E-commerce / RetailChina
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JOURNEY · DETAIL
New Oriental/East Buy: Yu Minhong's Self-Rescue Journey from Education Giant to Live-Streaming E-commerce Post-'Double Reduction'
Founded: Yu Minhong · New Oriental Education & Technology Group / East Buy Holding Limited
JOURNEY
Key Fields
FIELD STAMPSIndustryE-commerce / Retail
RegionChina
ScaleGiant
ChannelOther
Origin
In 1993, Yu Minhong founded New Oriental, starting with TOEFL and GRE study-abroad English training. Leveraging large-class instruction and the 'star teacher' IP model, it grew into one of China's largest education and training institutions. It listed on the NYSE in 2006, and its subsidiary, Koolearn Technology, listed on the HKEX in 2019. In July 2021, the 'Double Reduction' policy was implemented, halting all K9 academic after-school tutoring. New Oriental's market value evaporated by nearly 90%, forcing the closure of teaching centers, tuition refunds, and the layoff of tens of thousands of employees. Yu Minhong chose to retain the listed entity, pivoting the communication skills and brand trust accumulated from his teaching background toward agricultural products—a field familiar to his rural roots—and decided at the end of the year to enter live-streaming as the group's final large-scale self-rescue experiment.
Milestones
2006
Startup Phase PMF
Yu Minhong founded New Oriental School in Beijing in 1993, entering the market with TOEFL and GRE study-abroad training. It became an industry leader through its large-class star-teacher system and inspirational lecture culture. In September 2006, New Oriental listed on the NYSE, becoming the first Chinese education and training company to list in the U.S., validating the business model of study-abroad demand paired with star-teacher IP instruction.
2019
Capital Expansion Growth
New Oriental's online arm spun off and listed on the HKEX, focusing on online education. This created a dual-platform structure of offline training and online education. The stock was highly sought after upon listing, and Yu began investing in K12 online large-class courses and foreign teacher live-streaming. However, the online business continued to lose money for the next two years, laying the groundwork for the organizational structure needed for a rapid pivot later.
2021
Policy Clearance Failure
In July 2021, the 'Double Reduction' policy was released, prohibiting academic training institutions from listing for financing or engaging in capital-driven operations. New Oriental's core K12 business was shut down entirely. The company refunded tuition, closed teaching centers, and laid off tens of thousands of employees. Its market value evaporated by about 90% from its peak. Yu Minhong admitted in an internal letter that the era had ended and donated nearly 80,000 sets of desks and chairs to rural schools.
2021
Transformation Pilot Turning Point
New Oriental officially announced the launch of the East Buy live-streaming platform. The affiliate company, Dongfang Youxuan (Beijing) Technology Co., Ltd., was registered in October 2021 with a registered capital of 10 million yuan. On December 28, Yu Minhong hosted the first agricultural product live stream, generating over 5 million yuan in sales. However, this was significantly lower than the hundreds of millions generated by top streamers, and for the first six months, daily sales hovered in the hundreds of thousands, creating immense internal pressure.
2022
Traffic Explosion PMF
Streamer Dong Yuhui went viral for selling products while teaching bilingual knowledge. East Buy's Douyin followers surged from millions to over 10 million within a week, and daily GMV hit tens of millions. New Oriental's stock price multiplied within days, validating that the 'classroom-style' live-streaming content format could successfully drive e-commerce conversions. The company confirmed self-operated agricultural products as its strategic core.
2024
Pain of De-influencerization Failure
In December 2023, the 'Small Essay' incident triggered a public conflict between Dong Yuhui and management. In July 2024, Dong Yuhui left with the 'Yuhui Tongxing' brand, becoming completely independent with a payout of approximately 76.58 million yuan. East Buy lost its biggest traffic driver, causing both its stock price and GMV to plummet. The company faced losses or thin margins for several quarters in FY2024-2025, leading the market to question whether East Buy had any value without its top streamer.
2026
Product Company Validation Turnaround
In FY2026, East Buy's total revenue reached 5.701 billion yuan, up 29.8% year-on-year, with operating profit turning from loss to 663 million yuan. Net profit jumped from approximately 6 million yuan in the previous fiscal year to the 520 million yuan level. Self-operated product GMV reached 5.4 billion yuan, accounting for about half of the total GMV. At the first supplier summit, Yu Minhong publicly defined East Buy as a product company rather than a live-streaming company, marking a shift from traffic-driven to supply chain-driven operations.
Turning Points
- July 2021: 'Double Reduction' policy implemented; core K12 business shut down, forcing Yu Minhong to pivot from education to live-streaming e-commerce for survival.
