Source: Visual China
Author 丨 Zhang Rui
Edit | Kang Xiao
Produced | Shenzhen Network Tencent News Xiaoman Studio
Since the implementation of the double reduction for half a year, listed education companies such as New Oriental and Good Future have successively ushered in the most difficult financial reporting season. On February 22, 2022, both Good Future and New Oriental welcomed unaudited financial reports for the year ended November 30, 2021. Among them, Good Future lost $99.4 million in the third fiscal quarter of fiscal 2022 and New Oriental had a net loss of $876 million for the six months ended November 30, 2021.
Stop K9 subject training, high school discipline training facing strong supervision of education companies are like being cut off, exploring new business directions has become the key to self-help and transformation of education companies, and every step of the founder as the "main backbone" has become the focus of the industry.
"I don't want to develop myself into a live streamer, only if the team itself is strong, the business can continue to develop." I have more important things to do," Yu Minhong, founder of New Oriental, confided in an article titled "Old Yu Gossip".
In strong contrast to this sentence, since the official opening of the New Oriental Agricultural Live Broadcasting Business, Yu Minhong's work focus has begun to migrate to live streaming with goods, becoming the traffic responsibility of New Oriental Live Broadcasting.
At 8:00 p.m. on December 28, 2021, Yu Minhong officially started the journey of live streaming agricultural products on Douyin, and stepped into the ranks of live streaming anchors. According to Feigua data, Yu Minhong's first live broadcast of agricultural products with goods sales was about 4.604 million. This live broadcast became a watershed moment for Yu Minhong's identity transformation.
Previously, Yu Minhong carried many labels such as "godfather of studying abroad", educators, entrepreneurs, founders of two listed companies, etc. After this live broadcast, the labels such as Internet celebrities and anchors with goods followed.
In their own vibrato live broadcast room live broadcast with goods to the East selection of momentum, and the Oriental selection of live broadcast room even wheat to its guide powder, in their own public number attached to the Oriental selection of advertisements, wearing a sweatshirt marked with the "Oriental Selection" huge logo in and out of the live broadcast room, to the Oriental selection of characteristic agricultural product resources ... , Yu Minhong like the Oriental selection of traders, into the inventory, powder, field control, review and other live streaming with goods in all aspects.
In the fifth life year of his life, Yu Minhong, who should have enjoyed a peaceful and smooth year, had to choose to start again because of the huge earthquake in the education and training industry. "No matter what happens in life, as long as we still have time and determination, we will definitely have the opportunity to start again," Yu Minhong often encouraged himself.
However, compared with the exploration of quality literacy education, research and education hardware, the road of live streaming with goods seems to be far away from education, but under the eight-character motto of "cultivating oneself and benefiting others" of New Oriental, it is very close to the great education.
"Shirtless" with goods
In the last week of 2021, Yu Minhong is busier than before. In addition to participating in ten internal meetings of all sizes within the company, Yu Minhong focused more on the "New Year Festival".
In the course of a week, Yu Minhong participated in two live broadcasts with goods. One is the activity of "Beijing-Tianjin-Hebei New Year Goods Turning the Sky" arranged by Beijing Radio and Television Station, and the other is to help "Peking University Lamb Brother" sell mutton in the oriental selection live broadcast room. After two nights of drinking, Yu Minhong contributed hundreds of thousands of sales to these two live broadcasts.
"Participating in the live broadcast activities of Beijing Radio and Television Station is mainly to help Dongfang selection to do resource docking in the later stage," Yu Minhong revealed in his public account.
In addition to personally streaming the goods, Yu Minhong will also "airborne" the Oriental Selection Live Broadcast Room from time to time, broadcast "drums and calls" for the New Oriental Agricultural Products, increase the exposure of the Oriental Selection Live Broadcast Room, and guide fans to the Oriental Selection Live Broadcast Room.
Oriental Selection is the only live broadcast platform for agricultural products of New Oriental Group and New Oriental Online, and the main operating body is Oriental Preferred (Beijing) Technology Co., Ltd., a wholly-owned holding company of New Oriental. The person in charge of Oriental Selection is Sun Dongxu, executive director and chief executive officer of New Oriental Online.
