Reporter Li Zhu and Liu Wang report from Beijing
Recently, Oriental Selection (01797. HK) has once again been involved in controversy over issues related to the "demand and collection of pit fees and publicity fees". On June 29, Dongfang Selection issued a statement saying that it had not asked the government for publicity fees, and insisted on not charging so-called pit fees to any enterprises and businesses.
The reporter of "China Business Daily" noticed that since the transformation of live broadcast e-commerce, the words and deeds of the anchors and their related leaders selected by Dongfang have been magnified to the front of the stage to be scrutinized by the public, especially the establishment of "Walking with Hui" last year, so that its internal operation and management have repeatedly become the focus of public opinion.
Live e-commerce and supply chain are two types of business, whether it is Walmart, a leading retail company that is good at supply chain, or Simba's team, which has established Xinxuan Group, they are trying to combine the two. Therefore, in the original model conceived by Dongfang Selection, it may be the business model of "e-commerce live broadcast drainage in front of the stage + deep cultivation of self-operated products in the back of the stage", but in the face of the current problems exposed by traffic coercion, does Dongfang Selection have a new coping strategy? In this regard, the reporter contacted and interviewed Dongfang Selection, but the other party did not respond positively as of press time.
Zhuang Shuai, an expert in the retail industry and founder of Bailian Consulting, told reporters that on the one hand, heavy asset self-operation can control goods and prices well, ensure spot sales and prices are more advantageous, and on the other hand, it can do its own brand and membership e-commerce (or physical membership stores). However, the requirements for funds are high, and the requirements for talents and organizational management are also very high.
The "Internet celebrity" that has been repeatedly searched
"I reject the word 'internet celebrity' very much." In a talk show, Dong Yuhui expressed so.
As the leader of the team of "Walking with Hui", Dong Yuhui has talked with many cultural celebrities in the past six months, and the number of fans of the Douyin platform account of "Walking with Hui" has also exceeded 20 million.
In the eyes of industry insiders, Dongfang Selection has its own "Internet celebrity" gene. Two years ago, Dongfang Selection became popular because of the bilingual knowledge sharing live broadcast in Chinese and English; At the end of last year, the "small composition incident" also sparked heated discussions, and then the "Walking with Hui" account was established, Dong Yuhui became the leader of the team, and there have been many disagreements between fans on social platforms.
Throughout June this year, Dongfang Selection also continued to be in turmoil due to the remarks of relevant personnel. Yu Minhong, the founder of New Oriental, publicly mentioned that "Oriental Selection is doing a mess now, and does not have any ability to make suggestions", and later issued a letter of apology to Oriental Selection's customers, shareholders and investors.
These public opinions have sparked controversy. According to the relevant data of Baidu Index and WeChat Index, the discussion heat of Dongfang Selection and Hui's peers has shown an upward trend in the past month. According to the data of the third-party platform Cicada Mother, the total number of fans in the Dongfang Selection live broadcast room has decreased by about 380,000 from 30.411 million on May 30 to July 1, and the number of fans who walk with Hui is in a state of increasing status.
After the above problems were continuously exposed, not only did the consumer market pay attention sharply, but also caused stock price fluctuations. The reporter noticed that since June, its share price has been falling, and as of the close of Hong Kong stocks last week, the share price was HK$12.62 per share.
The business model is tested
On June 28, "Dongfang Selection Anchor Live Room Publicly Expressed Dissatisfaction" rushed to the hot search on Weibo. The incident originated recently, as one of the top anchors selected by Dongfang, Dunton publicly expressed his disappointment with the company in the live broadcast room.
It is reported that on June 27, Dongfang Selection's clothing matrix number was launched, and Dunton thought that the management ignored the feelings of the anchor, mentioning that he only knew a few days ago that he was also going to participate, and the company arranged the shift on its own "without consulting with the anchor" in advance; On the same day, the Oriental Selection Announcement was suspended for one day. On June 28, Dunton publicly responded: "We think we can say that the company is not good to point out." ”
Back to last year's "small essay incident", the company's internal contradictions were made public in the live broadcast room, which may indicate that Dongfang Selection has problems in the internal management of the company.
At present, Dongfang Selection has not yet responded to whether the team (product selection and supply) with Hui and Dongfang Selection is in an independent state.
According to Li Chengdong, a senior e-commerce expert, the total GMV (commodity transaction volume) of Dongfang Selection depends on the total number of users, whether it is the live broadcast room of Dongfang Selection or the live broadcast room with Hui, it is an IP account of an enterprise, so it has little impact in terms of traffic, and even attracts more traffic due to the opening of new accounts.
However, due to the highly personalized nature of IP and the centralization of business value, when the IP owner and the actual control of the enterprise are inconsistent, the operation has great instability. Therefore, how to precipitate personal influence into product brands and realize them, and continue to deliver nutrients to enterprises with stable business and cash flow is a common problem faced by the live broadcast e-commerce industry.
In addition, judging from the previous layout of Dongfang Selection, it may be necessary to let the asset-light live broadcast traffic drive the sales of self-operated goods, but the construction of the supply chain is much larger than the former, and it is not easy to achieve mutual support between the two.
