The Rebellion and Migration of Yu Minhong

Author | Liu Baodan

Editor | Zhang Xiaoling

More than a year ago, Dong Yuhui became popular on Douyin, causing New Oriental's stock price to soar by 50% in just 4 days, and Yu Minhong once again stood at the forefront of the era.

More than a year later, Dongfang Zhenxuan's self-operated product live streaming room and store were banned on Douyin for several days. Yu Minhong planned a rebellion and escape, migrating from Douyin to his own app and Taobao, searching for a "lush and fertile" land. Douyin, with its inherent coldness and rotating bloggers, was just one of his choices.

On August 29th, Dongfang Zhenxuan made its debut on Taobao Live, with a GMV of 175 million yuan, which was a decent start.

Yu Minhong attempted to break free from Douyin's absolute control, which was also an experiment for him and Dongfang Zhenxuan regarding survival. The multi-platform survival of content creators is becoming a new trend. Behind them, countless people are also yearning for such freedom.

Debut on Taobao

Just over a month after the suspension of Douyin's live streaming room, Dongfang Zhenxuan quickly started broadcasting on Taobao, opening up a new battlefield for e-commerce.

On August 30th, Taobao data showed that Dongfang Zhenxuan's debut on Taobao generated a total sales volume of 175 million yuan. Compared to Luo Yonghao's achievement of over 200 million yuan when he entered Taobao, it was slightly inferior. Yu Minhong also stated during the live stream that the company set a relatively low target.

Although it didn't break Luo Yonghao's record, Dongfang Zhenxuan's debut on Taobao was still commendable. During the 17-hour live stream, Dongfang Zhenxuan received over 1.58 million orders, breaking the record for the highest daily sales volume.

Public data shows that within the first hour of the live stream, Dongfang Zhenxuan's Taobao live stream GMV exceeded 10 million yuan. According to data from Chananalytics, in the past 30 days, the daily average GMV of its Douyin live streaming room was between 10 million and 25 million yuan.

This means that the transaction volume of Dongfang Zhenxuan's debut on Taobao in the first hour has already approached its daily transaction volume on Douyin. And the sales volume of 175 million yuan throughout the day broke the record for the highest daily sales volume.

For Dongfang Zhenxuan, such a start is enough to establish a new presence on Taobao.

From the time Dong Yuhui became popular on Douyin in June last year, to the decline in live streaming performance in the first half of this year, and then the suspension of self-operated live streaming rooms, after spending over a year in a honeymoon period with Douyin, Dongfang Zhenxuan headed towards Taobao, becoming another successful "defector" after Luo Yonghao.

At the performance meeting on August 25th, Dongfang Zhenxuan CEO Sun Dongxu publicly responded for the first time, stating that Dongfang Zhenxuan will adhere to an open attitude, draw on the strengths of various platforms, and insist on multi-platform development.

Dongfang Zhenxuan grew as a brand on Douyin. Sun Dongxu emphasized that Douyin is a strategic stronghold for Dongfang Zhenxuan and will not reduce investment on the original platform. As for Taobao, he described it as a vast land with great potential.

Dongfang Zhenxuan was deeply integrated with Douyin before. According to the financial report, Dongfang Zhenxuan's GMV reached 10 billion yuan in the 2023 fiscal year, with the majority coming from Douyin.

A month ago, due to rule violations, Douyin suspended Dongfang Zhenxuan's self-operated live streaming rooms. Dongfang Zhenxuan's app urgently announced an 85% discount on self-operated products, attracting hundreds of thousands of users to rush into the app for purchases, resulting in a total sales volume of 80 million yuan in three days. On the surface, this may seem like an episode, but now it appears to be the prelude to Dongfang Selection's multi-platform strategy.

Leaving Douyin?

Dongfang Selection is not the first anchor to start on Douyin and then move to Taobao, and it certainly won't be the last.

In the past two years, popular anchors on Douyin, including Jiaoge Pengyou, Yaowang Keji, TVB, Liu Genghong and his wife, and Zhang Lan, have all started broadcasting on multiple platforms, with Taobao being the first stop for many Douyin anchors.

As we all know, Douyin is a traffic platform driven by algorithms. It distributes content based on a massive supply, pursuing efficiency above all else. This means that fans have weaker loyalty to merchants, and merchant performance is closely related to platform recommendations.

In other words, Douyin is easily able to create a buzz through traffic, allowing celebrities or internet celebrities to quickly gain popularity. However, Douyin's decentralized algorithm means that it won't continuously recommend the same person. Instead, it will periodically promote new "internet celebrities" to maximize platform traffic and maintain absolute control over it.

Therefore, for internet celebrities and merchants, once they lose platform recommendations, they will be at a disadvantage. This is a factor that makes Dongfang Selection and others feel uneasy.

"Dongfang Selection used to be the representative of high-quality live content on Douyin, and its defection will make Douyin realize the threat," said an industry insider who wished to remain anonymous. "First there was Luo Yonghao, and now there's Dongfang Selection. It's impossible for Douyin to not have any emotions."

An interesting detail is that Dongfang Selection's leading anchor, Dong Yuhui, did not appear at the first live broadcast on Taobao. This may indicate that Dongfang Selection still has reservations about Taobao and is trying to strike a balance across different platforms.

Entering Taobao is not an easy path. Douyin and Taobao have different platform attributes, and whether one can adapt after entering Taobao is a big question. Currently, the performance varies.

MCN agencies like Jiaoge Pengyou and Yaowang Keji have launched anchor matrices, continuously improving their product selection and supply chain management capabilities, and their development momentum is good.

According to the interim report released on August 21, Jiaoge Pengyou's GMV exceeded 5 billion yuan in the first half of the year. The company stated in its financial report that it has successfully achieved cross-platform operations. Yaowang Keji established a Taobao live streaming business unit in March this year and is also expanding its presence on Taobao.

However, anchors with strong personal styles, such as Liu Genghong and his wife and Zhang Lan, have not performed well on Taobao live streaming and are still primarily focused on Douyin.

Behind the anchors' pursuit of multi-platform development, it is an undeniable fact that the growth rate of the live streaming industry has slowed down. According to data from Anxin Securities, the growth rate of the live streaming e-commerce industry in 2022 is 48%, a significant decrease compared to the high growth rates of 228%, 190%, and 84% in the past three years.

In this context, seeking multi-platform development is undoubtedly an important means of achieving growth. Jiang Han, a senior researcher at Pangu Think Tank, believes that competition in Douyin live streaming is becoming increasingly fierce, and cross-platform sales can help anchors expand their influence and audience range.

"An anchor moving from Douyin to Taobao can be seen as a common path in the live streaming e-commerce industry," Jiang Han said. Although Douyin has a large user base and traffic advantages, Taobao has richer merchant resources and product categories, allowing anchors to maximize their commercial value. For Dolphin Research, Taobao is just the first step in its multi-platform development. The company's bigger challenge lies in whether its existing supply chain, stocking capacity, and fulfillment capability can meet the requirements of multiple platforms, which is still unknown.

The capital market still has concerns about Yu Minhong's migration. On August 31, Oriental Selection closed at HKD 39.75, a decrease of 2.33%. It has experienced a continuous decline for three consecutive days, with a particularly high drop of 8.48% on the day of the launch.

The hidden worries remain. For Yu Minhong, the successful transformation of the company into live streaming is just crossing one mountain. Next, he needs to prove to the market that Oriental Selection has the ability to continuously deliver goods across all platforms, which is another mountain to climb.