2024-07-28
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Author: Tuan Tuan
Source: Zhenghedao (ID: zhenghedao)
On the evening of July 25, Dong Yuhui and Oriental Selection finally officially announced their "breakup".
First, Oriental Selection issued an announcement. According to the announcement, from now on, Oriental Selection’s wholly-owned subsidiary Yuhui Tongxing will officially separate from Oriental Selection, and Dong Yuhui will personally hold 100% of its shares. The purchase price is 76.58 million.
Yu Minhong then published an "Open Letter to Shareholders of Oriental Selection" (hereinafter referred to as the "Open Letter"), which provided further details and added a statement at the bottom of the article:
I arranged the money for Yuhui to purchase the company, and the company was given to Yuhui.
Dong Yuhui also published a long article on the social platform "A Letter to All Friends", stating that after friendly consultation and unanimous decision of both parties, Youhui Xingxing will operate independently, and thanked Yu Minhong and Oriental Selection for their support.
For a time, various discussion opinions appeared on the Internet.
Some people think that Dong Yuhui's resignation is inevitable, it is just a matter of time. This is the contradiction between the top streamers and the troupe owner in the opera troupe, and it is also the inherent drawback of the anchors and live broadcast e-commerce companies.
Some people also think that Yu Minhong is generous and it is not easy for him to "break up" in a relatively gentle way under such circumstances.
Although this "breakup" was decent, it was the beginning of a test for both parties.
Just today, the first trading day after Dong Yuhui officially left, the share price of Oriental Selection plummeted by more than 20%, and finally closed down 23.39%. It fell below HK$10, setting a new low in this round of adjustments.
Will users and investors still pay for Dongfangxuan, which is good at operations and supply chain, without Dong Yuhui and the traffic of Huixingxing? Or can it maintain its current stock price and valuation?
Dong Yuhui and Yuhui Xingxing have left the protection of Yu Minhong and New Oriental. Can Dong Yuhui, who has a strong sense of "literati", adapt to the new role and deal with the cruelty of the business world independently? What is the future path of Yuhui Xingxing?
1. Was Dong Yuhui’s resignation “long-planned”?
The unbinding of top anchors from institutions and platforms is often accompanied by a long period of tug-of-war and confrontation, such as Wei Nian and Li Ziqi, Kuaishou and Simba. But looking at Dong Yuhui and Dongfang Zhenxuan, the breakup between the two parties can be described as "decent".
Judging from the clues in recent months, this "breakup" actually went through months of preparation and tug-of-war, and it was an inevitable outcome. On July 21, Dong Yuhui's team withdrew from the New Oriental building where Dongfang Zhenxuan was located and moved into the new work area of the Internet Finance Center to start broadcasting.
Yu Minhong attributed the reason for the "breakup" to the power of public opinion. He wrote in an open letter:"What's complicated is that as a company based on the Internet, public opinion often affects the company's development. Although there has been no obstacle in the communication between Yuhui and me, the complex public opinion disputes, coupled with the guidance and rumors of a few forces with ulterior motives, directly led to the estrangement between Dongfang Selection and Yuhui Xingxing."
Dong Yuhui is no longer just a live-streaming anchor who sells goods, but a phenomenal IP.
Since Dong Yuhui became popular, Dongfang Zhenxuan has been involved in the whirlpool of public opinion many times, and the stock price of Dongfang Zhenxuan has been like a roller coaster. The most representative one was the Dongfang Zhenxuan essay incident in December last year, when the stock price of Dongfang Zhenxuan evaporated 4 billion overnight.
"Dong Yuhui" is seen as the representative of millions of "working people". Because of the struggle for interests and power, people project their feelings of "being wronged" onto him. Dong Yuhui has evolved into a "collection" of public emotional values.
Whether Dong Yuhui was willing or not, public opinion eventually pushed him to the position of senior partner of Oriental Selection, and Yu Minhong created an independent studio "Walking with Hui" for him to explore new business.
Unknowingly, Dong Yuhui seems to have become the biggest variable in Oriental Selection.
Everything seems fine, but the war of public opinion has never stopped.
When Dong Yuhui completed his identity transformation from a representative of "working people" to a manager, Dong Yuhui himself also suffered the backlash of traffic.
In early February, #董宇辉三拒請解释整裤# topped the Weibo hot search list. Afterwards, Dong Yuhui cleared all the Weibo content, causing the stock price to fall as soon as it opened.
Dong Yuhui once admitted in a program that he was tired of and dissatisfied with his career as a host. He said that his sleeping conditions were very bad and he had always resisted the job of live streaming and selling goods in his heart, "I still don't enjoy this job to this day."
As a phenomenal anchor, Dong Yuhui has a significant driving effect on the sales of "Traveling with Hui". GMV will skyrocket during the time periods when he appears.
