China tech crackdown: Yu Minhong, founder of the nation’s largest private education services firm, makes debut as live-streaming host
- The founder of New Oriental Education & Technology Group hosted his first live-streaming e-commerce session on ByteDance-owned short video platform Douyin
- During that session, Michael Yu Minhong reiterated his company’s plan to launch a live-streaming e-commerce platform for farm products
Michael Yu Minhong, the founder, chairman and chief executive of New Oriental Education & Technology Group, has added live-streaming e-commerce host to his illustrious career, following Beijing’s crackdown on the country’s once high-flying off-campus education services sector.
The 59-year-old education entrepreneur, often described as China’s most famous teacher, hosted his first live-streaming e-commerce session on Tuesday, pitching farm products such as cherries, on Chinese short video platform Douyin, operated by TikTok owner ByteDance.
Yu sold products worth about 4.6 million yuan (US$721,827) during his live-streaming debut, according to data from live streaming tracking platform Huitun. Some online users, however, complained that Yu pitched products that were too expensive. For example, a bunch of cherries weighing 2.5 kilograms cost 299 yuan, more than the price of 15 apples that sell for 128 yuan, according to Huitun data.
During that same session, Yu reiterated New Oriental’s plan to launch a live-streaming e-commerce platform as part of efforts to diversify its operations. Yu last month announced plans to set up a large-scale agricultural online platform, through which he will sell farm products with the help of hundreds of employees who have been reassigned from their teaching jobs.
Yu’s decision to go into live-streaming e-commerce was made “after reading countless reports and material” about this market segment and considering the points of those opposed to this move, according to an article published on New Oriental’s official WeChat account on Tuesday. The post said Yu believes the company is “doing the right thing”, well aware that starting a live-streaming e-commerce operation would be “very hard” amid Beijing’s increased scrutiny of the sector.
In the same post, New Oriental indicated that it has not given up on the education sector. It said the power of live streaming can be used to “help more farmers, with the goal of achieving common prosperity”, alluding to President Xi Jinping’s push to give all citizens the opportunity to be wealthy.
“Education is always our original intention,” the company’s post said.
Although Yu received praise for his plan from Chinese social media users, a commentary published last month by state-owned newspaper Economic Daily slammed Yu’s move to live streaming. “New Oriental shouldn’t learn from Li Jiaqi”, the commentary said, referring to China’s top live-streaming pitchman for beauty products known as the “Lipstick King”.
Responding to that criticism last month, Yu suggested that the article was simply a “kind reminder” of the potential risks involved in live-streaming e-commerce, adding that “no industry is easy to do”.
The stakes are high for Yu and New Oriental, which is listed in both New York and Hong Kong, in this new initiative, following the company’s recent move to close nearly 1,500 training centres.
The State Council’s surprise decision in July to limit profit-making in the private education industry swiftly upended Yu’s sprawling business empire. Under sweeping new regulations, cram schools from grade one to nine are banned from making profits by teaching school curriculum subjects. Teaching at weekends and during public or school holidays is also prohibited.
Still, Yu’s personal story of emerging from poverty has earned him wide admiration across the country. After gaining admission to the prestigious Peking University and graduating with an English major, Yu subsequently ditched a stable teaching job to start a one-classroom business in Beijing that grew to become a New York-listed company.
Yu has a personal net worth of US$1.1 billion as of Wednesday, according to Forbes. New Oriental’s stock, however, has plunged sharply in the past year. Its shares closed at US$2.02 on Tuesday in New York, down from a peak of US$19.60 in February last year.
Author: Tracy Qu, SCMP