Hello everyone, I am Jian Lijun from the editorial department of Jian Qi
Last week, Dongfang Selection's Little Essay incident caused a lot of uproar, and finally ushered in the finale.
The cause of the incident was Dongfang Selection's reply to netizens, saying that each live broadcast was created by a team, which caused dissatisfaction among Dong Yuhui's fans, and then the CEO of Dongfang Selection came forward to apologize, but due to the poor tone and attitude of the response, the contradiction was intensified, and more than 2 million fans were lost in just a few days.
In the end, Oriental Selection Company announced the removal of the former CEO and apologized to netizens again.
As of this Monday, Dong Yuhui reappeared live on the platform, and his identity changed to Dongfang Selection Senior Partner, and the matter was settled.
In the past few days, I have been eating melons like everyone else, but my focus is not on the workplace palace fight of large companies or the "fan circle" of e-commerce live broadcasts, but I am curious about how Dongfang Selection has developed from nothing to today's scale.
I took a look at the relevant information of Dongfang Selection, and I felt that this company can make a name for itself in the red sea of e-commerce, in addition to the unexpected factor of the anchor breaking out of the circle, the key is inseparable from the correct original intention.
So what is its original intention?
Risk Warning: The ** mentioned in this article is for reference only and does not make any investment recommendation. Investment is risky, and decisions need to be made carefully. Buy and sell accordingly at your own risk.
Speaking of the birth of Oriental Selection, it originated from a big ** in the education and training industry two years ago
In July 2021, the state officially introduced the "double reduction" policy, prohibiting education and training institutions from providing for-profit off-campus tutoring services for primary and secondary school students, which is almost a fatal blow to the core business of education and training companies such as New Oriental.
For the whole year of 2021, New Oriental's revenue fell by 80%, its market value increased by 90%, 60,000 employees were laid off, and the company paid nearly 20 billion yuan in tuition fees and rent for teaching venues.
When the company was on the verge of bankruptcy, Yu Minhong, as the founder of New Oriental, kept looking for new business directions, and finally he decided to transform into a live broadcast of agricultural products and founded Oriental Selection.
There are two reasons why Mr. Yu crosses borders to engage in agriculture:
One is that he grew up in the countryside, has a sense of affinity for agricultural products, and likes agriculture himself;The other is that the sale of agricultural products is also in line with the general direction of the state to help agriculture, and the policy risk is relatively small.
On December 28, 2021, Dongfang Selection began to premiere, and at first, the number of people in the live broadcast room was very low, and it took several months to pay attention to hundreds of thousands of fans, and there was almost no improvement in the new business.
But Yu Minhong felt that he couldn't be in a hurry when selling agricultural products, and he had already done a good jobA loss of 100 million in 1 year, a loss for 5 consecutive yearspsychological preparation.
On June 9, 2022, Dong Yuhui, a young man from Shaanxi, became famous overnight with his talent for high-frequency output of golden sentences.
Dongfang Selection's live broadcast room has also become popular, the number of ** people has risen rapidly from thousands to tens of thousands, and then skyrocketed to 100,000+, and the number of fans has exceeded 10 million in a month from about 1 million, and has accumulated more than 31 million followers so far.
And last year's unexpected live broadcast out of the circle also made Dongfang Selection not suffer from losses for too long.
In fiscal year 2022 (ended May 31, 2022), Dongfang Selection's total revenue was nearly 900 million yuan, and the loss reached more than 500 million yuan
Although the loss of 500 million yuan in 1 year was beyond Lao Yu's expectations, fortunately, the long-term pain is better than the short-term pain, and the total revenue of Dongfang Selection in fiscal year 2023 (as of May 31, 2023) suddenly increased to 4.5 billion yuan, and it received 9Net profit of 700 million yuan.
In order to focus more on the live broadcast e-commerce business, in January 2023, New Oriental**, which is listed on the Hong Kong stock market, officially changed its name to Oriental Selection, and in November this year, Oriental Selection became a pure live broadcast e-commerce company to the parent company New Oriental** education business.
I checked the main business of Dongfang Selection, and at present, the company not only sells agricultural products, but also books, audio, daily necessities, beauty and skin care, wine, etc.
Dongfang Selection has 6 different accounts on Douyin (Dongfang Selection, Dongfang Selection Beautiful Life, Dongfang Selection's Books, Dongfang Selection to See the World, Dongfang Selection Will Enter Wine, and Dongfang Selection Self-operated Products), forming a live broadcast matrix, each focusing on vertical categories, and each account also has more than one million fans.
In fact, before the fermentation of the Little Composition incident, Dongfang Selection also fell into a huge ** whirlpool.
At that time, a well-known anchor broke the news that a corn selected by Dongfang would be sold for 6 yuan (usually corn purchase ** is about 7 cents a piece), which is conscienceless;There are also many users who report that the ** of Dongfang selection and sales goods is high.
The official explanation for this is that the agricultural products they choose are of better quality, so the purchase cost is higher, and the final sale** will be more expensive.