The actual situation is that since Dong Yuhui took independent charge of the "Walk with Hui" live broadcast room, the frequency of his personal live broadcasts has been decreasing. During the "618" promotion period from June 3 to 9, Dong Yuhui only arranged three live broadcasts.
Dong Yuhui’s importance to Oriental Selection is self-evident. His “spontaneous” behavior and his desire to “back down” have stirred up a new round of public opinion crisis.
Yu Minhong, who has experienced many ups and downs, has also had his image stigmatized.
In early June, Yu Minhong, who had not been seen for a long time, appeared in the live broadcast room of Wumart founder Zhang Wenzhong.He admitted that the number of times he had been abused, accused and insulted online this year was more than in his 100 lifetimes.In the future I will stay away from business. I don’t like to work hard in business. When I am happy, I will take my netizens to travel.
As soon as this statement was made, the share price of Oriental Selection plummeted by nearly 10%, and its market value shrank to HK$17 billion, forcing Yu Minhong to make a public apology.
Naturally, Yu Minhong’s shareholders do not want to see, nor can they tolerate, public opinion repeatedly going off track.
2. Yu Minhong’s Choice
In addition to the power of public opinion, another important reason for Dong Yuhui's departure was the business model of Oriental Selection.
From the perspective of the capital market, the game between the company and its super employees still troubles Oriental Selection.
Generally speaking, super anchors have extremely high voice internally and extremely high attention externally. Their every word and action is under the spotlight and infinitely magnified by the public opinion field.
As one of the top anchors of DunDun Oriental Selection, he once expressed his dissatisfaction with the company during a live broadcast, such as the company not communicating with the anchors in advance; the public relations department not taking action when there was public opinion on the Internet; psychological depression, etc. There is no doubt that Oriental Selection has been pushed to the forefront again, and the problems of its internal management have also been exposed.
Because of the influence of super anchors, after the Xiaowenshuo incident, voices of "de-Dong Yuhui" have been heard. It is not just Dongfangzhenxuan. Since this year, the "de-super anchor" has become popular among the top live broadcast e-commerce companies. Xiao Yangge, Li Jiaqi and others have intentionally reduced their broadcast time during the 618 period this year.
For Dong Yuhui, leaving his job may have more advantages than disadvantages.
As a company that has emerged from the live streaming e-commerce boom, Dongfang Zhenxuan has a clear positioning. In its annual report for fiscal year 2023, Dongfang Zhenxuan clearly positioned itself as "an excellent product and technology company with self-operated agricultural products as its core products."
In the open letter, Yu Minhong said: "Selecting good products for the Chinese people is our unchanging purpose. I believe that our self-operated product system and membership system will get better and better." This sentence hides the business model of Oriental Selection.
After the rise of live streaming e-commerce business, Oriental Selection began to benchmark membership stores such as Sam's Club and Costco, building shelf e-commerce and establishing a membership fee system on the one hand, and creating its own product system on the other.
In July 2023, Oriental Selection started live streaming on its own App for the first time; three months later, Oriental Selection launched a paid membership for 199 yuan. Users who purchase a membership can enjoy benefits such as 12% off on hundreds of self-operated products and 66 yuan coupon packages.
At the same time, Oriental Selection has been working hard to build its own brand since it launched its first self-operated product in April 2022. The latest data shows that in the second half of fiscal year 2024 (December 2023 to May 2024), the GMV of Oriental Selection's self-operated products exceeded 3.6 billion yuan, a year-on-year increase of 108%; the total number of self-operated products exceeded 400, and 260 were on sale during the same period.
"Our self-operated products are our battlefield. I have confidence in training our team on the battlefield and turning this team into a team that can fight, work hard, fight tough battles and produce high-quality products... I hope that everyone can give me and our team more patience and encouragement. I believe that we are not people who eat for free. I believe that all of us are filled with the flame of creating a sense of achievement in our careers. I also believe that my experience over the past 30 years will enable me to lead the team to develop the Oriental Selection, a service business for the general public, step by step, slowly and steadily."
Between the internet celebrity model and the product route, Oriental Selection has already made a choice and firmly chosen the product route. In various external statements, Oriental Selection rarely mentions traffic, IP and internet celebrities.
This business model also determines that in future development, Oriental Selection may further weaken the voice of the anchors, and Dong Yuhui’s departure may be inevitable.
Partners of Duojing Capital believe that Dong Yuhui's complete departure may be a good thing for Dongfang Zhenxuan and New Oriental. With this change, both parties have started afresh, which may be a more favorable choice for the long-term development of the two companies. At this stage and in the next stage, Dongfang Zhenxuan should think more about how to make the business last longer when the platform traffic has bottomed out and super IPs are no longer available.
