A year and a half ago, Yu Minhong led the New Oriental team to "PlayerUnknown's Battlegrounds", once again opening a door for the development of New Oriental.
After experiencing "restarting a business" in his 60s, what Yu Minhong didn't expect was that it was precisely because of this transformation that Dong Yuhui became famous and Oriental Selection became popular.
In the entrepreneurial history of New Oriental, Yu Minhong has been on the verge of collapse several times. However, it is precisely because of his rich experience and insights that Yu Minhong has continued to transform and exported his dreams and struggles to more people. youth.
Yu Minhong once said: "The success or failure of many things in New Oriental is still closely related to my personality and personality. This means that whatever New Oriental can develop will have the shadow of my personality."
To this day, we The shadow of the education and training era can still be found in the live broadcast room of Dongfang Selection. And the live broadcasts with their own classroom atmosphere also pushed Oriental Selection in a new direction.
A month ago, a "conflict" broke out within Oriental Selection. An internal "battle" between head anchor Dong Yuhui and former CEO Sun Dongxu put Oriental Selection and Yu Minhong "on fire". In the end, Yu Minhong had to He came out to "put out the fire" and replaced Sun Dongxu to take charge of the overall situation, while Dong Yuhui established a personal company.
In fact, before Oriental Selection became popular, Yu Minhong once gave Oriental Selection a framework. Facing the camera, Yu Minhong once said seriously: "In the future, the platform of Oriental Selection will focus on lifestyle products, including high-quality agricultural products. We will gradually have more self-operated products."
It can be seen from this that Yu Minhong is not just a live broadcast account, but a new business venture.
In the end, the "little composition" incident settled down in a way that Yu Minhong didn't want to see. The situation of losing more and more made Yu Minhong aware of more problems, and at the same time, he no longer blindly changed to something.
In the era of live broadcast, the anchor is the core of everything.
After experiencing this round of personnel turmoil, Oriental Selection gave an unsatisfactory answer.
On January 24, Oriental Selection announced its interim results for the six months ending in November 2023. The financial report showed that during the reporting period, the company achieved a total revenue of 2.795 billion yuan, a year-on-year increase of 34.4%; it achieved a net profit of 249 million yuan, A year-on-year decrease of 57.4%. Basic earnings per share were 0.25 yuan, a year-on-year decrease of 56.9%.
After the release of the financial report, Oriental Selection’s stock price fell by more than 15% continuously, and its market value evaporated by more than HK$4.2 billion.
's revenue and net profit have increased and decreased, and the market's premium for Oriental Selection is slowly returning to a reasonable price.
In fact, for most live broadcast companies, the core are two factors:
first, the head anchor;
second, the total GMV of the goods.
For a listed company, the ability of the head anchor to bring goods cannot be underestimated, and it is also the core competitiveness of its live broadcast company. However, due to the personal uncertainty of the anchor, the risk is relatively high. Once he says something wrong or has other personal moral issues, it can easily have a major impact on the company's business. Therefore, Yu Minhong recognized this problem from the beginning, and after Dongfang Selection's business stabilized, he decisively started de-core. But it didn't work out.
Because live streaming companies themselves are extensions of the fan economy, it is absolutely impossible to eliminate fans. Therefore, we can only vigorously cultivate anchors to combat such risks. However, judging from the current market, no one has been able to successfully copy the leading anchors.
This also shows that the top anchors are accidental and non-replicable.
However, for the sake of safe business development, balancing the revenue ratio between anchors is a necessary action. Therefore, although this crisis has had a big impact on Yu Minhong and Oriental Selection, his behavior is not wrong.
At present, Dong Yuhui has also established an independent studio, and the corresponding data in the next six months should be reflected in the financial report.
In addition, Kanjian Finance believes that the development of the live broadcast business has a certain cyclical nature. As consumers become more mature, their "impulsive consumption" behavior will decrease, and the live broadcast business will also be greatly affected by that time. , although Oriental Selection has divested its education business and successfully transformed, from a long-term perspective, this track is not absolutely safe. Therefore, the market gives it a relatively high valuation, and the bubble will slowly squeeze out in the future.
Of course, transforming into a platform company and entering the retail track may be one of the future directions for live streaming companies. But for live streaming companies, this road is not only full of variables, but its construction costs are also unbearable.
After Dong Yuhui became famous, Yu Minhong actually started to lay out the supply chain. In 2022, the official Weibo of Oriental Selection announced that plans to establish 20 self-operated product warehouses in five cities: Beijing, Guangzhou, Hangzhou, Zhengzhou, and Chengdu to provide nationwide logistics service guarantees for self-operated products. Warehousing and distribution services are provided by Provided by SF Express and JD Logistics.
At that time, some people believed that building a self-built supply chain was a long-term “money-burning” activity, and it was difficult to support Oriental Selection’s income.
But after its revenue reaches a certain level, its investment is also expanding. Clues can also be seen in this financial report. Regarding the sharp decline in net profit, Oriental Selection explained that it was due to the substantial growth of company's business, which led to an increase in inventory costs and transportation costs for self-operated products, as well as the expansion of the company's multiple expenses during the reporting period.
For example, sales and marketing expenses were approximately 560 million yuan, a year-on-year increase of 145.6%; R&D expenses were approximately 76 million yuan, a year-on-year increase of 56.5%; administrative expenses were approximately 143 million yuan, a year-on-year increase of 129.6%...
During the reporting period, Oriental Selection The total GMV of goods carried is 5.7 billion yuan, and the total number of paid orders for third-party products and self-operated products on Douyin is 59.6 million. In other words, Oriental Selection already has the ability to invest significantly in the supply chain, and should continue to expand investment in the future as the amount of GMV increases.
In addition, the financial report also shows that as of November 30, 2023, the number of self-operated products of Oriental Selection exceeds 264, and the revenue generated by self-operated products is approximately 1.9 billion yuan. A year ago, Dongfang Selection's self-operated business was still relatively weak.
For the next step, Dongfang Selection also plans to increase investment in the supply chain at the factory level to gain control over quality control measures, thereby making Dongfang Selection's production capacity more flexible and reducing raw material and management costs.
Yu Minhong said that in the face of greater user demand and a complex and ever-changing market environment, the company has launched a series of high-quality new products, new content and new live broadcast activities, and has also attracted and cultivated more outstanding talents in professional fields. Talent to support the rapid development of new businesses.
Kanjian Finance believes that although the financial report data of this Oriental Selection is not ideal, in fact Yu Minhong’s big chess pattern has been formed. It can be seen that Yu Minhong is definitely not willing to just do live broadcasts to bring goods, and the future of Oriental Selection will be inevitable We will continue to accelerate our transformation until we become a platform company.
