy with consumers are the strongest selling points.

In this process, consumers' "user awareness" is rising, and they are beginning to take the initiative in the whole game. When Li Jiaqi kept talking about "all girls", consumers put him on the "top spot" in the live broadcast industry. When Li Jiaqi questioned consumers' inability to afford a "79 yuan eyebrow pencil", Li Jiaqi was also dethroned by consumers.

Yu Minhong also underestimated the power of Dong Yuhui's "mother-in-law" (fan group).
According to preliminary statistics, the number of fans of "Walking with Hui" has approached 20 million in more than half a year, which is the fastest in attracting fans among similar live broadcast rooms in China. On January 9, 2024, Dong Yuhui's "Walking with Hui" premiered, gaining more than 2.7 million fans, with an estimated GMV of 160 million yuan and more than 54 million viewers. The sales of "Walking with Hui" reached 800 million in 20 days. As of May 27, 2024, the number of fans of the "Walking with Hui" account exceeded 19.038 million, and the number of fans of Dong Yuhui's personal account exceeded 25.375 million.

This is in stark contrast to the "poor" performance of Oriental Selection. According to media statistics, the sales of Oriental Selection in the first three months of 2024 are as follows: 557 million yuan in January, only 228 million yuan in February, and rebounded to 286 million yuan in March. The sales of "Walking with Brilliance" from January to March were 889 million yuan, 450 million yuan, and 626 million yuan, respectively, far exceeding Oriental Selection in the same period. In April, "Walking with Brilliance" topped the Douyin monthly sales list with 580 million yuan, Oriental Selection ranked ninth with 190 million yuan, and Oriental Selection Beautiful Life ranked tenth with 160 million yuan.

The success of Yuhuixing demonstrates Dong Yuhui's ability. Under Dong Yuhui's leadership, the entire team has demonstrated strong market adaptability and execution capabilities.
They are not just selling products, but also "selling" a lifestyle and attitude, which is exactly what young consumers are pursuing. Whenever Dong Yuhui recommends a product during a live broadcast, he can accurately capture the audience's psychology and needs.

However, from the previous agreement between Yu Minhong and Dong Yuhui, it can be known that Yu Hui Xing Tong is still within the system of Oriental Selection. Yu Minhong once revealed in a live broadcast that the income generated by the account will be included in Oriental Selection, but if Dong Yuhui leaves Oriental Selection, the ownership of the account will belong to Dong Yuhui.

As Dong Yuhui's personal IP influence continues to expand, his situation in Dongfang Selection becomes more embarrassing. Although he holds three high-level positions, netizens interpret them as empty positions like "Bimawen". Dong Yuhui also responded to this in the live broadcast room, saying that senior partner is not a Bimawen official position, but has authority. In response to the question of "what can the vice president of New Oriental Culture and Tourism Group manage" mentioned in the interview with China Daily, Dong Yuhui responded that he didn't know what he could manage. He felt that he had great power, but people who think of using power to embarrass others will definitely not do well.

3. Dong Yuhui "shadows" Oriental Selection

This situation was pointedly exposed by Luo Yonghao, "the best mouthpiece for mothers-in-law" and former colleague of Yu Minhong: If the top anchors of live e-commerce contribute most of the profits to a company, they should take most of the profits. This is the result of market value distribution, not the boss being kind.

Obviously, in the eyes of the "honest" Yu Minhong, Dong Yuhui is still an employee of his company, and the two parties are in an employment relationship. The only person Dong Yuhui can really call the shots at present is Yuhui Xingxing, and he is just the person in charge of Yuhui Xingxing. In Dongfangxuan or New Oriental, he is just a "senior worker" with traffic, and has no real say. This is very different from the relationship between Li Jiaqi and Meiwan. As for being Yu Minhong's successor as netizens say, it may be even more distant.

Although Yu Minhong repeatedly stressed that he and Dong Yuhui were in a cooperative relationship, in reality, it was "lip service". For example, before the essay incident, Dong Yuhui said that he had no place to live in Beijing and his salary was not enough to support him to buy a house. Yu Minhong generously lent him money to buy a house and said "you don't have to pay it back". The comments of netizens are very interesting: Mr. Yu chose to issue loans between giving money and issuing shares. Another detail is that at the 30th anniversary celebration of New Oriental, Dong Yuhui was not eligible to enter. After being led in by Yu Minhong, he was temporarily arranged to sing, take photos and add chairs.

To put it bluntly, Oriental Selection is now overshadowed by Dong Yuhui. As long as Dong Yuhui is still sought after by the "mothers-in-law" and Oriental Selection cannot hatch a second "Dong Yuhui", it will continue to suffer in Dong Yuhui's shadow. Such sudden changes in operational strategy will continue to give Yu Minhong headaches.

In this context, some people pointed out that Yu Minhong's management philosophy has changed dramatically after his trip to Tibet. He said in the live broadcast, "Yu Hui has been very busy recently and is trying to start his own business. Yu Hui is now mainly a self-driven and self-developed entrepreneurial model."

From trying to tie Dong Yuhui down through emotional means to now agreeing with Dong Yuhui's independent entrepreneurship, Yu Minhong's ideas have indeed changed. This is because, on the one hand, Yu Minhong is trapped in his own thinking, and on the other hand, he is gradually awakened by the traffic of "mothers-in-law". At the same time, Dong Yuhui made a vague response to his independent entrepreneurship, admitting in the live broadcast that he now needs to bear all financial responsibilities, including rent and employee salaries, and he has to consider whether these expenses can be covered by income when he wakes up every day.

This may be the best choice for Yu Minhong if he "doesn't want to be entangled in disputes": let Dong Yuhui go solo.
He also knew that a large part of the abuse, accusations and insults he had suffered in the past year came from his "mothers-in-law".

He also has to face the fact that the current situation is no longer about "de-Dong Yuhuiization", and Dong Yuhui has enough autonomy to choose whether to "de-Dong Yuhuiization".

If Yu Minhong really makes this decision, he will break out of his own thinking dilemma and bring an effective solution to Dong Yuhui and Dongfang Selection. The so-called retirement will be nothing more than an excuse.

References:

• BT Finance, "After going to Tibet, did everything change for Yu Minhong towards Dong Yuhui?"
• Dazhong Daily, "After apologizing three times in three days, Yu Minhong still can't escape his own shackles"

Author: Tang Chen

WeChat public account: Tang Chen (ID: late-news)