2024-07-31
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Although it was not surprising, Oriental Selection still dropped a bombshell on the Internet last Thursday, and the accompanying fire clouds lasted for an entire weekend.
On July 25, Oriental Selection released an announcement stating that Dong Yuhui himself will acquire Yuhui Tongxing in full, which means that Dong Yuhui and Oriental Selection will be completely separated commercially from now on.
Yu Minhong published a more detailed open letter in "Old Yu's Chat", stating that "the company is a gift to Yuhui", and that he paid 76.585 million yuan for the acquisition of Dong Yuhui, and also transferred all the dividends and rewards that Dong Yuhui had previously received from Yuhui Tongxing, totaling 282 million yuan, to Yuhui Tongxing. At the close of Hong Kong stocks on July 26, Oriental Selection fell 23.39% in total. At the opening of today's trading, the stock price rebounded slightly, and once rose by more than 8% at the beginning of the trading.
Two years, a series of controversies and public opinion storms have made this ending seem to have been predetermined. After the "Little Composition" incident fermented, Yu Minhong chose Dong Yuhui over Sun Dongxu, and from today's perspective, no matter what choice Yu Minhong made at that time, it might have been wrong. Yu Minhong, who turned around again, still maintained his dignity, and the distribution issue that the "mothers-in-law" were concerned about was properly arranged.
After some hesitation, Yu Minhong finally determined the development direction of Oriental Selection, which was to refuse to become an MCN company and focus more on products, although the cost was to divest the company's most valuable asset; Dong Yuhui also got the opportunity to control his own destiny, although it meant starting over and the role transformation and adjustment would be long and difficult.
No one knows for sure whether a teacher can be a good entrepreneur; but an old man who is regarded as an entrepreneurial legend of the previous generation has indeed been troubled by the new business logic and has never been able to break through the knot in his heart, so he had no choice but to take drastic measures.
Looking back at the past two years, it was like a dream bubble for both Dong Yuhui and Yu Minhong. An unexpected success forever changed the trajectory of Dong Yuhui's life, and also allowed Yu Minhong and Dongfang Zhenxuan, who were already on the edge of the cliff, to regain their momentum. Two years later, fate took another turn, but this time the story came to an end, and the two people each headed for an unknown tomorrow.
Similar to Yu Minhong, Dong Yuhui was also shrouded in inferiority, "I was born in the countryside, I am short, and my head is big and ugly." When he was studying at Xi'an International Studies University, his teacher introduced him to be a tour guide. One year he explained the Terracotta Warriors 17 times. Later, he laughed at himself in a live broadcast, "I look like the Terracotta Warriors because I have been here 17 times." During his part-time tour guide period, Dong Yuhui rushed back to school in the middle of the night and could not enter the dormitory. On a cold night, Dong Yuhui, who had not eaten for a day, took out the squeezed bread and milk from his schoolbag and shared the food with several wild cats.
In early 2015, Dong Yuhui, who had not yet graduated from his senior year, did not choose a watch company or a car company, but joined Xi'an New Oriental and became a high school English teacher. At that time, Yu Minhong naturally did not know about Dong Yuhui. He was worried about the stagnant online education business. New Oriental Online was founded in 2005 and was one of the earliest online education institutions in China. However, due to the complete copying of offline business and the lack of online and offline synergy, internal business "fighting" occurred. At the same time, due to lack of innovation and slow response, it gradually lost its first-mover advantage.
On the eve of the explosive growth of online education, Yu Minhong chose a conservative business strategy. He once reflected in an interview that he was not brave enough to take risks and would rather have a large amount of cash on hand than try. "For example, if I invested 1 billion yuan, I could take a chance, but if I couldn't make 1 billion yuan, it would all be wasted. I didn't dare to invest and lost other good business opportunities."
In 2019, New Oriental Online successfully went public. The epidemic brought about a surge in online education business, and New Oriental Online's stock price also rose from HK$7.56 to HK$39.35. But the booming market did not last long. The "double reduction" policy was implemented, and the education and training industry fell into a freezing point. Yu Minhong's previous conservatism became a moat. He refunded 20 billion yuan in tuition fees and donated the extra tables and chairs to remote areas.
Netizens praised him for being decent, just like this time.
Yu Minhong, who had no choice but to face the collapse, had to find another way to survive. On November 17, 2021, Yu Minhong took himself as a pioneer and started a live broadcast to sell books and agricultural products. Later, he also brought in New Oriental teachers. At that time, few people were optimistic about New Oriental's transformation. After all, live broadcast e-commerce had gradually become a red ocean at this time, and teachers who were labeled as "engineers of human souls" on weekdays began to sell goods through live broadcasts, which also caused considerable controversy in public opinion.