3. Dong Yuhui "resigned" and went solo.Just a beginning
The next path for Oriental Selection will still require continuous thinking and exploration by Yu Minhong and the management team of Oriental Selection.
Similarly, for Dong Yuhui,After leaving the protection of the port, Hui and I have to sail independently to the vast sea.
Many people may still be immersed in their fantasies and blessings for the future development of Dong Yuhui and Yuhui Xingxing, but in fact, the independence of Yuhui Xingxing is not the final chapter of a happy story, but the beginning of an unpredictable future.
After bidding farewell to Yu Minhong and Oriental Selection, Dong Yuhui and his colleagues will also face new and greater challenges:
1. The transformation from a “worker” and manager to an entrepreneur
It must be admitted that after leaving Oriental Selection, Yuhui Xingxing will become a completely independent MCN agency, and Dong Yuhui will also add the word "original" to all his past identities.
From now on, Dong Yuhui’s only identity is the chairman and founder of Huixingxing, and he holds 100% of the shares.
This also means that Dong Yuhui must completely transform himself from the mentality of a "worker" and manager to that of an entrepreneur.
On the one hand, compared with other entrepreneurs, Dong Yuhui's next start can undoubtedly be called a"Auspicious Start"
first,Its own status as a super anchor,Just like Li Jiaqi, Xiao Yangge, and Luo Yonghao, one person is worth thousands of troops, and can continuously supply ammunition and artillery fire for the development of Huixingxing, especially in the early stages of development of a startup company. This may leave behind 90% of entrepreneurs and businessmen.
Secondly, in Yu Minhong's "Open Letter", we can see that the 76.58 million yuan that needs to be paid to Oriental Selection has been arranged by Yu Minhong, which is equivalent to giving the company to Dong Yuhui for free, and all the profits earned by Hui Tongxing since its establishment (as of now, the net profit is about 141 million yuan) are left to Dong Yuhui, and Oriental Selection has not taken a penny.
In addition, Yu Minhong also provided Dong Yuhui with the information system independently developed by Oriental Selection for free, and expressed that he would continue to support the development of Yuhui in the future.
This is equivalent to the following development.In terms of cash flow, organizational structure and management, Yuhui Tongxing is currently operating smoothly and orderly.
But on the other hand, success or failure is due to Xiao He. The above-mentioned are the advantages of Dong Yuhui and his peers, which may also turn into disadvantages of Dong Yuhui and his peers.
Just like a child carrying red gold walking in a busy street, how can he not be noticed?
The problem with Dong Yuhui is that as a super anchor in the past, his abilities and qualities were recognized by the market and the public. However, we can see that whether it was in the early days of Oriental Selection or the development of Tongxing with Hui, apart from the side shown to the public,The various tasks behind the scenes are still supported by Oriental Selection or follow the management experience of Oriental Selection.
In his "Open Letter", Yu Minhong recalled the establishment process of Huixingxing, which actually reflects this point:
In order to ensure that Yuhui Tongxing could carry out its work in a timely manner, under my coordination, we quickly completed the registration of Yuhui Tongxing Company. It took only a few days to free up more than 1,000 square meters of office space for Yuhui Tongxing, reorganized a mature team of about 60 people, and provided a sales system, pallet supply and a large amount of equipment and facilities support.
This also means that when Dong Yuhui truly became the chairman and founder of a company from a super anchor, many issues that he did not need to consider in the past needed to be put on the table.
For example, where will the core management or corporate partners of Yuhuixingxing be found in the future? The company is currently 100% owned by Dong Yuhui, but how should the equity structure of Yuhuixingxing be designed as the company develops in the future? What kind of relationship should the other anchors of Yuhuixingxing have with Yuhuixingxing and Dong Yuhui in the future... These questions need to be considered.
Moreover, compared with Li Jiaqi and MeiOne, Xiao Yangge and Three Sheep, Luo Yonghao and Make Friends, Yuhuixingxing, as a company born out of Oriental Selection, naturally has many shortcomings in the early development process from 0 to 1.
Zhang Ruimin once summarized entrepreneurship as follows: "Starting a business is like jumping off a cliff. Before landing, you have to assemble a plane and fly it to take off."
Dong Yuhui now has the engine and aircraft drawings, but whether he can actually assemble the aircraft and let it soar into the sky after falling to the bottom still requires the efforts of Yuhui and his colleagues.
2. Rethinking the business model of Yuhuixingxing
As we asked earlier about the direction of Oriental Selection, what is behind the direction of Oriental Selection?The departure of Dong Yuhui, the super IP, in a sense tore open the "fig leaf" that Oriental Selection had previously woven:
That is, the stories that Oriental Selection had previously talked about, such as creating independent APPs, self-operated e-commerce, and cultural tourism, are the logic of these stories still valid?
