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text/dou wenxue

editor/midnight

oriental selection and yuhui xingxing have been "broken up" for many days, but public opinion has not subsided.

recently, oriental selection issued two rumor-refuting announcements in a row to clarify and explain rumors such as "oriental selection organized malicious attacks on dong yuhui and yuhui tongxing", "yu minhong cashed out 800 million yuan", and "dong yuhui blocked boss yu's financial path".

yu minhong also followed up with a statement in his official account as an individual, responding to the comments that "yu minhong has an investment relationship with phoenix finance" and "dong yuhui was banned from speaking." he called on netizens to focus on their favorite anchors and platforms and not believe or spread rumors.

on the other hand, dong yuhui was also constantly questioned. he began to explore the direction of interview-style live broadcasts, and was accused of showing too much of himself in the interviews and ignoring the feelings of the interviewees. in a conversation with the famous writer li juan, he was questioned as a "fake intellectual".

this may be an outcome that neither party expected. traffic is beneficial to their business, but negative effects also come with it.

in fact, yu minhong has long been unwilling to be involved in public opinion. he "gifted" he hui xing tong to dong yuhui, perhaps to convey to the outside world that he "did not want to treat dong yuhui unfairly", and at the same time to end the situation of "being bundled on the hot search".

but things always go against one's wishes. he and dong yuhui are always tied together by public opinion, and a word he says inadvertently may trigger a lot of discussion and speculation on the internet.

yu minhong previously live-streamed with dong yuhui. image source: dongfangxuan official website

in fact, there is no need for both sides to continue "keeping an eye" on each other.

according to the latest 2024 fiscal year report released by oriental selection, the company's total revenue, net profit, gmv and other data have all recorded increases. the company's self-operated business has steadily improved, and it is also working on promoting its own app.

yuhuixingxing also had a smooth start. according to sales data, yuhuixingxing's sales reached about 700 million yuan in 30 days after its independence, and the start of its business was very stable.

both parties are ready to move forward, but as leading organizations in live streaming e-commerce, it is inevitable that they will be under attention. both parties may still have to go through a period of being discussed and misunderstood.

the tree wants to be still but the wind does not stop, yu minhong is still "debunking rumors"

judging from the contents of the two announcements, most of the rumors are based on "clues" to "analyze" the real reason why dong yuhui left and what the relationship between the two parties was like after the breakup.

some people who questioned the viewpoint said that there was a government auxiliary income of 53.99 million yuan in the financial report of oriental selection. they believed that this amount showed that oriental selection would charge local governments for publicity fees, while yuhui’s peers provided free publicity, and thus inferred that "dong yuhui blocked boss yu’s financial path."

in response, dongfang zhenxuan clarified that the government auxiliary income disclosed in the financial report is a legal and compliant tax subsidy, which also includes the relevant subsidies applied for by "walking with hui", and these subsidies have been deposited into the account of "walking with hui". the company has never charged "publicity fees" or "slot fees" to local governments, any enterprises or businesses for the live broadcast special events held in various places.

there are also opinions that after the two parties "broke up", oriental selection spent a lot of manpower and financial resources to discredit dong yuhui; dong yuhui used the reward money to acquire "yuhui tongxing", and he had to pay 6 million to buy the company; dong yuhui's popularity prompted oriental selection to achieve a rise in stock prices, and yu minhong has cashed out 800 million at a high price.

in response to these remarks, oriental selection has clarified each one, stating that oriental selection has never organized or participated in attacks and comments against dong yuhui and yuhui tongxing; all the funds used by dong yuhui to acquire the "yuhui tongxing" company were in addition to all his rewards; since oriental selection went public, yu minhong has never personally cashed out his stocks and has been increasing his holdings.

oriental selection issued two rumor-refuting announcements.

image source: oriental selection official wechat public account

on august 27, yu minhong also explained some of the comments on his public account, lao yu xianhua.

since there were rumors that phoenix finance and yu minhong had an investment relationship, and phoenix finance had published news that "dong yuhui and li juan's interview was suspected to be out of sync", yu minhong first clarified his relationship with "phoenix finance", saying that he had no relationship with "phoenix finance".

in addition, he said that the opinions expressed by some former new oriental employees on yuhui tongxing and dong yuhui had nothing to do with him; he and dong yuhui could freely respond, complain, sue or call the police regarding false information and rumors, and these were not subject to confidentiality clauses.

in addition to the announcement, yu minhong has also been responding to rumors.

on the morning of september 1, zhou hongyi, founder and chairman of 360 group, released a video of a conversation with yu minhong. he said that he wanted to comfort yu minhong for the online violence he had suffered some time ago, but he did not expect that yu minhong was in better condition than himself. he asked yu minhong how he maintained this mentality.

in response to this, yu minhong said that he also cared, but he still had to focus on what he wanted to do. he also said that what he was focused on was doing a good job at new oriental and oriental selection, and taking care of his personal life.

in fact, since the "dong yuhui's short essay" incident, yu minhong has been caught in a whirlpool of public opinion.