Does the company's sale of ** agricultural products mean that it is very profitable?
Actually, it's notCompared with the previous education business, the earning power of agricultural products is actually not high
According to the research report data of the institution, the gross profit margin of the education business that the company was still engaged in last year was about 66%, and the gross profit margin of live broadcast e-commerce was about 38%.
Considering that live-streaming e-commerce also includes high-gross margin products such as beauty and alcohol, if these are removed, the actual gross profit margin of agricultural products may be lower.
From the perspective of revenue model, the company's revenue is mainly divided into self-operated product revenue and third-party product revenue.
Specifically, when the company sells its own products, it recognizes the full income of the goods, and when it sells third-party products, it recognizes commission income.
Dongfang Selection is a little different from other e-commerce live broadcast companies, in addition to getting commissions, the general head anchors also charge pit fees, as long as the goods are on the shelves in the live broadcast room, the merchant must pay this fee (the commission is charged proportionally according to the sales volume of the goods).
The third-party products sold by Dongfang Selection only have pure commission income and no pit fees (Yu Minhong said that he does not want the platform to put unqualified products on the shelves in order to collect pit fees).
In this way, the company's income is relatively small, and if the company chooses to sell low-priced products, the income may not be able to maintain normal operation, and it can only take the ** route.
In addition, this also brings a problem, the income of anchors with goods is difficult to compare with other platform anchors.
We know that live broadcast e-commerce basically still relies on anchors to bring goods, and the core competitiveness of this industry is, to put it bluntly, talents.
SoHow is the talent pool selected by Dongfang?Did you get the treatment that the industry deserves?
Looking back on history, New Oriental has always been the cradle of cultivating famous teachers, and the number of successful entrepreneurs after leaving New Oriental is countless.
As of the latest data, New Oriental has about 2 teachers630,000 people (compared to the future 1.)620,000 people, 1210,000 people), still with the largest number of teachers in the industry:
Most of the anchor team selected by Dongfang has transformed from the identity of New Oriental teachers, in addition to Dong Yuhui, several other anchors are also very good, and the live broadcast team has been expanded to about 40 people through continuous recruitment and screening.
The new anchors also have high education and good eloquence, which is clearly different from the top anchors on other platforms.
Of course, what everyone is most concerned about is whether the company can retain talents, which is also revealed in the financial report.
In fiscal year 2023 (as of May 31, 2023), the employee turnover rate of Oriental Selection is around 27-28%, compared with about 73-75% in the previous fiscal year, which is still a significant improvement
In addition, according to the relevant information of recruitment**, the salary gap between the various recruitment positions released by Oriental Selection is small, such as senior copywriting planning, with a monthly salary of 15-30,000 yuan, and the company's recruitment of talent anchors is 2-40,000 yuan per month
Now I kind of understand the mentality of the copywriting team, since there is not much difference in the salary everyone gets on the surface, and the daily work needs team cooperation, why do you anchor be in the limelight every day, and I have to be willing to be a green leaf?
Even a star anchor like Dong Yuhui has been out of the circle for a year and a half, but he is still an ordinary employee within the company, and he feels that everyone is on an equal footing, and he will naturally speak more casually.
As for how much Dongfang Selection's treatment to Dong Yuhui was increased later, it is not convenient for us to inquire about people's privacy, but the company issued an equity incentive announcement for core employees this year:
On April 11, 2023, Oriental Selection granted 3,045. to 3 executives and 151 employees at a price of HK$29**90,000 shares**.Dong Yuhui is naturally also within the scope of key employees, and as long as the performance appraisal indicators are met in the future, the company will grant part of the equity to the participants, but it will take 3 years to fully receive the account.
I looked at the stock price trend of Oriental Selection this year, the highest rose to 75 Hong Kong dollars, the lowest fell to 22 Hong Kong dollars, if you believe that Oriental Selection will continue to grow in the next 3 years, the previous stock price fell below 29 yuan, it may be a good opportunity.
Having said that, after this small essay incident, Dongfang Selection probably understands that its core competitiveness is not high-quality agricultural products, but high-quality anchors.
After all, there are many delicious and high-quality agricultural products on the market, but there are only a handful of anchors who can talk from a grain of rice to history, geography, and cosmic life.
SoThe high premium of Dongfang's selection of agricultural products really comes from the knowledge and literacy of excellent anchors
In the future, if Dongfang Selection adheres to the direction of first-class agricultural products, it is still necessary to rely heavily on high-knowledge anchors, and they must also be given a certain right to speak within the company.
In his speech at the Communication University of China this year, Dong Yuhui gave several life suggestions to the young people present, one of which was the correct original intention
I can't help but feel that life is wonderful, and success is not what you suddenly do right, but what you have been insisting on.
In the era of low-cost e-commerce such as Pinduoduo, it is also hoped that Dongfang Selection will adhere to the original intention of making agricultural products, and let farmers get more income and consumers enjoy more high-quality agricultural products through the model of selling high-quality products.
This article was first published in Jane Seven Reading Cai.
id：jane7ducai）
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