East Buy APP Photo: VCG

After a week-long dispute surrounding East Buy, a major livestreaming e-commerce platform run by the private tutoring company New Oriental, the resignation of the platform’s CEO on Saturday seems to climax a week of the company’s managerial mess. 

Experts suggested that the dispute stems from problematic profit distribution and corporate governance in livestreaming platforms, which have seen rapid growth in China during recent years, and the sector needs management optimization in order to realize sustainable development.

The dispute erupted, when East Buy’s social media team repeatedly said that the scripts used by the platform’s star livestreaming host, Dong Yuhui, were authored by the team, not Dong himself. The reply immediately sparked discontent among Dong’s online fans. And, the bans bombarded the company for downplaying Dong’s role.

East Buy CEO Sun Dongxu apologized to Dong, but failed to calm the storm, after disclosing Dong's annual salary is over tens of millions of yuan and expressing a firm stance against the "fan culture." 

The term "fan culture" refers to an organized and spontaneous community of online fans who unconditionally support their idols. 

East Buy marks a crucial step in New Oriental's transition to a livestreaming e-commerce company starting late 2021. After a lackluster performance for six months, it swiftly rose to become a leading liverstreaming site, thanks to the bilingual (English and Chinese) selling skills of the star host, Dong. 

Dong was once an English-language tutor at New Oriental. His eloquence and articulate expression garnered him a large fan base.

On August 25, East Buy released its financial results for the 2023 fiscal year. The total revenue surged by 651 percent, jumping from 601 million yuan ($84.43 million) in 2022 to 4.5 billion yuan in the 2023 fiscal year. Its net profit reached 971 million yuan.

The uproar surrounding Dong continued to escalate last week. A large number of fans were found to have escaped from the livestreaming site. Its stock price plunged nearly 18 percent last week, closing at HK$26.25 on Friday.

On Saturday, East Buy CEO Sun Dongxu resigned, with New Oriental Chairman Yu Minhong assuming the role of CEO. Later, Dong said that he will stay with East Buy and won’t seek a new employer. Yu announced that the company would initiate a major reshuffling soon.

“Dong stands out in the industry with his unique style. And, his personal background helps him garner empathy from millions of workers in big Chinese cities”, Liu Dingding, a Beijing-based technology analyst, told the Global Times on Sunday.

“The dispute is not an inherent conflict between livestreaming platforms and their top hosts, but a case of flawed management spinning out of control,” Pan Helin, joint director of the Research Center for Digital Economics and Financial Innovation, affiliated with Zhejiang University's International Business School, told the Global Times.