- June 2022: Dong Yuhui's bilingual live-streaming went viral; East Buy's followers grew from millions to tens of millions in a week, unexpectedly validating the traffic model.
- July 2024: Dong Yuhui departed with 'Yuhui Tongxing', forcing East Buy to complete its de-influencerization early and bet on self-operated products and supply chains.
- FY2026: Net profit soared from 6 million yuan to over 520 million yuan, proving that a model relying on product repurchases can be profitable without a super-streamer.
Failures & Pitfalls
- 2021 to H1 2022: East Buy's first stream sold only 5 million yuan, followed by months of daily sales in the hundreds of thousands, widely dismissed by outsiders as an amateur attempt by an education boss.
- End of 2023: The 'Small Essay' incident exposed a breakdown in profit distribution between management and the top streamer; CEO Sun Dongxu was dismissed, severely damaging brand reputation and stock price.
- 2024: After Dong Yuhui's departure, East Buy's GMV and profit dropped sharply. FY2025 net profit was only about 6 million yuan, leading the market to label it a failed transformation case.
- New Oriental's K12 online education layout burned cash before the 'Double Reduction' and was completely shut down afterward, with initial investments essentially wiped out.
关键成功要素
- Migrated teachers' content delivery skills directly to the live-streaming room, replacing 'shouting' sales tactics with knowledge-based content to build a competitive moat.
- Exited the education market with dignity—refunding tuition, paying severance, and donating desks—preserving brand trust as 'ammunition' for the transformation.
- After the top streamer left, the company did not try to recreate another Dong Yuhui, but instead reinvested resources into self-operated products and agricultural supply chains to reduce reliance on any single IP.
- Yu Minhong personally hosted the first stream and continued to appear on camera, using his credibility as founder to endorse a live-streaming room that initially had almost no traffic.
- Used the HK-listed platform New Oriental Online as the vehicle for transformation, avoiding the direct application of education regulatory frameworks to the new business.
Lessons
- When the core business is wiped out by policy, the key to transformation is not finding a new 'hot' trend, but auditing core organizational capabilities that can be repurposed across industries—for New Oriental, this was teaching and communication.
- E-commerce models dependent on super-streamers are inherently fragile; user trust must be anchored in supply chains and self-operated brands as early as possible during the traffic dividend period.
- Handling crises with dignity (refunds, compensation, donations) is the lowest-cost brand investment; much of the sympathy and trust East Buy received at launch came from its graceful exit during the 'Double Reduction'.
- Poor data in the first year of transformation is normal; the gap between the 5 million yuan debut and top streamers was huge, but the founder's long-termism and cash flow depth determined survival through the cold-start phase.
- The shift from a traffic company to a product company requires the courage to endure short-term GMV declines; the profit trough in FY2025 was a necessary cost for the turnaround in FY2026.
Core Data
- East Buy FY2026 Total Revenue：5.701 billion yuan, up 29.8% YoY (Public data, independent verification not performed)
- East Buy FY2026 Operating Profit：663 million yuan, achieving a turnaround from loss (Public data, independent verification not performed)
- East Buy FY2025 Net Profit：Approximately 6 million yuan; FY2026 forecasted net profit 520 million to 550 million yuan, a YoY increase of 8566.7% to 9066.7% (Public data, independent verification not performed)
- Self-operated Product GMV：5.4 billion yuan, accounting for about half of total FY2026 GMV (Public data, independent verification not performed)
- December 2021 First Live Stream Sales：Over 5 million yuan (Public data, independent verification not performed)
- Dongfang Youxuan Registered Capital：10 million yuan, established in October 2021 (Public data, independent verification not performed)
- East Buy Douyin Follower Count：Approximately 28.335 million as of April 27, 2026 (Public data, independent verification not performed)
Competitors / Peers
In the live-streaming e-commerce track, East Buy faces direct competition from top MCNs like 'Jia Ge Peng You' (Make Friends) and Remote Technology, as well as the Taobao Live ecosystem where Li Jiaqi operates, which rely on top streamers and commission-based models. In the self-operated agricultural product sector, it faces pressure from Sam's Club, Hema, and JD.com's 7Fresh. Sam's Club, with single-store annual sales exceeding $500 million in 2023, has built a higher supply chain barrier through global direct sourcing and membership models. East Buy's differentiation lies in its content-driven streamer team and the middle-class trust brought by Yu Minhong's autobiographical narrative. However, its store and warehousing infrastructure lag far behind Sam's and Hema, and its product breadth is inferior to JD 7Fresh. The long-term competitive outcome depends on whether its self-operated gross margins and repurchase rates can consistently outperform similar channel brands.