Since the official launch of the broadcast in the Douyin live broadcast room on December 28, 2021, Oriental Selection has opened the "daily broadcast" mode. From January 7, 2022, Oriental Selection maintains a live broadcast frequency every 2-3 days. In terms of live broadcast sales, according to gray dolphin data, in the nearly 90 days as of February 10, the number of fans in the live broadcast room of Oriental Selection was 166,000, and the sales volume was 4.501 million yuan.
The sales of more than 4 million yuan in 3 months are obviously far from Yu Minhong's initial expectation of "doing tens of billions of dollars a year" for live streaming.
Pulling the time back to October 2021, Yu Minhong, who is still thinking about the way out of New Oriental, said at the company's internal meeting: "Wei Ya can sell more than 20 billion yuan a year, and the annual income of New Oriental primary and secondary school business is so much, can I sell tens of billions of dollars a year with dozens of teachers?" ”
It turns out that there is only one Via who can sell more than 20 billion yuan a year. In the field of live streaming with goods, where capital has been deeply involved, it is not easy for ordinary people to think of live streaming goods.
The anchors of the Oriental Selection Live Broadcast Room are all selected from the New Oriental Teachers. According to a person familiar with the matter, New Oriental Group officially launched the MCN project in October 2021 to recruit and select anchors for all employees. In addition, the threshold for selecting anchors this time is very high, not only for the image, personality, and language expression, but also for a certain amount of self-media experience accumulation.
Even if the anchors of the Oriental Selection Live Broadcast Room have more advantages than ordinary people in terms of image, personality and language expression, in the live streaming with goods in which "traffic and supply chain are king", spending money to "throw in streams" has become the standard for live streaming with goods.
"The key to the problem is that in the matter of doing live streaming with goods, Teacher Yu's attitude is as conservative as doing online education, and he basically does not spend money to obtain customers (streaming), which has become the crux of the slow growth of the number of fans selected in the East," a number of industry insiders who contacted Yu Minhong told Deep Web.
However, a relatively obscure reason why Oriental Selection does not spend money to buy traffic is that it has the blessing of Yu Minhong's own IP effect, which saves a lot of investment costs for the early stage of the Oriental Selection live broadcast.
According to the data of the gray dolphin, the peak of fan growth in the Oriental Selection Live Broadcast Room is related to Yu Minhong's direct participation or Lian Mai. For example, on December 28, 2021, the reason why Oriental Selection rose by nearly 40,000 fans in one night was because Yu Minhong simultaneously broadcast live in his live broadcast room (8.016 million fans in Yu Minhong's Douyin live broadcast room) that night, and frequently called call to the Oriental Selection live broadcast room during the live broadcast.
Not only oriental selection, a considerable part of the exposure of many new oriental businesses stems from the "IP" effect of Yu Minhong, the founder of New Oriental. In 2016, Yu Minhong made a cameo appearance as an English teacher in the movie "Brother Sleeping on My Top Bunk Bed", which saved New Oriental millions of dollars in advertising implant costs.
This IP effect will be infinitely amplified during the shock period of the education and training industry. Nandu Big Data Research Institute has done combing, since the official implementation of the "double reduction", New Oriental and Yu Minhong have been on the hot search at least 28 times, of which Yu Minhong accounted for 8 times, and in the two years from 2019 to 2020, New Oriental and Yu Minhong were only on 4 hot searches.
"Teacher Yu is not easy, shouldering the future of the two listed companies, there is no reluctance to leave the employees, but also for the more than 50,000 employees who stayed to find a way out," some industry insiders close to Yu Minhong told the "Deep Web".
The hardest year
Yu Minhong was born in 1962, and this year is the fifth year of his life. Folk custom refers to the year of the life as the "year of the kan'er", and in this year, more variables may be encountered. But in Yu Minhong's cognition, the most difficult year for himself and New Oriental is 2021, which has passed.
