Shulou(Shulou.com)11/24 Report--

Oriental selection ushered in another era of live broadcasting, when the income of anchors cooled and self-management became the way to survive.

Author / IT Times reporter Sun Yan

Editor / Sun Yan

The best part of the live broadcast took place in October 2022. A month after Li Jiaqi's return, Luo Yonghao took the lead in making a friend live on Taobao on the eve of Singles Day. The "walls" of live e-commerce have been broken, and the "poaching war" has raged between Taobao Live and Douyin.

And the best part of this time is the selection of Oriental, a dark horse in the live broadcast circle. Six months ago, the former New Oriental teacher upset the balance of the "four Heavenly Kings" era with a bilingual live broadcast. Six months later, Oriental Select handed over its report card: the share price of parent company New Oriental online has soared 23-fold in the eight months since May last year.

However, the myth no longer seems to continue. New Oriental online shares fell 37% in just over half a month, which has something to do with the high-level reduction of senior executives. Sun Dongxu, CEO of New Oriental online, and Yin Qiang, CFO, reduced their holdings to nearly HK $279 million.

Compared with the top three listed companies in the live broadcast circle, Oriental selection is the most profitable. The proprietary product model seems to be starting to work, but the more immediate reason is that Oriental selection is one of the few companies in the industry that does not share the turnover with the anchors.

When Volkswagen questioned whether it was fair to Dong Yuhui to take only a salary, Dong Yuhui personally explained that his salary was comparable to that of senior executives, and Yu Minhong fulfilled his promise to issue shares to himself. Soon after, Dong Yuhui won the "Deep ploughing and thick planting Award" at the 2023 Beijing Pinggu Talent Development Conference, and it was rumored that he received an one-time after-tax bonus of 1 million yuan, a Beijing hukou and 150 square meters of self-occupied housing. After that, both Oriental selection and Dong Yuhui denied this: "both cash and house are rumors" and "there is a cash reward of 100000 yuan, but I have already rejected it."

Dong Yuhui's income has been searched for many times, which has triggered a discussion about the cooling of the live broadcast.

Weiya and Sydney, who "disappeared" because of tax issues, Luo Yonghao, who "withdrew" after paying off 600 million yuan of debt, and Li Jiaqi, who gradually faded out to support the new anchor. Dong Yuhui represents a new era for live streaming with goods. There is no myth of personal wealth with goods. With the rising cost of live broadcasting, live broadcasting has become another channel in addition to offline stores and online shelf e-commerce.

"it will slowly cool down and return to normal in the next few years." Practitioners of live streaming with cargo circles generally believe that.

1. Why Oriental selection is the most profitable

In the live broadcast with goods circle, three listed companies rank in the top three, New Oriental online, which is about to change its name to "Oriental selection", Century Ruike, which makes a friend and goes public through backdoor listing, and Telescope Technology, which is tied to more than 30 star anchors.

Comparing the three financial reports, it is found that Oriental selection is the most profitable listed company for live e-commerce.

Judging from the scale of GMV for the whole of last year, Qianwang Technology ranked first with 15 billion yuan, making friends ranked second with 70 to 8 billion yuan, and Oriental selection ranked third with 4.8 billion yuan. However, in terms of net profit, Qianwang Technology expects a loss of 170 million yuan to 255 million yuan for the whole year, while the net profit of New Oriental online in the first half of 2022 (Oriental selection became popular in June last year) is 585 million yuan.

Qianwang Technology is a typical representative of shopping guide star, signing more than 30 star anchors, such as Jia Nailiang, Cecilia Cheung, Huang Shengyi, Wang Zulan, and so on, earning a share of commission and pit fees.

On one side are more than 30 stars, on the other is Dong Yuhui and other New Oriental employees, the gap in personnel costs is obvious.

When fans "mothers-in-law" fought for Dong Yuhui and rumored that he had left to work alone, the market was soberly aware that the reduction of live broadcast commission had become an irreversible trend. Xiao Han (a pseudonym), who is in charge of a live broadcast base in Hangzhou, told the IT Times that the commission of imported cosmetics and other best-selling items has been reduced to 5%. Previously, the rate of commission for anchors was 20%, and the star anchors in the first echelon had to add more than a hundred thousand yuan.

A few days ago, New Oriental online announced that it plans to implement a share incentive scheme to use 10% of the shares issued to encourage, retain and attract talents, which is also a move to stabilize military morale.

two。 Self-management live broadcast with goods the general trend of the East selection depends on Dong Yuhui, but the persistence of its "money-making power" depends on its own products. The results of New Oriental online in the first half of fiscal year 2023 showed that the total revenue was 2.08 billion yuan, of which the total revenue from proprietary products exceeded 1 billion yuan, exceeding the revenue of live e-commerce, with a gross profit margin as high as 42.5%.

"proprietary products are mainly contract production costs and logistics costs, while third-party products earn distributors' share." Xiao Han believes that, "there is nothing wrong with oriental selection to choose its own products, but whether it can sell well depends on whether oriental selection can do a good job in quality control."

