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Yuhuixingxing and Dongfangzhenxuan are still connected. On August 7, a Beijing Business Daily reporter learned from some brand owners that Yuhuixingxing had tried to "poach" Dongfangzhenxuan's merchant resources. At the same time, Yuhuixingxing is also recruiting a large number of category operations, anchors and other positions to expand categories such as clothing, beauty, and 3C. Compared with the "old boss", Yuhuixingxing has won traffic, but it is difficult to make up for the supply chain resources in a short period of time. When the two become opponents, "poaching" means are only a temporary measure and difficult to sustain for a long time. If Yuhuixingxing wants to expand its market, it must establish its own differentiated supply chain resource advantages and decide the direction of expanding its categories. Selecting suitable suppliers is a rather tedious and high-investment task, and it is also a long and arduous path.

Digging out resources from the old company

On August 7, a Beijing Business Daily reporter checked the National Enterprise Credit Information Publicity System and found that the legal representative of Yuhui Tongxing (Beijing) Technology Co., Ltd. (hereinafter referred to as "Yuhui Tongxing") is Dong Yuhui. The company was established on December 22, 2023, with a registered capital of 10 million yuan. Prior to this, Dongfang Zhenxuan issued an announcement on the Hong Kong Stock Exchange showing that Dong Yuhui, as the buyer, obtained 100% of the equity of Yuhui Tongxing.

On the surface, Dong Yuhui has fully acquired the controlling stake in Yuhui Tongxing; but in private, it is still difficult for Yuhui Tongxing to quickly separate from Dongfang Zhenxuan, at least not in the short term.

Hu Miao (pseudonym) is the e-commerce channel manager of a food processing company in Guangdong. Since the first half of this year, he has been connecting with Huitongxing Business. Hu Miao has some guesses about the other party's contact with him during that period: It may be that Huitongxing Business saw that the products sold well in the Dongfang Zhenxuan live broadcast room, so they came to him privately. According to him, the business cooperation with Huitongxing follows the cooperation model of Dongfang Zhenxuan. Merchants do not have to pay for the slots, and the commission is paid according to the sales commission.

"After becoming independent, Yuhui Tongxing has become more confident in business." Since the end of July, Hu Miao has clearly felt that the other party's negotiation attitude has become tougher. He is deeply touched by this. On the one hand, it may be that Yuhui Tongxing has the upper hand in popularity and sales in the competition with Dongfang Zhenxuan; on the other hand, Yuhui Tongxing may have felt new pressure in supply chain construction after becoming independent.

July was the time when the relationship between Dongfang Zhenxuan and Yihuixing, and between Yu Minhong and Dong Yuhui, changed substantially. On July 25, Dongfang Zhenxuan issued an announcement on the Hong Kong Stock Exchange, announcing Dong Yuhui's resignation. Dong Yuhui received a "breakup fee" of 358 million yuan, including a share of Yihuixing's profits and funds for the acquisition of Yihuixing's equity. More importantly, as the buyer, Dong Yuhui received 100% of Yihuixing's equity. So far, Dong Yuhui has completely completed the transformation from a super anchor to a boss.

According to third-party statistics tool Xin Dou Data, six days after becoming independent, the Douyin account of Yuhuixingxing has gained 600,000 followers, and the cumulative estimated sales have exceeded 130 million yuan. Dong Yuhui's commercial appeal was evident at the beginning of his account. At the end of last year, Yuhuixingxing went online on Douyin, and after posting pictures and texts, the number of likes quickly exceeded 200,000. In the first half of this year, the official account of Yuhuixingxing has gained 17.39 million followers.

The company is independent, but it seems difficult to be completely independent. At least the products presented in the live broadcast room have not changed significantly. When interviewed by Beijing Business Daily reporters, many suppliers gave similar opinions: Yuhui Tongxing has copied Dongfang Zhenxuan in terms of live broadcast tone and product selection style, and has not been able to highlight the characteristics and labels of Yuhui Tongxing.