as early as may this year, in a live broadcast exchange with wumart group founder zhang wen zhong, yu minhong said that in the past year, he had been abused, accused and insulted on the internet more times than ever before.

at that time, his words "oriental selection is in a mess now, and i have no ability to give you any suggestions" became a hot search and sparked widespread discussion.

in his open letter when he "broke up" with dong yuhui, yu minhong also stated the impact of public opinion on himself, dong yuhui and the two companies, and his words revealed his helplessness about the matter.

he said that although there had been no obstacles in communication between him and dong yuhui so far, the complex public opinion disputes and the guidance and rumors of a few forces with ulterior motives directly led to the estrangement between dongfang zhenxuan and yuhui tongxing, resulting in huge uncertainty in the development of both companies, stock price fluctuations, and a decline in the company's credibility and reputation.

yu minhong also began to be afraid to appear in front of the cameras of "eastern selection" and "with hui", to avoid being caught up in public discussion again.

but public opinion did not "let go" of yu minhong. in the end, after dongfangxuan and dong yuhui could no longer work together, he made a decision.in addition to handing over the company, it will also leave all the income, including all profits, obtained by yuhui tongxing since its establishment to dong yuhui and yuhui tongxing.

image source: lao yu xian hua wechat public account

judging from this move, yu minhong may also want to end this state of endless public attention. at present, he just wants to do things quietly and is unlikely to launch public opinion attacks on dong yuhui again.

amid doubts, how can oriental selection continue to move forward?

not long ago, oriental selection just released its performance report for fiscal year 2024 (june 1, 2023 to may 31, 2024).

the report devotes a lot of space to yu hui, mainly listing the details of the expenses paid by oriental selection for him, which means that the money that yu minhong once promised to give to dong yuhui has been fully fulfilled.

dongfang zhenxuan’s 2024 fiscal year financial report contains content related to walking with hui.

image source: oriental selection official website

the financial report shows that from december 22, 2023 to june 30, 2024, the unaudited pre-tax profit of yuhui xingxing was 186 million yuan and the net profit was 141 million yuan. among them, 129 million yuan was allocated to dong yuhui, and the remaining 12 million yuan was retained by yuhui xingxing.

yu minhong revealed at the communication meeting that the original 50% of the profit of 141 million yuan had been paid to dong yuhui, and the 141 million yuan disclosed in the financial report was the remaining part, which was also rewarded to dong yuhui.

the financial report also revealed that the purchase amount of yuhui tongxing company was 76.58 million yuan. previously, yu minhong had promised that he would also arrange the money for dong yuhui to purchase the company, and the company was given to dong yuhui.

based on the above amounts, yu minhong paid a total of more than 358 million yuan in "breakup fees".

judging from the report of oriental selection for the fiscal year 2024, the company's overall condition is not bad.

from june 1, 2023 to may 31, 2024, oriental selection's total revenue was approximately rmb 7.073 billion, a year-on-year increase of 56.82%. among them, the total revenue of continuing operations after the sale of the education business was rmb 26.5 billion, a year-on-year increase of 68.1%.

financial summary of oriental selection for fiscal year 2024, source: oriental selection official website

the financial report shows that the growth was mainly due to the multi-platform strategy of douyin, taobao and its own applications, diversified product categories and skus, and the member day promotion launched since december 2023.

in terms of gmv, oriental selection’s gmv in fiscal year 2024 was 14.3 billion yuan, a year-on-year increase of 43%.

among them, gmv from douyin accounted for the majority. during the reporting period, the total number of paid orders for third-party products and self-operated products on douyin increased from 136 million in fiscal year 2023 to 181 million.

at the same time, the remuneration of oriental selection employees has also increased. with the total number of employees decreasing, the total salary expenses of oriental selection (including share-based compensation expenses) reached 1.4 billion yuan, an increase of 94.1% year-on-year from 736 million yuan in fiscal 2023.

recently, oriental selection has also increased its investment in the upstream supply chain, invested in a sausage factory, and strengthened the management of the upstream supply chain.

at present, oriental selection is also facing some challenges.

although according to the report, oriental selection's adjusted net profit was 2.181 billion yuan, more than doubling year-on-year, oriental selection sold its education business in december 2023, with an after-tax disposal gain of 1.3 billion yuan, which was also included in the 2024 fiscal year financial report.

in addition, the revenue of oriental selection's self-operated products and live e-commerce business was 6.5 billion yuan, a year-on-year increase of 68.1%, but the revenue cost growth rate was even higher, at 4.8 billion yuan, doubling from the same period last year, and the gross profit margin was 25.9%, a decrease of 12.3 percentage points from the same period last year.

combined with sales and marketing expenses of 870 million yuan, a year-on-year increase of 174.5%, the adjusted net profit of self-operated products and live-streaming e-commerce showed negative growth, reaching 710 million yuan, a year-on-year decrease of 22.83%.

in addition, for oriental selection, the divestiture of youhui tongxing also means the divestiture of a very profitable business, which will definitely have an impact on the company's performance and stock price.

