In a move that market analysts said might restore both the fortunes and reputation of Hong Kong-listed e-commerce platform East Buy, the company promoted its most influential livestreamer Dong Yuhui to
East Buy, a subsidiary of New York-listed Chinese private tutoring giant New Oriental Education and Technology Group, also said late on Monday it will open a new and exclusive livestreaming channel for Dong.
East Buy, which was originally an e-learning provider called Koolearn Technology, successfully transitioned to a livestreaming-based e-commerce company last year, riding Dong's popularity as an influential livestreaming host.
Formerly an English teacher at New Oriental Group, Dong, in turn, rode East Buy to a bigger following among netizens and big money, as his insightful and humorous style helped sell a range of products, including farm produce, to millions since June 2022.
At his peak, Dong commanded a following of 20 million, swelling East Buy's patrons to 30 million.
But a dispute arose on Dec 6 after East Buy's editorial team sought to take joint credit for certain scripts that Dong's fans presumed were solely his work.
One thing led to another, creating a notion that Dong's positive impact on East Buy's livestreaming business may have been sought to be undermined. Sun Dongxu, then CEO of East Buy, sought to put things in proper perspective, but his manner online was seen as abrasive by Dong's fans, which prompted the company's board to oust Sun on Saturday and replaced him with Yu Minhong, founder and chairman of New Oriental.
This whole episode even affected East Buy's shares that slipped to HK$26.25 ($3.3) on Friday in Hong Kong, only to rebound more than 17 percent to HK$31.8 on Tuesday.
In just two days — Monday and Tuesday — over 2 million followers returned to East Buy's platform as well as restoring the overall following on Easy Buy's Douyin account to over 30 million. Douyin is the name TikTok uses in China.
Late on Monday, Yu appeared in a livestream session along with Dong, disclosing that East Buy will "set up a studio, open a separate channel and a livestreaming room for Dong's exclusive use".
Henceforth, Dong will livestream on both the new channel and East Buy, but income from the new channel will go to East Buy.
A New Oriental statement released late on Monday said Dong will also act as cultural assistant to Yu as well as vice-president of the parent company's cultural and tourism business.
In July this year, New Oriental officially kicked off its tourism business that aims to offer high-quality cultural tours to people, especially middle-aged and the elderly. In September, its first 14-day international tour focused on a slew of European cities like Paris and Rome was priced at 48,888 yuan ($6,850).
On Monday night, Dong said he will appear more on the proposed new channel in the future, and will go beyond livestreaming-based e-commerce into book promotions, author interviews, and culture and tourism promotions.
A report from China Galaxy Securities said on Monday the Dong episode shows that major livestreaming-based e-commerce companies should expect such operational hiccups. For sustained business growth, livestreaming-based e-commerce companies must embrace a business model that is "product-driven" rather than "star-oriented".
Pan Helin, co-director of the Digital Economy and Financial Innovation Research Center at Zhejiang University's International Business School, however, said it is not easy to reduce reliance on star livestreamers overnight. "To become an influential livestreamer like Dong needs luck. Without him, New Oriental may not even succeed in reviving its business."