This will determine whether the capital market's valuation logic for Oriental Selection is based on the model and prospects of MCN agencies.
As for Yuhuixingxing, like Oriental Selection, it needs to rethink its future business model.
However, the difference is that the problems faced by Hui Xingxing are very different from those faced by Dongfang Selection.
If you have carefully observed and compared the live broadcast rooms of Yuhui Tongxing and Dongfang Zhenxuan before, you will find that except for the fact that Dongfang Zhenxuan’s own products are not sold, most of Yuhui Tongxing’s other products overlap with Dongfang Zhenxuan.
And we can also see in the open letter that in addition to the supply chain, many of Huitongxing’s government resources and customer resources actually come from Yu Minhong and Oriental Selection, and this is another shortcoming faced by Huitongxing.
Although Lao Yu said that he would not stop supporting Yuhui Tongxing just because Yuhui Tongxing will become independent in the future.
But it must be said that friendship is friendship, especially after becoming completely independent from Hui Tongxing, whether with Yu Minhong or with Dongfang Zhenxuan, they have gone from being two brothers in the womb to rivals who had a "fleeting romance".
Therefore, for Dong Yuhui and Yuhui Tongxing, another urgent task is to continue to do a good job in the "people" of the "people, goods and places" in the live broadcast supply chain, while also building Yuhui Tongxing's own supply chain system and continuously improving quality control so as not to disappoint the trust of the "mothers-in-law".
3. Dong Yuhui needs to be prepared for more cyberbullying
If the division between Dong Yuhui and Lao Yu and Oriental Selection started with last year's "Small Composition" incident, then Yu Minhong and Oriental Selection also began to suffer the impact of online public opinion from this "Small Composition" incident.
At first, people responded to this incident and its subsequent developments with relatively positive and rational suggestions or criticisms.
But later,As online public opinion spread, emotions began to become extreme. Whether it was Yu Minhong, many people in Oriental Selection, or Dong Yuhui himself, they all inevitably suffered many unprovoked disasters.
As Yu Minhong mentioned in his open letter:
I appeared less frequently in front of the camera of "Traveling with Hui", mainly because once I appeared, I would be attacked intensively; I also did not dare to appear in front of the camera of "Eastern Selection", and once I appeared, I would also be attacked intensively. I was in a dilemma. As the founder of Eastern Selection, it became extremely difficult to support the development of the company.
I have to say here,When most voices on the Internet become an outlet for irrational, negative emotions and the public becomes a "mob," this is the tragedy of our public opinion ecology.
Moreover, we may have to admit that the behavior of many people in the past who used a "magnifying glass" to scrutinize Yu Minhong and Oriental Selection may happen again to Dong Yuhui.
In fact, Dong Yuhui has been attacked many times in the past.
For example, when I said I was under a lot of pressure, many people accused me of being a vested interest, saying that it was easy to talk without any pain; when I said I didn’t want to be an internet celebrity, many netizens jumped out and said that I was taking advantage of the situation...
This was before the "breakup". At that time, the online public opinion was more directed at Dongfang Zhenxuan and Yu Minhong, and more positive public opinion was directed at Yuhui Tongxing and Yuhui. An ingenious binary opposition discourse system was formed behind this, and this narrative logic is the most easily accepted by the public.
And after the "breakup", it means the collapse of the old binary opposition discourse system. Yu Minhong and Oriental Selection are Yu Minhong and Oriental Selection, and Dong Yuhui and Yuhui Xingxing can only be Dong Yuhui and Yuhui Xingxing.
Next, the public will regard Dong Yuhui and his companions as a complete entity and re-establish a binary oppositional discourse system.
Yesterday and today we saw Dong Yuhui resign and after Yuhui Xingxing became independent, a large number of netizens offered their praises and blessings in the live broadcast rooms of Yuhui Xingxing and Oriental Selection.
However, in the future, if his slip of the tongue causes a public opinion storm, these praises and blessings may turn into accusations and criticisms. Dong Yuhui needs to be more mentally prepared for this.
at last,No matter what the future holds, I would like to sincerely wish Lao Yu and Yu Hui:
Once you were comrades who fought side by side, and drank wine, ate meat, and sang together under the starry sky. Now you are parting ways, but this separation is destined not to be the end of the story, but the beginning of a story. There will be infinite excitement and possibilities in the future.
bless all of you,I wish you will be happier, more free and less concerned about worldly opinions in the future.
References: [1]. “After splitting up, Dong Yuhui earned 140 million yuan. Is he freer?” New Weekly
[2] “Eastern Selection’s “Fast Strategy”: Are the Internet Celebrity Model and Product Route Really Incompatible?” Titanium Media APP
typesetting| Mi Xiaobai | ZhengfengRotationEditor-in-Chief| Xia Kun
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