Oriental Selection Live Room (Source: Xiaohongshu)
Dong Yuhui is one of them, and his live broadcast journey was not smooth at the beginning. He later repeatedly told the story to the public: for a long time, there were only five or six people in the live broadcast room, two of whom were his parents, and the other two were his partner's parents. When the number of viewers improved slightly, all kinds of malicious messages filled the barrage, including but not limited to appearance attacks and criticism of accents. Once Dong Yuhui live broadcasted all night from 1 a.m. to 7 a.m., and he talked about philosophy, art, Mozart and Plato. He finally attracted 1,400 viewers to the live broadcast room, "but I just couldn't sell anything. No one paid attention to me no matter what I said."
He felt unprecedented frustration and depression. Every day when he stood in front of the live broadcast room, he wanted to give up. "I want to give up every day. It would be a lie to say that I don't want to give up. But every day when I wake up, I feel that I should not leave any regrets." After persisting for half a year, a turning point came, and after that, it was out of control.
On June 9, 2022, Dong Yuhui set off a storm on the Internet with the help of a hot search topic "New Oriental's transformation live broadcast room bilingual sales is too popular". The next day, the live broadcast room directly gained 470,000 fans. Less than a week later, the number of fans in the live broadcast room exceeded 10 million. Dong Yuhui was on more than 100 hot searches in a week, and those books and agricultural products that were once ignored were now sold out.
His sentences during the live broadcast were also widely circulated, "When you are memorizing words, cod in Alaska are jumping out of the water; when you are doing math, seagulls in the South Pacific are flying over the coast; when you are studying at night, the polar circles of the earth are colorful. But young man, you have to realize your dreams yourself and see the world yourself. The future is promising, try your best."
"It's New Oriental that is popular, not me." Regarding his popularity, Dong Yuhui repeatedly emphasized to the outside world, "Everyone likes me because they like New Oriental and Teacher Yu Minhong." Yu Minhong sent a private message to Dong Yuhui, "On behalf of New Oriental, I would like to thank you."
However, after overcoming the survival crisis, the problems that were originally hidden underwater gradually surfaced until they were completely detonated by the "small composition" incident - as a "worker", he became the core asset of a company, which made it difficult for him and the company to reach a fully fair and convincing conclusion on the issue of profit distribution. The past narrative of "God rewards hard work" has failed, and "fighting against capitalists" has begun to become the most turbulent and correct public wave since the 1920s, which has left Oriental Selection with no chance of peaceful coexistence.
"Small essay incident"
Under the huge public opinion crisis, Dongfang Zhenxuan established Yuhuixingxing and registered Dong Yuhui as the only executive director and general manager, dividing the two brands into two independent brands for operation. If the two brands can develop together, it is a way out, but things often do not go as planned.
"Faced with the complex external and internal environment, in order to prevent the company's operations from getting into trouble," Yu Minhong revealed in "An Open Letter to Friends and Shareholders of Oriental Selection," "Yu Hui and I met several times in March to discuss the follow-up development plan. After repeated consultations, we finally decided that after the end of the fiscal year (May 31), I would ask the board of directors for approval to transfer 100% of the shares of Yuhui Xingxing to Yu Hui himself."
The reason Yu Minhong gave for the breakup was: not to cause harm to the long-term development of individuals and the company, to ensure that Huixing has a better development stage, and to avoid business conflicts and public opinion disputes.
At a subsequent shareholder exchange meeting, Yu Minhong said that he tried to mediate the issues between the two sides and please fans on both sides. "I often appeared on TV, sometimes on Yuhuixingxing, sometimes on Dongfangzhenxuan, but I didn't keep it even, and in the end, the fire burned on my head."
He said that in the past three months, his image has suffered huge damage due to online violence, with conspiracy, attacks, and abuse of employees. "It seems that I have become the most vicious capitalist and boss in the world. At my age, I don't care about outside comments, but these have indeed affected the company's business development."
In fact, for Yu Minhong, he has never understood the operating logic of the fan economy, nor does he understand the emotional interaction model of fans towards Dong Yuhui. All the shopping consumption brought about by the love for people is understood as the attractiveness of the goods themselves; all the abuse and boycott brought about by the protection of people is understood as "overreaching". Yu Minhong has repeatedly tried to win a reversal of public opinion by complaining on the Internet, but has never succeeded. He even exacerbated the public opinion crisis and drove the stock price down.
From the underlying logic of the business, Oriental Selection has never wanted to become an MCN. The older generation of entrepreneurs such as Yu Minhong always adhere to the materialistic thinking of product first, so they want to rely on self-developed products and supply chains, rather than super anchors. Especially when Dong Yuhui's every word and action will cause a sharp fluctuation in the stock price, after the "small composition incident", the stock price of Oriental Selection fell by more than 25% in four days, and the market value evaporated by about HK$7 billion; not long ago, when Dong Yuhui expressed his boredom with live streaming, the stock price of Oriental Selection fell by more than 10% again during the trading session. Therefore, "de-Dong Yuhuiization" has become a necessity.