"Without its own supply chain, the product selection is not differentiated." In the eyes of Li Jie (pseudonym), the current predicament of Yuhuixingxing is obvious. Li Jie is the head of an agricultural and sideline products company in Beijing and a direct supplier of some live broadcasting organizations. He is always observing the dynamics of cooperation between suppliers in the circle and live broadcasting organizations. He pointed out to the Beijing Business Daily reporter that a large part of the products in Yuhuixingxing's live broadcast room come directly from Douyin's product selection pool.

According to industry insiders, among the three elements of live streaming, namely, people, goods, and venue, the most prominent shortcoming of Yuhuitongxing is the competitiveness in supply. This may also explain why Yuhuitongxing chose to "poach" the product selection supply chain of its old employer: after all, the customer groups of the two live streaming rooms are highly similar, and Yuhuitongxing also saves the complicated product selection process such as product testing and inspection.

The product has no obvious features

Perhaps, Yuhuixing's "poaching" of merchant resources is also a temporary emergency measure. Yuhuixing, which was separated from Dongfang Zhenxuan in a short period of time, found it difficult to quickly replenish merchants and supply chain resources. On the one hand, the core resources are still mainly held by Dongfang Zhenxuan players, and on the other hand, the new team needs a buffer period to start over. The industry once joked that Dongfang Zhenxuan "kept a backup plan". A typical situation is: after Yuhuixing started, the live broadcast room has not been connected to Dongfang Zhenxuan's self-operated products, such as Dongfang Zhenxuan's popular grilled sausages and South American white shrimp.

There is nothing wrong with this approach. After all, product selection is not easy, and products that can become hits are even more scarce resources. Sometimes, traffic and conversions will be achieved wherever the self-operated hit products are sold. Hot products and the product selection capabilities and teams behind them are often considered core resources.

Looking at the development path of Oriental Selection, it can be seen that self-operated brands are an important competitive means for Oriental Selection to take the path of product differentiation. According to the official data released by Oriental Selection, in the second half of fiscal year 2024 (December 2023 to May 2024), the GMV (gross merchandise volume) of Oriental Selection's self-operated products exceeded 3.6 billion yuan, a year-on-year increase of 108% and a month-on-month increase of 74%.

Private brands also bring profit margins. "For a brand or a live broadcast room, self-operated products are the most 'controllable' category." Huang Lei, who was once the general manager of an MCN company, revealed a set of data to the Beijing Business Daily reporter. The gross profit of the self-operated brands developed by the channels of MCN can be about 30% higher than that of the brands. For MCN, the data on self-operated categories in terms of profits and cooperation chains are relatively transparent.

Especially in the current live broadcast environment of homogeneous product selection, private brands are another way for live broadcast organizations to realize their own brands. On the other hand, leading organizations such as Three Sheep and Meiwan have all set foot in private brands in recent years. In January last year, Crazy Xiao Yangge launched its own brand Xiao Yang Zhenxuan, launching a number of popular products such as garbage bags and toast bread. In mid-June this year, Meiwan Youxuan Tmall flagship store was officially launched, and the products will also expand from the main life category to more categories.

Selling out a product well can already make many live broadcast organizations jealous. If the supply chain is completely in the hands of the live broadcast team itself, it means that they can "control" profits, traffic and even pricing power, and will drive other live broadcast organizations and suppliers to imitate, and the traffic snowball will continue to grow.

Some top anchors have also begun to seek brand co-creation with enterprises. Since the layout of self-operated brands in 2017, Xinxuan, led by Simba, has launched a total of 10 self-operated brands. The relevant person in charge of Xinxuan revealed that many self-operated brands such as Jianfeng Foodie will explore more offline layouts in the future. On the other hand, Qianxun, the MCN agency behind Wei Ya, also co-founded Fengweipai with Nicholas Tse. Currently, the brand has entered offline channels such as Hema Fresh and RT-Mart.

Obviously, building supply chain capabilities is a long and investment-intensive process. As of June, the total number of self-operated products of Dongfang Zhenxuan has exceeded 400, of which 80% are agricultural products. "The problem with self-operated products is that the investment cycle is relatively long, and the price advantage is not very obvious when the scale cannot be increased." Huang Lei told the Beijing Business Daily reporter that if Hui Xingxing wants to make efforts in self-operated products, Dong Yuhui's traffic alone is far from enough.