With the "Opinions on Further Reducing the Homework Burden and Off-campus Training Burden of Students in the Compulsory Education Stage" officially landed on July 24, 2021, the for-profit discipline training industry that has existed for more than 30 years has been dusted off and become history. This is a fatal blow to all education companies involved in off-campus training in disciplines.
As of the close of U.S. stocks on February 10, 2022, New Oriental's share price was $1.6 per share, with a total market capitalization of only $2.715 billion, a 91.9% decline compared to its high of $19.974 per share.
"2021 is the hardest year for us, but we have withstood the test," Yu said.
In this year, New Oriental cleared more than 1,000 teaching points; donated about 150,000 sets of desks and chairs and teaching equipment to primary and secondary schools in rural areas and mountainous areas; and completely stopped New Oriental's ground K9 training business and online K9 training business.
What concepts have been cleared of more than 1,000 teaching points? According to the annual report of the 2021 fiscal year released by New Oriental, as of May 31, New Oriental had a total of 122 schools, 1547 learning centers and 11 bookstores across the country. In other words, there are only more than 500 teaching points left in New Oriental.
New Oriental, which has cleared about two-thirds of the teaching center, is like a major operation, a series of "sequelae" are inevitable, and the first "hidden disease" exposed is loss.
On the evening of February 22, 2022, New Oriental-S announced its unaudited financial results for the six months ended November 30, 2021, with a net loss of US$876 million and net revenue of US$1.967 billion for the period. This was a profit of $229 million for the same period last year.
Looking at New Oriental's net profit in the past 20 years, it can be seen that this will become the first annual loss of New Oriental since its listing in 2006. Even in 2012, when muddy waters were short and attacked, New Oriental had a net profit of 136 million yuan in the fiscal year.
"Finding opportunities from a crisis is what an entrepreneur should have," Yu Minhong once summed up in his book "I Was on the Verge of Collapse."
For the short-selling in the muddy waters at that time, Yu Minhong organized a dinner party and gathered a group of entrepreneur friends to lunch, hoping that they could buy new Oriental's stock and stabilize the stock price.
"Old Yu, just make it clear, whether muddy waters' accusations against you are true or not, we fully believe you." If it is true, you tell us the truth, and we will help you find a way to solve it together; if it is not true, that is, you are 100% sincere, then we will buy New Oriental's stock and help you pull the stock price back. ”
For the questioning of friends, Yu Minhong said a sentence: "New Oriental has never made false accounts, this is my bottom line." ”
That night, several companies of Yu Minhong's entrepreneurial friends bought nearly $300 million in New Oriental stock, laying the financial foundation for the reversal of the battle.
For the flow of funds, due to the run during the SARS period, Yu Minhong has a superhuman caution and vigilance about capital reserves.
"The company must have enough money on its books to meet the needs of a day when New Oriental suddenly goes out of business or suddenly does not do it, the money can refund all students' tuition fees and pay all employees' departure wages," Yu Minhong has said publicly on several occasions before.
This vigilance and caution have become the last "insurance bolt" for New Oriental to encounter industry shocks, which not only guarantees the refund of students, but also provides protection for bond repurchases.
On January 26, 2022, New Oriental-S announced that the company further repurchased the bonds, and as of January 26, 2022, the total principal amount repurchased was $171.577 million, accounting for about 57.2% of the initial principal amount of the bonds. The Company will cancel the repurchased Bonds in accordance with the terms of the Bonds, the Deed of Trust and the Agency Agreement. Upon cancellation of the repurchased bonds, the outstanding principal amount of the bonds will be US$128.423 million, representing approximately 42.8% of the initial principal amount of the bonds.
For New Oriental's 2021 "crossing robbery", Yu Minhong gave himself and his company a passing score. For 2022 and beyond, Yu Minhong did not make any predictions.
"No one can really predict the future. What a person can do is to determine the big direction of life, and then go on without hesitation. All changes, changes, and changes are the proper meaning of the road. Adapting to change, but not losing the direction of life, is the most important thing. Everything else is left to the years, and the years will give us the best answers," Yu Minhong elaborated.
