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Yu Han, special commentator of The Paper

On July 25, Yu Minhong published an open letter to shareholders of Oriental Selection on his personal WeChat official account in response to Dong Yuhui's resignation. The open letter shows that starting from today (July 25), the wholly-owned subsidiary of Oriental Selection, Huixingxing, will be officially separated from Oriental Selection, and Dong Yuhui will personally hold 100% of its shares.

Previous report → "Dong Yuhui resigns! He responded and Yu Minhong published a statement"

Dong Yuhui officially left Dongfang Zhenxuan, and the day finally came. Dongfang Zhenxuan announced that it sold 100% of the equity of Yuhui Xingxing to Dong Yuhui for 76.5855 million yuan. Yuhui Xingxing will become completely independent and become Dong Yuhui's personal company. Dong Yuhui will also transform from a live streamer to the helmsman of this independent platform.

Yu Minhong (right) and Dong Yuhui (left). Image courtesy of Visual China

Although the news of his resignation triggered public opinion, Dong Yuhui's departure was, to some extent, not a surprising result. The essay controversy at the end of last year made the internal contradictions of Dongfang Selection completely public, and the strategic adjustment of "getting rid of Dong Yuhui" failed. In order to calm the storm, Dong Yuhui "started his own business" and founded a new account called "Yihui Xingxing". With the strong support of "mother-in-law fans", he became the industry leader.

However, this formal separation has not completely resolved the internal conflicts of Oriental Selection. Although the new account operates independently, it still maintains a close connection with Oriental Selection and exists as a sub-brand. This means that the original management structure, resource allocation and other issues still need to be properly resolved.

Under the deeply bound relationship, as Yuhui Tongxing continues to grow, Dong Yuhui's personal influence continues to increase, and the tension of the original contradiction may gradually increase, which may not be conducive to the sustainable development of Yuhui Tongxing. Of course, it will also further marginalize Dongfang Zhenxuan.

On the other hand, Oriental Selection itself is a listed company, but as Yu Minhong mentioned, in the past six months or so, it has been repeatedly criticized by public opinion, and the company's business and stock price have been affected, which undoubtedly casts a layer of uncertainty on the company's long-term development.

Therefore, after careful consideration, the two sides made the decision to "break up", which was actually a helpless move based on realistic considerations. Under the leadership of Dong Yuhui, the completely independent Yuhui Xingxing can more purely implement his personal ideas and vision and achieve more independent development.

According to the current sales capacity of Yuhui Tongxing, the price of 76.5855 million yuan for Dong Yuhui's redemption is within a reasonable range. In addition, according to the announcement, all the net profits of Yuhui Tongxing will be awarded to Dong Yuhui. This shows that although the internal contradictions are irreconcilable, Yu Minhong still showed the demeanor of an entrepreneur, did not ask for too much, and was able to help others, which was praised by many netizens for his vision.

In fact, this "perfect breakup" still cannot escape the common game mode between Internet MCN agencies and "Internet celebrities": the agency "broadcasts seeds, but harvests little", "one seedling in a thousand hectares of land", and after finally hatching a super Internet celebrity, the honeymoon period of both parties may be over. The agency wants to get rewards from the Internet celebrity, while the Internet celebrity thinks that he is popular because of his ability and hopes to get more benefits, so the conflict between the two sides is inevitable. There have been many such stories before, the most typical of which is the "fight to the death" and "chicken flying eggs" between Li Ziqi and the MCN agency.

This is an inherent risk of the special business model of influencers: fans are highly bound to influencers, recognizing individual IPs rather than institutions. It is difficult for influencers incubated by institutions to become real company "assets". Live streaming has further highlighted the role of fans, who have changed from passive media information receivers to active screeners and "agenda" setters. They reversely guide idols and the institutions behind them by following, leaving messages, commenting, consuming, stepping on them, and "joining friendly businesses".

After the "perfect breakup", Dongfang Zhenxuan lost its biggest IP for bringing goods, and it is inevitable to be "revalued" in the capital market, especially after the overall adjustment of the education and training industry. Where will New Oriental go in the future when it transforms again? The uncertainty and operating risks are strengthened.

On the other hand, after Dong Yuhui "goes solo", he will face greater challenges in maintaining his personal IP, maintaining relationships with fans, and especially in quality control and logistics management of goods. We also have to consider that Dong Yuhui himself is a bookworm, and often behaves inconsistently with his de facto "Internet celebrity" identity, such as clearing his Weibo account. Can he run a large business for a long time? How long can Dong Yuhui's "mother-in-law fans" continue to be fans? These still need to stand the test of time.

“The general trend of the world is that things that come together for a long time will eventually separate, and things that separate for a long time will eventually come together.” From the popularity of Dong Yuhui’s alternative sales model of teaching English while selling products, to Sun Dongxu being removed from the CEO position of Oriental Selection at the end of last year, to now that Dong Yuhui and Oriental Selection have completely broken up, it makes people sigh at the changing situation in the business world. I hope that all the protagonists can continue to perform the wonderful “Chinese Internet Heroes” for everyone.

"Look up to the sky and laugh loudly, I am not a weed man" is perhaps the line of poetry that Dong Yuhui wants to recite the most. I wish Teacher Dong good luck, and I also wish Teacher Yu good luck.

Senior Editor of this Issue Zhou Yuhua