Perhaps Yuhui Tongxing noticed the shortcomings in its supply chain capabilities, or perhaps it sensed the importance of expanding its categories. On August 7, a Beijing Business Daily reporter saw on BOSS Zhipin that Yuhui Tongxing had posted 44 job openings, including live broadcast control, category operation, anchor, legal affairs, etc. Among them, Yuhui Tongxing was recruiting live broadcast agents with a monthly salary of 11,000 to 18,000 yuan, and the products recruited included clothing, beauty and 3C categories.

Aura and experience are not yet equal

Without Dong Yuhui, the traffic star, Dongfang Zhenxuan still has the supply chain accumulation and the resources of New Oriental. When Yuhui Xingxing left Dongfang Zhenxuan, the two sides not only became rivals, but Yuhui Xingxing also had to get used to facing the ever-changing live streaming industry independently. Starting from "zero" and quickly producing pleasing results, the pressure and challenges can be imagined.

"If Dong Yuhui needs to maintain the current traffic and repeat purchases of Huixingxing, the construction of the supply chain is still very important." Zhuang Shuai, an expert in the retail e-commerce industry and founder of Bailian Consulting, told the Beijing Business Daily reporter that Dong Yuhui is likely to build his own supply chain in the future, and choosing suppliers has become particularly important.

Selecting the right supplier is a rather tedious task. Huang Lei gave an example to the Beijing Business Daily reporter, saying that some MCNs would select three suppliers with relatively suitable quality and price from those they are interested in cooperating with, and then discuss the details, from product composition to packaging specifications and production cycle. A series of product details need to be adjusted by both parties.

The reality is: there are a large number of merchants in the same category, but only a few are capable of becoming high-quality suppliers. "After much selection, suppliers will eventually choose the same few. The chances of success for small merchants are not high." Some suppliers in the industry have given the same opinion in interviews on many occasions.

This not only requires Huitongxing to invest sufficient human and material resources to support the construction of the supply chain, but the company also needs to find ways to maximize the user scale behind the traffic, lower costs and negotiate with suppliers. "In the market, there are actually only a few high-quality suppliers of the same category," said Huang Lei.

At the same time, the choice of product category is also very important. For example, many live broadcast organizations have launched their own brands such as grilled sausages and snail noodles, mainly because they value the high recognition of such products in the market, which can effectively reduce the company's trial and error costs. At the beginning of the birth of Yuhui Xingxing, Dong Yuhui once explained his positioning for the new account. He said that Yuhui Xingxing would first stick to agricultural products, while meeting the needs of daily necessities and exploring possibilities in books, culture, and tourism.

"If Dong Yuhui wants to create his own brand based on agricultural products like Dongfang Zhenxuan, then he needs to accept the fact that agricultural products have low profit margins." Huang Lei believes that compared with daily chemical products and other categories, the supply chain of agricultural products is more difficult to "chew". "The transportation conditions of agricultural products are more stringent, the processing chain is longer, and the processing standards are higher, which still places high demands on the team's ability to control the entire chain."

Huang Lei further pointed out that if Huixingxing wants to make a breakthrough in the selection of agricultural products, the best way is to cooperate with Dongfang Zhenxuan. "After all, the live broadcast tone and product selection habits are very similar, and even the users may be the same batch."

Regarding the question of whether Oriental Selection will cooperate with Yuhui Tongxing in product selection system and supply chain in the future, Beijing Business Daily reporters sent interview outlines to Oriental Selection and Yuhui Tongxing respectively, but no reply was received as of press time.

"For Yuhui Xingxing, there is actually a mismatch between the company's halo and actual experience." Zhuang Shuai compared Yuhui Xingxing to the Beijing Business Daily reporter, saying that Yuhui Xingxing is now like a child with a mature appearance. On the surface, it is a company that already has tens of millions of fans and has earned more than 200 million yuan in half a year, but in fact, there are still many things it has not experienced.

Zhuang Shuai said that although Dong Yuhui may have more autonomy after going solo, in the professional fields of live streaming such as product selection, supply chain building, and operations, Dong Yuhui, who has transformed from an anchor to the "head" of the company, seems to need more help to seek breakthroughs in his business.

Beijing Business Daily reporter Qiao Xinyi