Live streaming gets smart on the knowledge business

A live-streaming project promoting local culture, crafts and products caught the attention of an audience in Nanchong, Sichuan Province in June. LI TAO/FOR CHINA DAILY

Due to changes in academic tutoring, the education giant is looking to new growth points with e-commerce. But is it sustainable?

Browsing through China’s countless e-commerce livestream channels, it’s not uncommon to hear phrases such as “Hey guys! Lowest price ever! Three, two, one…buy “Now! Now!” to boost sales.

But sometimes going a different route can also strike a chord with a staggering number of Chinese consumers, as is the case with Dong Yuhui, a 29-year-old livestreamer at education giant New Oriental Education and Technology Group.

“No need to hurry. It doesn’t matter whether you buy the product or not, but listen to a story.” That’s what it tells consumers, peppered with free English knowledge related to selling items and injecting fascinating anecdotes about luminaries like William Shakespeare.

The unique style of combining a talk show format and English lessons with e-commerce live streaming quickly attracted more than 20 million subscribers, ranging from celebrities to everyday people, dancing to the tune of Dong in just 20 days. Moreover, the success shattered the long-standing landscape of the e-commerce live streaming industry and spurred a ripple effect.

Industry insiders said several livestreaming platforms are already planning a big foray into “content and knowledge-based” livestreaming, much like what Dong is doing, to attract consumers, rather than to simply use pretty faces to sell products online.

While the average daily turnover of the top 50 live streamers at this year’s 618 shopping gala was 18 million yuan ($2.7 million), Oriental Selection, the live streaming arm of New Oriental, which Dong works for, raised 69.85 million yuan at its peak one day. .

Zeng Ying, a brand retail analyst at consultancy Analysys, said such a new style of selling goods online is refreshingly different from the thousands of online celebrities who flock to cash in on fame in line.

“In China, the booming live e-commerce industry has become increasingly crowded and seamless, so a unique medium like Dong’s can quickly stand out and grab the attention of shoppers,” said Zeng.

Qin Jiayu, a 34-year-old programmer from Shenzhen, Guangdong Province, bought three bags of rice on Dong’s livestream, which he said was a “comfortable and dignified” shopping experience.

“I feel like I’m paying for lessons, for the English expressions and the skills I learned in the live streaming sessions. The rice I bought is like a gift,” said- he declared.

Currently, Oriental Selection mainly sells books and agricultural products, including corn, cherries and edible mushrooms. The price of agricultural products is higher than the average price of other live broadcasters – for example, a piece of corn costs about 6 yuan, which normally costs about 3 yuan.

Earlier this year, New Oriental founder Yu Minhong and his colleagues took a giant step in a different direction to develop Oriental Selection, following the government’s enactment of the strictest regulations ever imposed on the course industry. billion-dollar individuals in July of last year.

“The goal of e-commerce live streaming is to help boost rural revitalization, make high-quality agricultural products available to consumers, and also increase farmers’ incomes,” Yu said.

“We can also leverage our advantages in online training and technology to diversify into online agricultural training, which can help farmers expand their knowledge and improve their skills,” he said. added.

As Dong and Oriental Selection become increasingly popular, Yu revealed on his live broadcast on June 20 that the Beijing-based education company plans to open an e-commerce academy to train live streamers.

According to research from consulting firm iiMedia, the total revenue of China’s e-commerce live streaming industry will reach 1.2 trillion yuan and is expected to reach 2.14 trillion yuan in the next three years.

“Watching e-commerce live streaming has gradually become an online habit for many people, as the number of such users will reach 660 million this year, nearly half of the country’s total population,” said iiMedia.

However, the market consultancy also pointed out that the industry is facing growing challenges such as “lack of high-quality live streamers, unique content and high-quality products”.

“A lot of celebrities and internet anchors who livestream e-commerce need some kind of cultural training, and we think New Oriental is the best company to lead that,” Yu said.

“Building such a school is to improve the overall capacity of Chinese live broadcasters. If established, I will go to teach in person and also invite famous live broadcasters such as Dong Yuhui to join me,” said he added.

Earlier this month, the National Radio and Television Administration of China and the Ministry of Culture and Tourism issued new regulations aimed at strengthening scrutiny of the behavior of live broadcasters.

The directive emphasized that live broadcasters should uphold positive values, create and promote positive stories, and maintain a healthy image. Additionally, he advised hosts to self-regulate and avoid content that focuses solely on viewing traffic, has a morbid aesthetic, caters to fandom culture, or encourages the cult of silver.

Live streamers in professional fields such as law, medicine, education and finance must obtain relevant qualification and approval from the streaming platform, the guideline said.

Before Yu, Luo Yonghao, founder of Smartisan, also jumped on the bandwagon of forming livestreamers in February. He founded an academy with the aim of nurturing more talent for the industry. Luo acts as honorary dean, while Li Liang, former vice president of New Oriental, is the dean.

Luo Yonghao sold three training courses for beginners and advanced streamers as well as an operations class for traders. On the first day, more than 1.15 million yuan of these courses were sold. The Beginners Course even sold out before its livestream ended that day.

“The status quo is those who can do live streaming can’t do training, and those who can do training won’t do live streaming,” he said. “In fact, our e-commerce live streaming academy does not just want to cultivate great internet celebrity anchors, but nurture talents from across the industry to generate economic benefits and social value.”

According to Luo, the so-called interest in e-commerce live streaming means that when people do not have a clear will to consume, the system’s algorithm can make relatively high-level intelligent recommendations, which leads to some consumption.

“Such additional consumption will make a huge contribution to growing domestic demand and boosting the overall economic environment. Therefore, in this sense, the industry has great potential and will create great social value,” Luo said.

Will a new business model like that of New Oriental last long? As the e-commerce live streaming industry tends to focus more on content and knowledge, industry experts have started to question this.

After the share price of Koolearn, the online arm of New Oriental, rose 700% in the past month, overseas investors began to pare their holdings as Morgan Stanley neared liquidation. Tencent Holdings, the company’s former second largest shareholder, significantly reduced its stake from 9.04% to 1.58%.

“This is mainly because the explosive growth that New Oriental has experienced over the past few weeks is not sustainable, as the business logic has changed. Investors who have invested in stocks due to educational attributes have lost their valuation basis at the moment,” said Chen Liteng, analyst. at the Internet Economy Institute, a consulting firm.

“After all, it is an education company, and its resources and experience in live broadcasting are still limited. It mainly sells agricultural products, but it is very difficult to control the quality of agricultural products. In addition , it also faces challenges like a high loss rate due to logistics,” Chen said.

“The destination of e-commerce live streaming is the product itself. Poor product quality has a fatal impact on the platform, leading to lower word-of-mouth and loss of users,” Chen added.

For companies like New Oriental, to maintain such momentum, it is essential for the company to build a supply chain itself, which is important for its quality control and long-term growth, he said. -he declares.

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