New Oriental livestreaming business is floundering: company founder

Daily sales through the livestreaming platform of New Oriental, a previous private educational business, were “too small”, the company’s founder Yu Minhong said, following the launch of the platform two weeks ago.

In an article published Monday on his personal blog post named “Laoyu Ramblings,” Yu said “Dongfangzhenxuan [the name of the livestreaming platform] has just started. Its sales remain too small with only hundreds of thousands yuan (of revenue) each day.”

“As we started and have goals, there will be no retreat. We have reasons and motivation to move forward,” he said.

In order to diversify its business, Dongfangzhenxuan was set up by New Oriental and was formally launched on December 28, 2021, after China implemented tougher regulations on private tutoring business.

In contrast to the platform’s stellar performance during its debut in which sales hit 5 million yuan ($780,000), the platform saw sales plunge to combined 1 million yuan over the next nine livestreaming sessions, bjnews.com reported. Top selling products on the livestreaming platform were dragon fruit, wolfberry tea, Gannan orange and Korla pear.

Selling agricultural products via livestreaming was part of the company’s new strategy to survive, however the long-term prospects of the new business mode is to be seen.

In another article on Saturday, Yu disclosed New Oriental’s market value evaporated by 90 percent, alongside an 80 percent slump in its operating revenues and the dismissal of 60,000 employees, as a result of the government’s tightened regulation on private tutoring business.

“What I said are all facts. No matter how the external voices comment, New Oriental will keep growing. I must face the difficulties and lead others march forward regardless of hardships,” Yu said on Monday.

The revenue figures garnered significant attention. In a Sunday statement published on the Hong Kong Stock Exchange, New Oriental said some media reports about Yu’s article were not authorized by the company and do not represent the views of the company.

“The company is in the process of reviewing its financial results for the six months ended November 30, 2021 and will update the market on its financial performance during this period as soon as it becomes available, which is anticipated to be around end of January 2022 and no later than mid-February 2022,” read the statement.

Source: Global Times

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