However, Dongfang Zhenxuan has not shown the ability to walk independently after "de-Dong Yuhuiization". Although Dongfang Zhenxuan has successively cultivated a number of new anchors such as Lele, Tianquan, Chaofeng, Daqi, Tongtong, Taotao, etc., they have never been able to compare with Dong Yuhui in terms of influence. From January to July this year, the average number of online people in the live broadcast room of Youxinghui was 62,000, while Dongfang Zhenxuan had only 13,000. The outside world constantly compares the number of fans, performance, and online people of the two live broadcast rooms, which also makes the relationship between the two live broadcast rooms awkward. In addition, the war of words between the fans of both sides and Yu Minhong personally has never stopped.
(Photo source: Xiaohongshu@Nimitz)
Yu Minhong did not deny that the two teams did have internal conflicts and were seriously disturbed by the external environment. "The power of the Internet or public opinion has always been around us. Some few people have been fanning the flames, and there are also various interest groups." Between long-term pain and short-term pain, Yu Minhong chose the latter, although the price was high. He also emphasized many times at the shareholder communication meeting that "breaking up" would have huge benefits for the future development of Dongfang Zhenxuan and "Traveling with Hui", "to have an environment that can really develop and build."
But the market response was cold and cruel. When the news came out, the share price of Dongfang Zhenxuan plummeted. A shareholder of Dongfang Zhenxuan said in an interview with the media that the core assets of a listed company were 100% divested at a price far below the market fair value. Yu Minhong emphasized to the public that "I arranged the money for Yuhui to buy the company, and the company is a gift to Yuhui." Then "Do you dare to release the message of small shareholders?"
Dong Yuhui became popular at a rare time—Weiya disappeared, Luo Yonghao quit the Internet, Li Jiaqi stopped broadcasting, and Simba was caught up in a fake goods storm. The four major anchors collectively missed the 2022 618 promotion, and the entire network traffic is looking for a new outlet. Dong Yuhui's intellectual temperament and fluent expression are fresh and unique among the anchors. Even the self-conceit and twists he sometimes reveals in the live broadcast are inadvertently shaping his image.
Dong Yuhui has always refused to accept the label of Internet celebrity defined by the outside world. He believes that Internet celebrities have a sense of responsibility in communication, and he does not think he is qualified to influence other people's values. He admits that he is a salesman, but he actually does not want to be a salesman from the bottom of his heart. Just two months ago, in a variety show, he publicly said, "I am very resistant to selling things. To be honest, I still don't enjoy this job today." In essence, the job he enjoys most is being a teacher.
Now, Dong Yuhui has even become the boss. In a job that he "doesn't enjoy at all", he has to do more decision-making and management work. How to select products, what to sell, and how to obtain better resources have all become issues that Dong Yuhui needs to consider. In the short term, the traffic task of Hui Xingxing is all on him alone. At the same time, he has to take into account team management, training of backup anchors and other matters. The challenges he faces are new and arduous. Dong Yuhui also admitted a while ago that he even had sleep disorders due to too much pressure. He had to take a lot of sleeping pills every day to fall asleep, and "as soon as I opened my eyes, I had to pay the rent and the wages of so many people", which made him feel stressed.
After the separation from Dongfang Zhenxuan, the "imaginary enemy" of Dong Yuhui's fans and "mothers-in-law" has temporarily disappeared. But will there be a new "scarecrow" in the future? Things change rapidly, and the lessons are not far away.
Dong Yuhui did not mention any specific plans in his open letter. He said that in the future, Yuhuixingxing will continue to try content creation and output based on the existing sections, and explore the possibilities of more fields with partners. After Yuhuixingxing was established, it has been involved in e-commerce, culture, tourism and other fields in its account.
However, the soil on which the anchors stand is also quietly changing. Live broadcasts by experts once laid the foundation for Douyin's e-commerce. But as the novelty fades and homogeneity becomes serious, Douyin's e-commerce growth potential has encountered a bottleneck, and transformation is already underway. According to a report by 36Kr Future Consumption, "Douyin is reducing the proportion of traffic allocated to live broadcasts by experts and tilting traffic to high-quality short videos and brand store broadcasts." How to face the new e-commerce ecosystem is also a problem that Dong Yuhui must solve.
Dong Yuhui still has many challenges to face, and he may be getting further and further away from his ideal life of "loving life, reading thousands of books, and seeing the mountains and rivers."
References:
1. DT Business Observation ------ "Understanding from 4 sets of data why Dong Yuhui broke up with Dongfang Zhenxuan"
2. InterfaceX - "The Decision to Break Up: Dong Yuhui and Yu Minhong's Dignified Farewell"
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