Dong Yuhui and Yu Minhong have finally completed a long breakup.

According to Jiemian News, on July 25th, EastBuy announced on the Hong Kong Stock Exchange that Dong Yuhui has decided to no longer serve as an employee of the company or as a senior management member of one of its consolidated affiliated entities. This departure stems from Dong Yuhui's career aspirations, his dedication to other ventures, and personal scheduling considerations, taking effect on July 25th, 2024.

The announcement also made public statements regarding Dong Yuhui's personal benefits, compensation, and arrangements related to "Yuhui and Company." This marks the end of the "Little Essay" controversy involving EastBuy, as Dong Yuhui officially leaves EastBuy to fly solo.

Yuhui and Company Will Officially Take Dong's Surname

In fact, the rumors of Dong Yuhui flying solo have persisted since the "Little Essay" incident erupted at EastBuy late last year. Especially among his "mothers-in-law" fans (Dong Yuhui's fans), they firmly believe that he has suffered greatly under Yu Minhong's leadership, with his value unrecognized and constantly undermined by the EastBuy team. They believe it's better for him to quit and go it alone.

This controversy presented Yu Minhong with a dilemma of choosing between "Little Sun of East" (Sun Dongxu, former CEO of EastBuy) and Dong Yuhui. Ultimately, Yu Minhong made a difficult decision: On December 16th, 2023, Sun Dongxu was relieved of his duties as Executive Director and CEO of EastBuy, with Yu Minhong taking over those roles concurrently. Simultaneously, New Oriental issued a series of appointments, elevating Dong Yuhui from an ordinary employee to Senior Partner of EastBuy and Cultural Assistant to the Chairman of New Oriental Education & Technology Group, concurrently serving as Vice President of New Oriental Cultural Tourism Group.

Yu Minhong has also visibly provided Dong Yuhui with ample support. With his and EastBuy's backing, Dong Yuhui successfully launched the new account "Yuhui and Company" in early January of this year, achieving a debut sales figure exceeding 100 million yuan on January 9th, marking a resounding success.

To date, the Douyin account of Yuhui and Company has surpassed 21.5 million followers, while Dong Yuhui's personal Douyin account boasts over 26 million followers. In the half-year since its inception, Yuhui and Company's total livestream sales on Douyin have exceeded 4 billion yuan. Experts estimate that the commission income for Yuhui and Company in this half-year period could reach as high as 600 million yuan, with a net profit of 400 to 500 million yuan. This performance is on par with, and at times even surpasses, that of EastBuy.

Despite Yuhui and Company's impressive sales performance, Dong Yuhui and the company have found themselves in an awkward position within the EastBuy ecosystem. Fundamentally, Yuhui and Company is just one part of EastBuy's account matrix, with its revenue and profits fully consolidated into EastBuy. Moreover, the legal representative of Yuhui and Company's holding company, New Oriental Xuncheng Network Technology, is Sun Dongxu.

During an extraordinary shareholders' meeting earlier this year, EastBuy management stated that Yuhui and Company is a wholly-owned subsidiary of EastBuy, with 100% ownership by the latter. EastBuy decides its supply chain and personnel incentives, but Dong Yuhui has the authority to decide what products to sell and what not to sell. Yu Minhong has also repeatedly stated that Dong Yuhui will not earn commissions like traditional MCNs but will instead receive equity and higher incentives. At the time, there were rumors that Dong Yuhui had acquired 0.5% equity in EastBuy, valued at up to 120 million yuan based on current market capitalization. However, this has not been officially confirmed.

Yet these measures fail to address external质疑s about Dong Yuhui holding a titular position, with some suggesting he remains just a "senior employee." Among those who may be most aware of Yu Minhong's situation is his former colleague Luo Yonghao, who bluntly stated during a livestream that it's all empty talk. If a listed company grants significant equity, it would theoretically issue an announcement. The focus should be on whether this has happened. Senior partnership is not important, as it's not regulated by business authorities. What matters most is how much equity is granted.

With Dong Yuhui's official resignation, the ownership of Yuhui and Company will undergo fundamental changes. Following EastBuy's announcement, Yu Minhong and Dong Yuhui issued open letters to address market and industry concerns. According to the announcement and open letters, EastBuy will sell 100% of its equity in "Yuhui and Company" to Dong Yuhui for 76.585 million yuan, with Yu Minhong arranging for the payment. In addition to fulfilling all promised benefits to Dong Yuhui, Yu Minhong has requested and received approval from the Board of Directors and the Compensation Committee to award all net profits of Yuhui and Company to Dong Yuhui.

Subsequently, Yu Minhong further explained the announcement in the comments of his open letter, stating, "'Yuhui will hold the equity purchase funds required for Yuhui and Company, and I will arrange for the payment in accordance with listed company rules and the company's articles of association.' This means that I have arranged for Yuhui to purchase the company's equity, which is essentially a gift from EastBuy to Yuhui."

Dong Yuhui also responded in the comments, saying, "The equity purchase funds were fully supported by my former teacher in accordance with listed company rules. Additionally, Mr. Yu has generously provided us with operational support free of charge." In other words, after EastBuy completes the transfer in accordance with listed company rules, Yuhui and Company will no longer bear Yu's surname but will officially take Dong's surname.

Dong Yuhui Faces Greater Challenges

According to Yu Minhong's open letter, this "breakup" has been in the works for a long time. He revealed that he had multiple face-to-face conversations with Dong Yuhui in March this year. To ensure a better development platform for Yuhui and Company and avoid business conflicts and public opinion entanglements, both parties, after repeated negotiations, finally decided that after the fiscal year ends (May 31st), Yu Minhong would request the Board of Directors' approval to transfer 100% of Yuhui and Company's shares to Dong Yuhui personally.