bocom international securities released a research report saying that considering the impact of the sale of yuhui tongxing and the reduction of brand day activities, it lowered the gmv, revenue and profit forecasts of oriental selection in fiscal year 2025 to 43%, 19% and 33%, and switched the valuation to fiscal year 2025. the target price was lowered from hk$13.4 to hk$8.5, corresponding to a price-to-earnings ratio of 15 times. the company is still in the adjustment stage and remains neutral.

therefore, oriental selection, which is still under doubts, needs to start again, successfully pass the adjustment period, and prove itself again.

forgetting each other in the world may be the best ending

throughout the whole process, dong yuhui was probably unwilling to be swayed by public opinion.

not only yu minhong, dong yuhui has also publicly expressed his helplessness about the huge traffic. for example, dong yuhui once said on a show that he was very resistant to selling things and that his sleep quality was particularly poor in the past two years, "i have to take many sleeping pills every day."

he also said that his parents who lived in his hometown were often harassed by suppliers. "strangers visited our home every day and the door was often closed."

after independence, people had higher expectations of dong yuhui, which made dong yuhui's small mistakes infinitely magnified.

recently, a live broadcast of a conversation between dong yuhui and writer li juan has again caused him to be embroiled in the controversy of "fake cultural figure meeting real cultural figure".

screenshot of the live conversation between dong yuhui and li juan.

image source: yuhuixingxing douyin official live broadcast account

during the conversation, perhaps because the content prepared by li juan was different from dong yuhui's questions, there were often pauses between the two people's conversations; dong yuhui used a long parallel sentence to praise li juan, and li juan responded with "thank you, this is really a huge compliment"; in the second half of the conversation, li juan repeatedly asked if it was over, and dong yuhui continued the conversation in various ways.

some people commented that the conversation between the two was a "live broadcast failure". most of the questions raised by dong yuhui made li juan feel stunned and nervous, but they did not play a good guiding role. dong yuhui's words of comfort during the live broadcast were also considered unnecessary.

after the incident fermented, li juan subsequently issued an apology, explaining that "a lump" was a measure word she often used, and praised dong yuhui as "a young man who is contagious and friendly, always taking care of others, and leaving a good impression." she was anxious and nervous before the live broadcast and was in a bad state.

dong yuhui's every word and action will be magnified, which may be something he must face as a top anchor.

from the beginning of yuhuixingxing, we can see how strong its appeal is now. data shows that from july 25 to august 25, yuhuixingxing's sales in 30 days reached about 700 million yuan, with an average daily sales of about 23 million yuan.

at the same time, the number of fans of yuhuixingxing douyin account increased by more than 1.3 million, and has now exceeded 23 million.

although the above-mentioned conversation with li juan was called a live broadcast failure, the traffic was successfully converted into sales. during the nearly two-hour interview, without introducing any books, li juan's works sold more than 200,000 copies, and the maximum number of online users exceeded 400,000.

dong yuhui no longer needs oriental selection, and yu minhong and oriental selection must also adapt to the days without big anchors.

at present, yu minhong has begun to focus on leading oriental selection to explore new models.

in 2023, dongfang zhenxuan launched its own app. nearly 90% of its self-operated new products will be launched on the app first. the gmv of self-operated products on the app has accounted for more than 40% of the gmv of the entire network. the 2024 fiscal year financial report shows that dongfang zhenxuan's own app has also become the core channel for self-operated products.

image source: oriental selection official website

oriental selection also mentioned that in fiscal year 2025, the company will launch the promotion of its own offline products, taking advantage of new oriental's many outlets, wide distribution, large traffic, and high customer stickiness, and carry out extensive offline strategic cooperation with new oriental. by increasing offline product promotion video advertising space and smart vending machines and other channels, the exposure of oriental selection's own products and the oriental selection app will be increased.

this promotion model will also be launched on a pilot basis in beijing in the second half of 2024, and will gradually radiate to the whole country in the future.

some commentators believe that yu minhong is trying to make oriental selection an "online version of sam's club."

according to e company, industry insiders said that oriental selection's online sam's club strategy is a manifestation of its attempt to create an online version of sam's club. by deepening its own brand, promoting a multi-platform matrix and developing offline channels, oriental selection is trying to control the initiative of products and channels. although the implementation of this strategy has led to a decline in gross profit margin, it has also brought strong growth in gmv and total revenue.

yu minhong also stated at the oriental selection shareholder communication meeting that the company will do its best to train anchors and improve their treatment, but will absolutely not allow anchors to set up personal platforms like dong yuhui. this phenomenon will be avoided and eliminated.

under such circumstances, it also means that yu minhong and dongfang zhenxuan have entered a new period of development and change. dongfang zhenxuan needs to calm down and seek new paths, and dong yuhui needs to calm down and maintain steady growth. forgetting each other in the arena is probably the best outcome for both parties.

(the header image of this article comes from the official website of dongfang zhenxuan and the official video account of yuhui xingxing.)