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

According to Jiemian News, on July 25, East Buy announced on the Hong Kong Stock Exchange that Dong Yuhui has decided to no longer serve as an employee of the company or a senior executive of a consolidated affiliated entity, effective July 25, 2024, due to his professional aspirations, dedication to other endeavors, and personal schedule.

The announcement also publicly clarified matters related to Dong Yuhui's personal benefits, compensation, and arrangements with Hui Tongxing. This marks the end of the "mini-essay" controversy at East Buy, as Dong Yuhui leaves East Buy to officially fly solo.

Hui Tongxing will officially bear the Dong surname

In fact, rumors of Dong Yuhui flying solo have persisted since the outbreak of the "mini-essay" incident at East Buy late last year. Especially among his "mothers-in-law" fans, who firmly believe that he suffered greatly under Yu Minhong's leadership, with his value unrecognized and constantly undermined by the East Buy team, making it better for him to quit and work independently.

This controversy presented Yu Minhong with a dilemma: choose between Dong Xiaosun (former East Buy CEO Sun Dongxu) and Dong Yuhui. In the end, Yu Minhong made a difficult decision: On December 16, 2023, Sun Dongxu was removed from his position as Executive Director and CEO of East Buy, with Yu Minhong taking over. Meanwhile, New Oriental issued a series of appointments, elevating Dong Yuhui from an ordinary employee to Senior Partner of East Buy, Cultural Assistant to the Chairman of New Oriental Education & Technology Group, and Vice President of New Oriental Cultural Tourism Group.

Yu Minhong also gave Dong Yuhui sufficient support publicly. With his and East Buy's backing, Dong Yuhui completed the cold start of his new account "Hui Tongxing" in early January, launching his first broadcast on January 9, achieving sales exceeding 100 million yuan, making a resounding debut.

As of now, Hui Tongxing's Douyin account has over 21.5 million followers, while Dong Yuhui's personal Douyin account has over 26 million followers. In the half-year since its launch, Hui Tongxing's total sales from live streaming exceeded 4 billion yuan. Experts estimate that Hui Tongxing's commission income in this half-year may be as high as 600 million yuan, with a net profit of 400 to 500 million yuan. This performance is already on par with, or even surpasses, East Buy at certain times.

Although Hui Tongxing's sales performance is commendable, Dong Yuhui and Hui Tongxing face an awkward role within the East Buy system. Fundamentally, Hui Tongxing is just one of East Buy's account matrixes, with its revenue and profits fully integrated into East Buy. Additionally, the legal representative of Hui Tongxing's holding company, New Oriental Xuncheng Network Technology, is Sun Dongxu.

At an extraordinary shareholders' meeting earlier this year, East Buy's management stated that Hui Tongxing is a wholly-owned subsidiary of East Buy, with 100% ownership. East Buy decides its supply chain and employee incentives, but Dong Yuhui can decide what to sell and what not to sell. Yu Minhong has repeatedly stated that Dong Yuhui will not receive commissions like traditional MCNs but will instead be allocated equity and higher incentives. There were rumors that Dong Yuhui had acquired 0.5% of East Buy's equity, valued at up to 120 million yuan based on the current market value, but this has not been officially confirmed.

However, this fails to address outside doubts about Dong Yuhui holding a nominal position, suggesting he is still just a "senior employee." One possible source of such skepticism is Yu Minhong's former colleague Luo Yonghao, who bluntly stated during a live broadcast that these are all empty promises. If a listed company grants significant shares, it would theoretically issue an announcement, and only this matters.Senior partners are not important, and the industrial and commercial department does not manage this, none of these are important. The most important thing is how much was given.

With Dong Yuhui's official resignation, there will be fundamental changes in the ownership of "Yuhui's Journey". After the announcement by Oriental Selection, Yu Minhong and Dong Yuhui successively issued public letters responding to market and industry concerns. According to the announcement and the public letters, Oriental Selection sold 100% of the equity of "Yuhui's Journey" to Dong Yuhui for 76.585 million RMB, arranged to be paid by Yu Minhong. Besides paying Dong Yuhui all the promised benefits in full, Yu Minhong has requested the board of directors and the compensation committee, and obtained their approval, to award all net profits of "Yuhui's Journey" to Dong Yuhui.

Subsequently, Yu Minhong further explained the announcement in the comments of the public letter. He stated, “‘Yuhui holds the required equity purchase funds for "Yuhui's Journey," and I have arranged for it to be paid in a manner that complies with the rules of the listed company and the company's articles of association.’ This means that I arranged the money for Yuhui to buy the company; the company is given to Yuhui.”

Dong Yuhui also responded in the comments, “The purchase funds for this equity transaction were fully supported by Mr. Yu according to the rules of the listed company. Additionally, Mr. Yu also provided free support for our operating system.” In other words, after the transfer is completed according to the rules of the listed company, "Yuhui's Journey" will no longer be under the surname Yu but will officially be under the surname Dong.

Dong Yuhui Will Face Greater Challenges

According to Yu Minhong's public letter, this "separation" has been in the making for a long time. He stated that he had multiple face-to-face conversations with Dong Yuhui as early as March of this year. To ensure that "Yuhui's Journey" would have a better development platform and to avoid business conflicts and public controversies, both parties decided after repeated consultations that at the end of the fiscal year (May 31st), Yu Minhong would seek the board's approval to transfer 100% of the equity of "Yuhui's Journey" to Dong Yuhui.

Notably, shortly after the "little essay" incident, Yu Minhong revealed that he had discussed the idea of Dong Yuhui starting his own platform about a year ago (around the time Dong Yuhui became popular in 2022), but it was never implemented.