It's worth noting that shortly after the "Little Essay" controversy, Yu Minhong revealed that he had discussed with Dong Yuhui the idea of building his own platform as early as a year ago (calculated from the time when Dong Yuhui gained popularity in 2022), but it had not been implemented.

At the China Entrepreneur Summit earlier this year, Yu Minhong, reflecting on the controversy, again spoke candidly, "I have a good sense of direction for things, but my ability to make decisive actions and tackle problems head-on is far from sufficient."

Obviously, Yu Minhong's decisiveness was insufficient at that time, as he only considered appeasing his top livestreamer and providing a larger platform without fundamentally solving the problem. Especially this year, EastBuy seems to have grown accustomed to bringing internal issues to the public eye, subjecting them to public discussion, judgment, and质疑, ultimately turning internal contradictions into public controversies and inflicting irreparable damage to the company.

Critics point out that EastBuy now resembles a "business giant baby," continuously consuming the goodwill Dong Yuhui accumulated in the early stages. This behavior is not befitting a mature listed company. It's understandable why, after numerous trending topics, many people have become disillusioned with EastBuy. Yu Minhong should lead EastBuy to learn to address internal issues internally.

In Tang Chen's view, a significant reason for Yu Minhong's decisive choice this time lies in "EastBuy's current mess." External public opinion and internal struggles have compelled him to act swiftly.

He also wrote in his open letter, "My reduced appearances on Yuhui and Company's livestreams are mainly because whenever I appear, there are intense attacks. I also dare not appear on EastBuy's livestreams, as that would also elicit intense attacks. I'm caught between a rock and a hard place. As the founder of EastBuy, supporting the company's development has become an extremely difficult task."

From helping Dong Yuhui build his own platform to letting him fly solo, Yu Minhong has been fair. After all, business is business, and human connections are human connections.

However, for Dong Yuhui, he will face greater challenges. As he said in his open letter, "Detached from the shelter of the harbor, Yuhui and Company will sail alone into the vast ocean from today onward. The future is unpredictable, and we must give it our all."

Foremost among these challenges is the issue of supply chain restructuring. This problem arose shortly after Yuhui and Company's debut earlier this year. When the new account had only been broadcasting for three days, it had to halt its broadcast for a day due to a lack of products to sell. The hashtag "#Yuhui and Company Halts Broadcast Due to Lack of Products" even trended for half a day, garnering 110 million views to date.

Specifically, during the first three days of Yuhui and Company's broadcast, a total of 309 products were listed in the live room, with food and beverages accounting for nearly half (41.76%), followed by fresh produce (23.62%). Books and education came in third, accounting for 12.3%. These listed products did not include any EastBuy self-operated products and even overlapped with some selections from the main account, initially giving the impression of internal competition.

Tang Chen has analyzed that the importance of supply chains for livestreaming sales cannot be overstated. When Yuhui and Company was still within the EastBuy framework, its supply chain was primarily managed by EastBuy, as stated by EastBuy management. Yuhui and Company's supply chain and personnel incentives were decided by EastBuy, while Dong Yuhui had the authority to decide what to sell and what not to sell.

Judging from the current situation, an ideal scenario would be for the independent Yuhui and Company to continue using EastBuy's self-developed information system free of charge. After more than half a year of honing, Dong Yuhui has demonstrated his management abilities, refining Yuhui and Company's supply chain capabilities to the point where they can support him as he "sails alone into the vast ocean."

Moreover, fame brings both blessings and curses. As Dong Yuhui gradually ascends to godlike status, every move he makes is magnified by the outside world, triggering various public opinions. For example, recently, in an outdoor radio program, Dong Yuhui stated, "I am very resistant to selling things. Truthfully, I don't enjoy this work even today." "Perhaps it's fundamentally due to my previous personality traits and past professional experiences." Although Dong Yuhui feels that his work has supporting significance, he doesn't find joy in it. These remarks directly caused EastBuy's share price to drop by more than 10%.

Objectively speaking, for a long time, EastBuy and Yu Minhong have borne too much of the criticism aimed at Dong Yuhui. Yu Minhong has even said that he's scared of being criticized online now, as he's been cursed more times than in a hundred lifetimes combined, eventually forcing him to disable comments on Douyin.

Traffic can make people famous, but it can also create a deadly vortex. For the independent Dong Yuhui and Yuhui and Company, this is a challenge they must face. In addition to cherishing his reputation more, he needs to strike a balance between administrative management and selling products. Beyond that, issues such as sales targets, influencer strategies, and personal disillusionment become less prominent.

From the perspective of the entire livestreaming industry, Dong Yuhui's solo flight will not significantly impact the overall market. What people expect is that his "unconventional" sales approach can bring more new stories and value spaces to the industry. Perhaps this is the greatest expectation for Dong Yuhui's independent journey.

Now, Yu Minhong has truly completed the "de-Dong Yuhui-fication," with the "Chinese Partner 2.0" version unfolding in a manner befitting the era of internet traffic. To some extent, this half-year buffer period has not necessarily been a bad thing for EastBuy. Its business model has stabilized, relying neither on top livestreamers nor operating as an MCN, but instead focusing on self-operated products, with New Oriental as its backbone. Moving forward, as long as Yu Minhong can stabilize the situation, EastBuy will remain a significant player in the live e-commerce landscape.

It's noteworthy that after EastBuy announced Dong Yuhui's resignation, many netizens left messages on "Little Sun of East's" Douyin account: "Mr. Sun, today is a good day. Looking forward to your early return to the livestream."