Ever since China abruptly cut off the bulk of income for most private education companies last summer, the businesses have had to make some difficult decisions. For New Oriental, once the leader of the sector, it meant letting go of most of its tutors for the K-9 grades and setting up a new livestreaming e-commerce unit to make up for some of the lost income.
Until this month, New Oriental’s new live e-commerce initiative had been lackluster at best. Daily sales hovered around less than RMB 1 million ($150,000) in the past six months, according to data from livestreaming tracking platform Huitun. But suddenly, New Oriental’s fortunes are looking up. It all changed after the firm’s hosts, all former tutors, started to teach English while selling goods over their livestreams.
On June 10, during a session selling bags of rice, the host pulled out a small whiteboard and asked the audience whether they thought the price of RMB 80 was fair. She then wrote three English phrases — “bargain,” “cost-effective,” and “unforgettable” — on the whiteboard and began teaching an unexpected course on how to use these phrases in real life. This unique style of selling has quickly made New Oriental’s livestreaming sessions a sensation on the Chinese internet.
Why it matters: China’s blooming livestream e-commerce sector has become increasingly crowded as thousands of Chinese celebrities and online personalities flock to commercialize their followers or cash in on online fame. Only those with relatively unique selling points or characters are able to stand out and attract buyers’ attention.
- New Oriental is among several tutoring companies pivoting to new business ventures after China’s crackdown on the private tutoring industry last July. Edtech giant Zuoyebang has looked into developing a printer business, while tutoring unicorn Yuanfudao tried to invest in an outdoor down jacket business last year.
Details: Livestreaming session and video clips of Oriental Select, New Oriental’s livestream ecommerce arm, went viral across Chinese social platforms over the weekend after hosts started to offer short, free English teaching sessions during the live shopping sessions.
- Oriental Select’s account on Douyin, the platform where the brand livestreams, has gained more than 1.6 million followers in three days since June 10. An 18-hour-long livestream held on June 11 recorded RMB 19.9 million in sales, a jump from the RMB 4.5 million New Oriental’s founder Yu Minhong achieved on his December debut.
- Instead of the hard-sell advertising style used by most Chinese e-commerce livestreamers, hosts at Oriental Select, all former teachers at New Oriental, display a laidback attitude when selling through the livestreams.
- When promoting a corn product on a livestream session held on Monday, former English teacher Dong Yuhui said he hoped the corn would remind the buyers of their “good-old days” as a child when they were “young and carefree.” He then took out a board and wrote down the expressions in English.
- On Monday, New Oriental’s share price increased by more than 16% in Hong Kong after the company’s livestreams began to take off over the weekend.
Context: Battered by China’s private tutoring clampdown, the country’s edtech majors such as New Oriental, Gaotu, and TAL all stopped providing after-school tutoring services targeting students up to K-9, a major source of their revenue, in the mainland Chinese market in the second half of 2021. Shares of the three companies plunged roughly 100% since the regulatory measures were announced in July.