On October 17 last year, Dongfang Selection announced the launch of a paid membership business, which is similar to the membership card system launched by large retailers such as Sam's and Hema and large e-commerce platforms such as JD.com and Taobao. From the perspective of membership price alone, the membership price is higher than that of e-commerce platforms such as JD.com and Taobao, and lower than that of offline membership-based supermarkets such as Hema and Sam's. Regarding the performance of this business, Dongfang Selection did not respond to reporters.
Zhuang Shuai pointed out that at present, the online membership system is mainly based on the paid membership system of the integrated e-commerce platform, such as Jingdong Plus and Taotian 88VIP, and the independent membership e-commerce platform such as the No. 1 membership store is more difficult to operate, but the more competitive is the combination of offline membership stores and independent membership APP, which will become the dominant model in the future.
Liu Ge, a senior researcher at the Chongyang Institute for Financial Studies, once pointed out that the key to the success of a new business model lies in whether it can reduce transaction costs. This still applies to Oriental Selection.
It is worth mentioning that Dongfang Selection is still actively engaged in the construction of the supply chain. In January last year, Dongfang Selection announced an investment of 17.52 million yuan for the expansion of its self-operated sausage factory. In April this year, Dongfang Selection tested the waters of instant retail, not only launched the "Hour Delivery" business for the Beijing special session, but also cooperated with Jingdong Logistics to create the "Front Warehouse Model", and planned to replicate the "Front Warehouse + Hour Delivery" model to more cities across the country.
According to Dongfang Selection, in the second half of fiscal year 2024 (December 2023 to May 2024), the GMV of Dongfang Selection's self-operated products will exceed 3.6 billion yuan; The total number of self-operated products has exceeded 400, of which eighty percent are agricultural products. However, the reporter also noted that the first half of the 2024 fiscal year report showed that its revenue was 2.8 billion yuan and its net profit was only 250 million yuan, and mentioned that the main reason for the decline in net profit was the increase in a large number of sales and marketing expenses.
Industry experts believe that the use of organizational system to build a platform and achieve business innovation not only requires high funds, but also has high requirements for talents and organizational management.
The reporter noticed that at present, Oriental Optimal (Beijing) Technology Co., Ltd., which is associated with Oriental Selection, is recruiting positions such as "warehouse manager" and "logistics specialist".
Changes in the market environment
Previously, the membership paid territory selected by Dongfang Selection happened to be a fast-growing e-commerce market. But the situation in the market is also changing.
On the one hand, the live broadcast e-commerce track is also in a fierce fighting situation, in addition to several top anchors and their teams, other e-commerce players are also eager to get a piece of the pie. Zhuang Shuai pointed out that at present, online e-commerce is highly concentrated, and trillion-level platforms include JD.com, Taotian, Pinduoduo, Douyin and Kuaishou. In this competitive market environment, new technologies also have a great impact on e-commerce, and new models such as Baidu digital human live broadcast, Xiaohongshu grass community e-commerce, and video number social e-commerce have emerged.
Zhang Yi, CEO of iiMedia Consulting, said that Dongfang Selection needs to grasp the dynamic changes of consumers and keep up with consumer needs when laying out its business. He mentioned: "The most important thing is to do a good job of data analysis for the audience watching their live broadcasts and solve their rigid needs, avoid the existing homogeneous competition, and find new products and opportunities for breakthroughs." ”
In addition, it is reported that Walking with Hui will focus on the direction of cultural tourism in the future. For the news, Dongfang Selection has not yet responded. However, Dong Yuhui, as the vice president of New Oriental Cultural Tourism Group, Chongqing Cultural Tourism wrote "3.28-6.28@Dong Yuhui, we have been waiting for you" on the video title of his official account, indicating that it was very difficult to win Dong Yuhui's trip to Chongqing this time; The "Walking with Hui" Douyin account announced that it will start live streaming in Chongqing from July 2 to 4.
In addition, the reporter noted that according to the official public account of New Oriental Cultural Tourism, since late March, New Oriental Cultural Tourism has frequently contacted various local cultural and tourism departments and signed a number of strategic cooperation agreements with them. On May 13, New Oriental Cultural Tourism Group signed a strategic cooperation agreement on omni-channel marketing and promotion of the research industry with Fliggy Travel, Zhejiang Provincial Museum Society Research Committee and other enterprises at the 2024 Zhejiang Provincial Research and Tourism Industry Exchange and Co-creation Conference, which is the first public information showing that New Oriental Cultural Tourism Group has strategic cooperation with online travel platforms.
Dai Bin, president of the China Tourism Academy, wrote an analysis that the tourism economy based on the domestic market and the coordinated development of inbound and outbound tourism is moving from rapid recovery to a new stage of prosperity and development, and it is expected that the number of domestic tourists and domestic tourism revenue will exceed 6 billion and 6 trillion yuan respectively in 2024.
(Editor: Yu Haixia Review: Li Lin Proofreader: Yan Jingning)
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