The threshold for self-owned agricultural products is so high that many fresh e-commerce companies did not survive the cold winter, and the Oriental selection was also overheated because of rotten peaches. Compared with Ding Dong's experience in buying vegetables, Ding Dong Buy investor and Red Pepper Venture Capital Liu Weilong believes that the main difficulty in self-built agricultural products supply chain lies in self-built cold chain logistics, which generally accounts for 20% of fresh logistics costs. 35%. In addition, agricultural products are non-standard products, strong seasonality, live broadcast with goods to bring a large number of immediate sales, will break through the supply threshold, resulting in quality control problems.

Based on the high cost of self-built logistics, Oriental selection still chooses third-party logistics. However, it has formally taken the first step of investing in suppliers to establish barriers to proprietary products.

Tianyan investigation shows that Oriental selection (Beijing) Technology Co., Ltd., which holds 100% of Oriental selection, and Jiaozuo Chenghui Food Co., Ltd. have jointly set up a new company, Oriental selection (Henan) Food Technology Co., Ltd., with a registered capital of 58.4221 million yuan. The date of establishment is February 9, 2023, of which Dongxuan holds a 30% stake. The main business of Chengcheng Food is the processing of meat products. In addition to Oriental selection, it is also a manufacturer of Fengwei, Mianye, Sanquan and other brands.

This corroborates previous reports that the Oriental selection Plan has invested 17.52 million yuan in the expansion of the Oriental selection self-operated sausage factory, which covers an area of 14000 square meters in Jiaozuo, Henan Province. The reason for choosing roast sausage is precisely because it is the highest-selling proprietary product selected by the East.

In fact, it is not only Oriental selection that realizes that proprietary products are the way to break the game.

Before the Oriental selection, Xin Youzhi, the anchor of Kuaishou, established the brand of "Xinxuan" long ago, and Kuaishou Live Live with goods also embarked on the road of "white card" under this momentum.

Luo Yonghao brought up a friend broadcast room, currently invested in reloading this brand to make self-owned shoes and clothing, and will also promote the development of jewelry and other self-supporting categories.

Even though Li Jiaqi publicly expressed his desire to make self-made make-up products a long time ago, one has not yet launched its own make-up products, but only cooperated with individual brands in the IP of the Naiva family, while Li Jiaqi himself is deeply involved in the product design of domestic brands such as Huaxizi.

3. It is actually an act of self-help for anchors to run away to find their own traffic, because businesses are soberly aware that anchors' supremacy is an unsustainable bad ecology, and there are two ways to reduce costs: one is to reduce product costs, and the other is to reduce anchors' commission.

"the live broadcast cost of some products has exceeded the cost of the product itself, and some brands even have a 'live special version', paper towels become thinner and ham sausages become 'thin'." "Capital should invest money in product research and development, not on channels, or in the hope that shopping guides will bring long-term value," Xiao said. "

Apart from businessmen, the confidence of capital is also insufficient. This is not the first time that New Oriental online has suffered a reduction. In June 2022, when Dongfang selected a circle to put its share price on the soaring high, Tencent Holdings, the second shareholder of New Oriental online, and a number of large foreign banks carried out a "clearance-style" reduction. Tencent Holdings reduced its holdings by about 74 million shares, accounting for 82.5% of its total holdings, cashing out about HK $719 million.

From Luo Yonghao to Dong Yuhui, from making friends to oriental selection, it is a traffic game for the platform to create a live broadcast giant.

Although Oriental selection has long been recommended by Douyin, traffic and data have plummeted since their peak. According to the monitoring data of Xinxiang for nearly 30 days, the average sales of Dongfang screening is 10 million to 20 million yuan, and the average number of online people is 30,000. In June last year, Oriental selection traffic peaked at one point, with average sales estimated at 63 million yuan.

For comparison, the average sales of a live broadcast on Douyin for nearly 30 days ranged from 5 million yuan to 7.5 million yuan, and the average number of people online was 6700.

In the era of the "four Heavenly Kings" of Li Jiaqi, Weiya, Luo Yonghao and Xin Youzhi, the anchor was deeply bound to the platform, but since Luo Yonghao led a live broadcast team that made friends to Taobao, the platform gradually loosened its ties with the anchor. Weiya co-anchor Qier has a unique role in Douyin, and Wang Si, the head of Weiya's three societies, also revealed on the WeChat moments on February 21 that she will explore new platforms and new businesses.

At the time of making a friend, the conjecture of Oriental selection to Amoy is also rampant, but in the end, Oriental selection did not take this step, more or less out of the consideration of traffic support.

It is better to go to sea than to "rob people" between Taobao, Douyin and Kuaishou. After TikTok set up platforms in the United States, Southeast Asia and other places across the border, anchors began to plan to go out to sea.

"going out to sea is a general trend. Domestic well-known MCN institutions are discussing cooperation with us, but only Chinese institutions and brands have made it very painful." Uncle Li went to Vietnam to do a live broadcast as early as 2019. He invested 5 million yuan before and after, but it was difficult to make a profit.

This article comes from the official account of Wechat: IT Times (ID:vittimes), by Sun Yan

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