China boasts one of the highest numbers of private schools globally. By 2023, over 33.4% of all educational institutions in China were privately owned, with nearly 16% of the country’s total student population enrolled in these institutions. Among the prominent players in this sector is the “New Oriental Education & Technology Group” (新东方企业网).
Established in Beijing in 1993, it has emerged as one of China’s foremost private educational service providers, despite the challenges posed by the “double reduction policy” (双减), which has significantly impacted the sector.
Versatility is the key to New Oriental Education business
New Oriental Education gained enormous popularity among Chinese students and families. In the fiscal year 2023, the Group generated net revenue of around USD 2.9 billion, and, as of February 2024, the private school counted more than 33,000 teachers spread across its 911 learning centers and 81 schools in China.
Versatility is the key to the success of the New Oriental Education Group. Indeed, the school offers a wide variety of education plans and after-school tutoring, including language training, online lessons, and tailor-made courses for students of every age, from primary and secondary school to university. Furthermore, since 2008, the private school has offered the “New Oriental U-can” program, which is specifically designed for middle and high school students to help them prepare for the Gaokao, the most important exam in the Chinese education system.
Collaborations are another important factor in the popularity of New Oriental Education in China. Indeed, students can count on many foreign partners across the globe for attending language certifications, such as Cambridge and Oxford University, “BBC Learning” and “US News & World Reports”. Furthermore, in 2021, the New Oriental Education Group launched the section “新东方老师好!” (Good morning, New Oriental teacher!), to offer its students the best teaching experience. The initiative allowed students to consult a teacher’s career, the teaching field, and other students’ feedback before choosing them for their private lessons.
The 2021 “Double Reduction Policy” severely damaged private education businesses in China
In recent years, the education market in China has undergone a significant transformation, due to regulatory changes. In July 2021, the Chinese government introduced the ‘Views on Further Reducing the Job Burden and Off-Campus Training Burden of Students in Compulsory Education’ (关于进一步减轻义务教育阶段学生作业负担和校外培训负担的意见), marking the official commencement of the double reduction (双减) program, which was launched in March 2022. This initiative aimed to alleviate the pressure and stress prevalent among compulsory school students within the competitive education system.
The double reduction program targeted two main areas: reducing homework assignments and curbing after-school tutoring. Additionally, the reform involved an enhancement of the ‘National Network Cloud Platform for Primary and Secondary Schools’ (国家中小学网络云平台).
Originally introduced in 2020 to mitigate the educational disruptions caused by the COVID-19 pandemic, the platform received significant updates in March 2022. These updates included the integration of after-school services, teacher training programs, and family education resources. While intended to enhance educational access and quality, the expanded features of the platform had unintended consequences for the private online education sector.
As a result of the government’s reforms and the expanded capabilities of the national platform, the economy of private online schools experienced a sharp downturn. Many platforms saw substantial declines in revenue throughout 2022, with some reporting negative growth rates as high as -52.1% and -76.8%.
How New Oriental Education limited the damages of the double reduction policy
After the implementation of the double reduction policy, New Oriental Education suffered significant losses, with its share value plummeting by 92% in 2021. Besides, tuition refunds amounted to RMB 20 billion for the Chinese Group. Subsequently, in the fiscal year 2022, New Oriental Education experienced a nearly 28% drop in revenue, totaling RMB 3.1 billion (USD 429.7 million). Faced with these substantial setbacks, the company opted for a drastic business turnaround.
In January 2023, New Oriental Education officially announced its decision to rebrand as “东方甄选控股有限公司” (East Buy Holding Limited) and to pivot its focus primarily towards live commerce operations instead of online education.
Following the changes, New Oriental Education thrived, particularly due to its live-streaming activities, which saw an impressive 268% increase in revenue during the first six months of the 2022 fiscal year. Live streaming emerged as the primary revenue generator for the company in China. Consequently, the revenue from online university education amounted to ‘only’ RMB 590 million (USD 83.3 million) during the fiscal year 2023.
The variety of content is what makes New Oriental unique
Dong Yuhui, a teacher at New Oriental, emerged as a key figure in the group’s transition towards live commerce. Initially renowned for his dynamic teaching style, Dong Yuhui’s foray into live streaming, combining English instruction with product sales, gradually garnered attention.
However, tensions arose between him and his boss but recognizing Dong Yuhui’s potential and the growing importance of live commerce for East Buy, the group’s CEO appointed him to lead “Traveling with Hui” (与辉同行), a registered capital of RMB 10 million (USD 1.3 million). Launched in January 2024, “Traveling with Hui” quickly captured the interest of audiences on Douyin. Initially focused on live commerce, the platform aims to weave storytelling about Chinese society into its content and diversify its offerings to include cultural and agricultural products.
Dong Yuhui’s unique teaching philosophy, characterized by poetic compositions, engaging interviews, and immersive cultural experiences, continues to be the driving force behind the success of “Traveling with Hui.” His influence extends beyond the platform, evident in his main Douyin profile (董宇辉), boasting billions of subscribers and millions of likes, underscoring the profound impact of his approach to content creation and engagement.
The group has created many profiles on Chinese social media offering a wide range of content. The latest profile was opened in January 2024 and it’s called 与辉同行 (Walking with Hui). Walking with Hui was launched on Douyin on January 9th with a registered capital of RMB 10 million (USD 1.3 million) and immediately gained a lot of popularity. By the end of January 2024, the account had an average of 18 million spectators per livestream. As of May 2024, the account has more than 18.6 million followers and 72.6 million likes. Despite the account’s main focus being e-commerce and live streaming, walking with Hui wants to mix it with storytelling about Chinese society, and plans to start selling cultural and agricultural products. Dong Yuhui, one of the most important professors in the Easy Buy Group and owner of Walking with Hui, heavily influenced the profile with his innovative teaching philosophy. Indeed, Dong Yuhui shows a unique way of teaching and livestreaming, which consists of composing poems, holding interviews, and making videos to further encourage users to get in touch with nature and Chinese culture. Its main Douyin profile (董宇辉) counts more than 25.2 million subscribers and 140 million likes.
Apart from Douyin, East Buy is also working on TikTok and plans to penetrate overseas markets. Since the end of January 2024, the company has launched several recruitment plans to hire a workforce specialized in TikTok e-commerce, covering positions such as the East Buy TikTok Overseas Store Operations and East Buy Content Operations Manager.
New Oriental Education: reinventing itself through e-commerce
- New Oriental Education Group, established in 1993, is a leading private educational service provider in China, despite challenges like the “double reduction policy,” with over 33,000 teachers and 911 learning centers.
- Versatility is key to New Oriental’s success, offering a wide range of education plans, online lessons, and tailor-made courses, including the “New Oriental U-can” program for Gaokao preparation.
- Collaborations with foreign partners such as Cambridge, Oxford University, and BBC Learning enhance New Oriental’s popularity and offerings.
- After facing significant losses due to the double reduction policy, New Oriental pivoted towards live commerce, experiencing a 268% revenue increase through live streaming activities.
- Dong Yuhui, a key figure in New Oriental’s transition to live commerce, leads “Traveling with Hui,” a popular Douyin account focusing on e-commerce and storytelling about Chinese society, with plans to expand internationally on platforms like TikTok.