For his own positioning, Yu Minhong, who does not want to be an Internet celebrity with goods, positions himself as an "entrepreneur farmer". "Entrepreneurs and farmers can mobilize more systems and resources, can see this matter from a higher perspective, and provide more help to the people."
"Farmer Entrepreneur"
Yu Minhong was born into an ordinary rural family in Huqiao Village, Xiagang Subdistrict, Jiangyin City, Jiangsu Province. To this day, on the walls of Mr. Yu's office are still photographs of his rural hometown — two uninhabited, crumbling tiled houses in a field of barren grass.
Yu Minhong has never shied away from his peasant origins, and has mentioned his feelings for the countryside in many public occasions.
"I have been doing farm work for the first two years of re-study, and at the age of 16, I won the title of excellent walking tractor driver in the commune, and I have a deep affection for the countryside, so my future focus is still in the countryside," Yu Minhong once said in the live broadcast.
New Oriental Online established Oriental Preferred Transformation to do live streaming of agricultural products, which also stems from Yu Minhong's rural complex.
"Teacher Yu Minhong, after preliminary research, found that our country has a number of excellent agricultural enterprises and a group of new farmers who keep pace with the times, and these agricultural enterprises need the support of various resources, if New Oriental Online can do a good job of this link, it will find its own positioning", Sun Dongxu once elaborated on the launch of Oriental Selection in the internal meeting of New Oriental Online.
This positioning is the "large-scale agricultural platform" in Yu Minhong's plan, integrating upstream and downstream resources, transforming farmers, making young farmers willing to return to the countryside, so that more left-behind children can grow up in the company of their parents and support the cause of rural revitalization.
Industry sources who have been in contact with Yu Minhong revealed that since July 2020, when Yu Minhong visited Gansu's cultural and natural scenic spots, he had the idea of selling agricultural products for farmers. At that time, Yu Minhong, who went to the Minqin Hongqi Valley Ecotourism Village, was invited by sweet potato farmers to help promote local honeydew melons online. At 4:30 p.m. on the same day, Yu Minhong, who was dressed plainly, wearing a straw hat and holding a honeydew melon, appeared in his douyin live broadcast room and sold six thousand boxes of honeydew melons in an hour and a half, which became a footnote to New Oriental's attempt to set up an agricultural product platform.
However, in the eyes of Yin Qiang, vice president of New Oriental Group and CFO of New Oriental Online, live streaming is one of the attempts of New Oriental Online, rather than the company's overall transformation to do live streaming.
"On the one hand, we have the business of the original university as the foundation, and there is stable growth and stable cash flow every year. On the other hand, as a listed company, we must have a new key business and gradually make it bigger, so we are still more optimistic about the industry of live streaming with goods", Yin Qiang elaborated.
Industry insiders who have contacted Yu Minhong revealed to the "Deep Web" that "the agricultural products with goods are only the first step in the selection of oriental products, out of the requirements of development and profitability, oriental selection will gradually expand the category of live streaming with goods, and will not be limited to agricultural products with goods, after all, New Oriental Online is still a listed company, investors and capital have requirements for the profitability of listed companies."
After 60 years of going around, Yu Minhong came out of Huqiao Village, Xiagang Street, Jiangyin City, and finally chose to return to the origin of "farmers". New Oriental, which has accompanied him through thirty years of entrepreneurial history, has returned to the basic proposition of how to survive.
"Will anyone remember me in many years, remember that I came to this world?"
On January 26, 2022, Yu Minhong posted a video with the special effect of getting old on his short video account. Yu Minhong in the video wears reading glasses, a white beard, a smile, and the background music of "Many Years Later", which has the artistic conception of "incorruptible and old, still able to eat".
For Yu Minhong and New Oriental, 2022, when the K9 business is stopped and the high school subject training is facing strong supervision, is the starting point. "Almost everything from scratch is a new long march that requires me and my team to plan for a long-term struggle," Yu concludes.
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