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

East Buy Holding Ltd., a Chinese e-commerce platform spun off from New Oriental Education & Technology Group, recently experienced a dramatic slump in its performance, emphasizing the risks inherent in over-reliance on a single celebrity livestreamer, Dong Yuhui. In its fiscal year ending May 31, 2024, East Buy reported a 40% year-on-year drop in gross merchandise volume (GMV) to 8.7 billion yuan ($1.2 billion), and a 97.5% plunge in profits to just 61.9 million yuan. Paid orders on Douyin, China’s version of TikTok, halved to 91.6 million. The company attributed much of its financial woes to the sale of Time with Yuhui, Dong’s spinoff venture, but claimed that excluding the transaction, profits would have risen 30%[para. 1][para. 3][para. 4].

Dong Yuhui’s journey from rural Shaanxi to celebrated livestreamer was unusual: initially an English teacher at New Oriental, he became head of 12th-grade English for Koolearn, New Oriental’s online branch. After the government’s 2021 crackdown on private tutoring, New Oriental pivoted to e-commerce livestreaming. Dong’s bilingual, poetic style began to attract vast audiences, particularly after June 2022 when a rival was banned and Douyin’s algorithm boosted his channel. His popularity was crucial to East Buy’s turnaround, helping reverse losses and propelling stock value. Between June 2022 and June 2023, Dong’s follower count soared from 900,000 to nearly 13 million, and Koolearn—by then renamed East Buy—swung to a net profit[para. 6][para. 7][para. 9][para. 13].

However, the partnership faltered over the so-called “little essay” incident in December 2023, when comments on East Buy’s Douyin account questioned Dong’s authorship of his famed poetic sales pitches, triggering a revolt among his devoted fanbase and precipitating a corporate crisis. The controversy was exacerbated by public criticism of Dong by CEO Sun Dongxu and further mismanagement. In a rapid fallout, East Buy’s stock lost 22% over days, erasing nearly HK$7.5 billion in market value. Although efforts at reconciliation—such as appointing Dong as a senior partner and establishing a separate studio for him—initially stabilized the company, investor confidence soon waned and shares dropped further through early 2024[para. 15][para. 17][para. 22][para. 25][para. 27].

The eventual split was formalized in July 2024, with East Buy transferring Time with Yuhui to Dong for 76.6 million yuan, and New Oriental covering the cost. Dong received all of Time with Yuhui’s 141 million yuan net profit as a reward. Both parties framed the separation as amicable and necessary for East Buy’s strategic clarity[para. 30][para. 31][para. 32][para. 34]. Dong’s new venture quickly attracted massive followings, surpassing East Buy’s own channel with 30.92 million fans by August 2024. His audience, mostly women aged 31-40 from major cities, signals strong spending power; his channel was Douyin’s top seller last year. Dong expanded his team from 60 to over 300 people and established four new companies. Despite business growth, Dong admitted to personal exhaustion, insomnia, and a conflicted attitude toward his fame and salesmanship. He aspires to build a company focused on “restraint” in profits and fairness across the supply chain, emphasizing that happiness has become elusive since his meteoric rise[para. 39][para. 41][para. 44][para. 47][para. 49][para. 50][para. 51].

In sum, the East Buy-Dong Yuhui saga is a cautionary tale about the perils of anchoring a corporate brand on a single, volatile celebrity figure in the livestream-dominated Chinese e-commerce market[para. 29][para. 52].