During a speech at the China Entrepreneurs Forum in Tianjin on August 3, Michael Yu, Chairman of New Oriental Education, expressed views on the firm’s livestreaming e-commerce platform, Oriental Selection.
New Oriental Education has spent nearly 20 billion yuan ($2.96 billion) since last year to refund tuition fees and in compensation for its employees, although its bountiful cash reserves allowed it to emerge largely unscathed. When the livestreamers of Oriental Selection previously worked as teachers, their annual income exceeded one million, but now their annual income is roughly 200,000 yuan to 300,000 yuan. Since last year, the salary of the core members of New Oriental has dropped by at least 60% to 70%, but none of them have left their posts.
Yu said: “I never proposed requirements on New Oriental’s annual income and annual profit, and neither did Oriental Selection. However, the products sold must be high-qualified, so as to provide real services for ordinary people. As for when gross merchandise volume of Oriental Selection can be increased in the future, I don’t care.”
In response to the question of whether some problems of traditional e-commerce platforms will appear in Oriental Selection, Yu mentioned three aspects. First, New Oriental is a listed company, and every penny of a listed company must be recorded. Second, the trust of an audience for the livestreaming platform has led to the rise of stock price, which is now stable at around HK$20 ($2.55). Third, Oriental Selection is based on the company, not Yu himself. No matter how famous livestreamers are, they are a team.
At the end of July, a financial report disclosed by New Oriental showed that its net revenue in Q4 of fiscal year 2022 was $524 million, down 56.8% year-on-year. For the whole fiscal year 2022, its net revenue was $3.105 billion and its operating loss was $983 million. Yu said at that time that he believed that with the brand awareness and educational resources accumulated by the company, new businesses would start to generate considerable income in the next financial year.