In Depth: East Buy’s Earnings Fizzle With the Exit of One Livestreamer

East Buy Holding Ltd., a Chinese e-commerce company, faced significant challenges due to its heavy reliance on a single celebrity livestreamer, Dong Yuhui. The company’s latest annual report for the fiscal year ending May 31 revealed a dramatic decline, with gross merchandise volume (GMV) falling nearly 40% year-on-year to 8.7 billion yuan ($1.2 billion), and the number of paid orders on Douyin (TikTok’s Chinese equivalent) halved to 91.6 million. Net profit collapsed by 97.5% to just 61.9 million yuan, primarily attributed to the sale of its affiliate Time with Yuhui to Dong Yuhui after his departure. The company asserted that, excluding this sale, profit would have risen by 30% to 135 million yuan, highlighting the outsized impact of Dong’s exit [para. 1][para. 2][para. 3][para. 4].

Dong Yuhui’s journey from an English teacher to a celebrated livestream host was unconventional. After joining New Oriental in 2014 and rising rapidly through the ranks, Dong was pushed into livestreaming when China cracked down on private tutoring in 2021. Initially reluctant, Dong soon found viral success in June 2022, thanks to a unique, bilingual presentation style and striking marketing luck. This propelled East Buy (formerly Koolearn) into profitability, swinging from a loss to a profit of 971 million yuan in fiscal 2023, with Dong’s audience on Douyin growing from 900,000 to nearly 13 million by December 2023. His influence was seen as the critical factor behind the company’s turnaround [para. 6][para. 7][para. 8][para. 9][para. 10][para. 11].

The relationship between Dong and East Buy deteriorated after a minor online dispute in December 2023, involving claims about the authorship of Dong's signature poetic sales pitches. The incident, known as the “little essay” incident, spiraled into a public crisis. The CEO’s critical response further angered fans, resulting in a sharp drop in East Buy’s stock price and loss of followers, while Dong’s personal popularity soared. Despite efforts to reconcile, including management changes and a live joint broadcast, the company’s shares continued to decline, underlining the risks of building a brand around a personality [para. 17][para. 18][para. 19][para. 20][para. 21][para. 22][para. 23][para. 24][para. 25][para. 26][para. 27][para. 28].

In July 2024, East Buy announced Dong’s departure, selling his spinoff company to him for 76.6 million yuan—a transaction covered by New Oriental, with Dong also receiving 141 million yuan in net profits as a gesture of gratitude. Both parties described the separation as mutual and beneficial for East Buy’s clarity and stability. Following Dong’s departure, his new livestreaming channel quickly surpassed East Buy in popularity, amassing over 30.92 million followers by August, predominantly affluent women aged 31-40 in major cities. Dong’s business expanded rapidly, but he moved away from frequent livestreaming to focus on management, citing emotional toll and a preference for running a “small and beautiful” company centered on agricultural products [para. 31][para. 32][para. 33][para. 34][para. 35][para. 36][para. 37][para. 38][para. 39][para. 40][para. 41][para. 42][para. 43][para. 44][para. 45][para. 46][para. 47][para. 48].

Despite business success, Dong reported personal struggles, including public scrutiny, exhaustion, and the challenges of fame, describing a life increasingly devoid of happiness and plagued by loneliness [para. 49][para. 50][para. 51][para. 52][para. 53][para. 54].