Have you ever heard of Oriental Selection?This is a live broadcast e-commerce platform transformed from the ** education company under New Oriental Group, specializing in the sale of agricultural products, featuring bilingual delivery and technological innovation, which has attracted the attention of many consumers and netizens. However, what you may not know is that this company has just made a major decision, that is, to sell its education business, completely part ways with New Oriental, and concentrate on live broadcast e-commerce. What's going on here?Why did Dongfang Selection give up education, which was once its core business?What impact does this have on the future development of Oriental Selection and New Oriental?This article will uncover the truth behind this hot topic for you, and let you understand the transformation path of Dongfang Selection, as well as its business logic and market prospects.
Oriental Selection, formerly known as New Oriental**, is a subsidiary of New Oriental Group, mainly engaged in ** education business, including preschool education, K12 education, university education and institutional customer education. According to the announcement of Oriental Selection, as of May 31, 2023, the net profit before tax of Oriental Selection's education business was 1RMB17.6 billion, net profit after tax of 121 billion yuan, accounting for 26 percent of total revenue8%。It can be seen that the education business is one of the important incomes of Oriental Selection**, and it is also its main link with New Oriental Group.
The regulatory environment for the education industry has changed. In July 2021, the state issued a "double reduction" policy, which strictly regulated and restricted off-campus training institutions, requiring them not to go public for financing, not to operate across regions, and not to carry out academic training. This has had a huge impact on New Oriental's business, causing it to terminate its preschool education and K12 education business and turn to other fields, such as education services, exam preparation, education, overseas study consulting, etc.
The needs and habits of the education market have changed. Due to the impact of the new crown epidemic, students' learning and lifestyle have changed, the boundaries between online and offline education have become blurred, and students are increasingly inclined to choose the OMO (online-merge-offline) education model, that is, the combination of online and offline education mode. This means that the business division between New Oriental Group and Oriental Selection, that is, New Oriental Group operates offline education and Oriental Selection operates online education, has lost its meaning, but will cause duplication and waste of resources. Dongfang Selection's live broadcast e-commerce business has achieved breakthrough development.
In 2021, Dongfang Selection began to explore the live broadcast e-commerce business, using the existing technology and talent pool, through the "Dongfang Selection" account on different platforms, live selling agricultural products, featuring bilingual delivery and technological innovation, quickly accumulating a large amount of traffic and popularity, and becoming an agricultural product technology company. Dongfang Selection's live broadcast e-commerce business has become its core business and has entered a stage of stable growth. According to Dongfang Selection's financial report, in fiscal year 2023, Dongfang Selection's live broadcast e-commerce business revenue will be 45100 million yuan, up from 6 percent in the previous fiscal year0.0 billion yuan increased by 651%, and the net profit was 9RMB 700 million, achieving a significant turnaround.
The restructuring of the business allows each to focus on its own specific industry. After the event, the industries operated by Oriental Selection and New Oriental Group will be different from each other, Oriental Selection will no longer operate in the field of education, but will become a specialized self-operated product and live broadcast business operator, while New Oriental Group will focus on the education industry, including education services, test preparation, education, overseas study consulting, etc.
In this way, each can better play its own advantages and characteristics, and improve its core competitiveness and market share. The reorganization of the business provides greater clarity and ease of management and evaluation of the respective lines of business. **After the event, the business lines within Oriental Selection and New Oriental Group will be more defined, and their respective management will be able to more clearly evaluate the performance and position of their respective businesses in their respective industries, so as to formulate more reasonable and effective strategies and plans to improve their operational efficiency and quality. The restructuring of the business has resulted in a more rational valuation approach and increased market acceptance.
*After the event, Oriental Selection and New Oriental Group will use different valuation methods to reflect their own value and potential according to their respective market positions and industry characteristics. This makes it easier for investors to assess their respective business and market prospects, thereby increasing confidence and support for them. Business restructuring gives shareholders and investors more flexibility to choose the sectors they want to invest in. After the event, Oriental Selection and New Oriental Group will become two completely independent listed companies, and Oriental Selection of 1.5 billion ** education business to New Oriental is a hot event that has aroused widespread attention and discussion. Behind this event, it reflects the changes in the education industry and market, as well as the transformation and innovation of Oriental Selection and New Oriental. Dongfang Selection gave up its former core business and concentrated on live broadcast e-commerce, showing its pursuit and confidence in agricultural product technology. New Oriental took back its ** education business and concentrated on education services and exam preparation, demonstrating its persistence and professionalism in the education industry. The restructuring of the two businesses allows each to better adapt and develop, and also provides more choices and opportunities for shareholders and investors. 1.5 billion yuan Oriental Selection announced**