At the China Entrepreneurs Summit earlier this year, Yu Minhong reflected on the incident, stating, "I have a decent ability to direct the course of things, but my ability to make decisive decisions and handle issues boldly when they arise is far from sufficient."

Clearly, Yu Minhong’s decisive actions back then were not enough; he only considered placating his top anchor by providing a larger platform without fundamentally solving the problem. Especially this year, Oriental Selection seems to have become accustomed to putting internal issues in the public eye, subjecting them to public debate, scrutiny, and criticism. This has led to internal conflicts becoming public and escalating into widespread online events, causing irreparable damage to the company.

Critics argue that today's Oriental Selection resembles a "commercial giant baby," continually depleting the goodwill Dong Yuhui accumulated in the early stages. Such behavior is not typical of a mature publicly listed company. This also explains why, after several trending topics, many people have become disillusioned with Oriental Selection. Yu Minhong should lead Oriental Selection in learning to solve internal problems internally.

In Tang Chen's view, one of the main reasons Yu Minhong made such a decisive choice this time is that "Oriental Selection is currently in disarray." The external public opinion and his internal struggle forced him to make a quick cut.

He also wrote in the public letter, "My appearances in front of the 'Yuhui's Journey' camera have decreased mainly because whenever I appear, there are dense attacks; I also dare not appear in front of Oriental Selection's cameras because, once I do, there are also dense attacks. I am caught in a dilemma, and supporting the company's development as the founder of Oriental Selection has become extremely difficult."

From helping Dong Yuhui build his own platform to letting Dong Yuhui go solo, Yu Minhong has been quite fair. After all, business is business, and personal matters are personal.

However, for Dong Yuhui, he will face greater challenges. As he stated in his public letter, "Leaving the shelter of the port, 'Yuhui's Journey' will set sail alone on the vast ocean starting today. The future is unpredictable, and we can only give it our all."

The foremost challenge ahead is the restructuring of the supply chain. This issue first surfaced early in the year shortly after "Yuhui's Journey" began broadcasting. Just three days after the new account went live, it had to halt streaming for a day because there was nothing to sell. The topic "Yuhui's Journey halted streaming for a day due to lack of items to sell" even trended on social media, hanging on the trending list for most of the day and currently has 110 million reads.

Specifically, during the first three days of broadcasting, "Yuhui's Journey" listed a total of 309 items, with nearly half (41.76%) being food and beverages, followed by 23.62% fresh produce. Books and educational materials accounted for 12.3%. These listed items did not include any proprietary products from Oriental Selection and even had some overlap with the main account’s selections. At first glance, this suggests some internal competition between the two.

Tang Chen has analyzed that the importance of the supply chain for live-streaming e-commerce cannot be overstated. While still under the framework of Oriental Selection, the supply chain for "Yuhui's Journey" was mainly managed by Oriental Selection. According to the management of Oriental Selection, the supply chain and personnel incentives for "Yuhui's Journey" were controlled by Oriental Selection, while Dong Yuhui had the authority to decide what to sell and what not to sell.

Given the current situation, an ideal scenario would be for the now-independent "Yuhui's Journey" to continue using Oriental Selection's self-developed information system for free. After over six months of honing his skills, Dong Yuhui has already demonstrated his management capabilities and has refined the supply chain for "Yuhui's Journey," enabling him to "sail independently on the vast seas."

Moreover, the saying "fame brings trouble" holds true. As Dong Yuhui has been gradually elevated to a pedestal, his every move is scrutinized by the public, leading to various public opinions. For example, in a recent outdoor radio program, Dong Yuhui expressed, "I am very reluctant to sell things. To be honest, I still do not enjoy this job" and "perhaps it’s due to my personality and previous career." While Dong Yuhui feels that his work has meaningful support, it does not bring him joy. These statements directly caused Oriental Selection's stock price to drop by more than 10%.

Objectively speaking, for a long time, Oriental Selection and Yu Minhong have shielded Dong Yuhui from much criticism. Yu Minhong has become so wary of criticism that he candidly mentioned he now speaks very cautiously, having been insulted online more times than in a hundred lifetimes combined, eventually leading him to disable comments on Douyin.

Traffic can elevate a person to fame, but it can also create a deadly vortex. This is an unavoidable challenge for the independent Dong Yuhui and "Yuhui's Journey." Besides needing to cherish his reputation, he must also balance administrative management with sales. Beyond this, issues like sales targets, the influencer path, and personal demystification seem less critical.

Looking at the entire live-streaming e-commerce industry, Dong Yuhui's solo venture does not significantly impact the broader market. What people are anticipating is that his "non-mainstream" approach to selling can bring more new stories and new value spaces to the industry. Perhaps this is the greatest expectation the public has for Dong Yuhui's independent journey.

Now, Yu Minhong has truly completed the "de-Dong Yuhui-ification" process, and the "Chinese Partner 2.0" version has played out a storyline that fits the era of traffic. In some ways, this six-month buffer period might not have been a bad thing for Oriental Selection. Its business model has been solidified—not relying on major hosts, not functioning as an MCN (Multi-Channel Network), but focusing on self-operated products, with New Oriental as its backbone. Moving forward, as long as Yu Minhong stabilizes the situation, Oriental Selection will remain an important player in the live-streaming e-commerce sector.

Interestingly, after the announcement of Dong Yuhui's departure, many netizens left comments on the Douyin account of Oriental Selection's Xiao Sun, saying: "Teacher Sun, today is a good day. We look forward to your return to the live stream soon."