Home » Soochow Securities: Under the undercurrent of live-streaming e-commerce transformation, the feast of knowledge realization of Oriental selection has just begun_Stock Channel_Securities Star

Soochow Securities: Under the undercurrent of live-streaming e-commerce transformation, the feast of knowledge realization of Oriental selection has just begun_Stock Channel_Securities Star

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(Original title: Soochow Securities: Under the undercurrent of live broadcast e-commerce transformation, the feast of the realization of Oriental selection knowledge has just begun)

Source: Financial World

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Undercurrent of live broadcast e-commerce transformation

The feast of the realization of knowledge in the selection of the East has just begun

Investment Points

Event: From June 9th to 10th, Dongfang Selection, a subsidiary of New Oriental Online, achieved outstanding results in the Douyin delivery. The total number of viewers and single-day sales in the live broadcast room exceeded 7.6 million person-times and 15 million yuan.

Dongfang Selection broke the cocoon into a butterfly, another feast of the live broadcast e-commerce industry. The main body of Dongfang Selection is Dongfang Selection (Beijing) Technology Co., Ltd. established in October 2021, which is wholly-owned by New Oriental Online. On December 28, 2021, Oriental Selection will be broadcast for the first time on the Douyin platform, and the sales of the first broadcast will be about 800,000 yuan. On May 24, 2022, Yu Minhong elaborated on the overall future development direction of New Oriental at the Yabuli Forum: the company chose to “walk on two feet”, the US stock New Oriental insisted on the main business of education, and the Hong Kong stock New Oriental Online opened up a new business of live broadcast. The dazzling performance of Dongfang Selection during 618 once again proved the track vitality and model advantages of live e-commerce.

Time to think about: Under the trend of bringing goods anchors to the head, the absence of 618 high-quality anchors creates opportunities for Dongfang Selection to become popular. From June 9th to 10th, the live broadcast room of Dongfang Selection ushered in a feast: the number of viewers exceeded 7.6 million, and the total daily sales exceeded 15 million yuan, which was a significant increase compared to before, and the number of fans on the entire platform doubled. . It has been more than 5 months since the platform was incubated, why is it popular at the current point? We believe that in addition to the early stage of the platform itself being in the groping and running-in stage and the restraint in traffic delivery, the trend of de-heading in the live broadcast e-commerce industry is also an important catalyst: (1) In 2022, due to various reasons, many top anchors will be absent, and merchants will be absent. At the same time, there is a supply and demand gap between the client and the user. (2) Behind the short-term phenomenon is the undercurrent of industry structure transformation. Starting from the interests of platforms and merchants, the de-heading of the anchor level is gradually becoming a trend, and high-quality small and medium-sized anchors are ushering in important development opportunities. Considering that the current selection of Dongfang is more team-based and platform-based, rather than focusing too much on or relying on specific anchors, we believe that the personal risk of its anchors is lower.

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Competitive advantage thinking: enriching knowledge assets and superimposing excellent output capabilities, Oriental Selection is the target of scarce knowledge realization in the field of live broadcast. We believe that live broadcast, as a medium for richer and more efficient information transmission, has a high degree of fit with New Oriental’s own business (focusing on information transmission efficiency). It will be a battle of dimensionality reduction. In addition to brand awareness and financial advantages, New Oriental’s strong teaching team comes with rich knowledge assets (differentiation, scarcity) and excellent information output ability (realization ability), so that the live broadcast process is informative, interesting and useful, and the conversion efficiency is expected to be higher than peers. The audience can get a lot of fun from the live broadcast itself. Although the audience has a threshold and is biased towards the Kochi crowd, the user stickiness and activity are better. We are optimistic that Dongfang Selection will realize efficient and continuous realization of knowledge assets in the field of live broadcast delivery.

Potential thinking: The audience and category structure still have room for improvement and optimization, and the feast has just begun. Although the number of fans and the unit price selected by Dongfang are lower than other top anchors, the sales are still very bright, which shows its excellent conversion efficiency. The team currently focuses on agricultural products with relatively low customer unit price, and is expected to expand to high customer price and self-operated categories in the future. Considering that New Oriental’s own audience is mainly high-knowledge people, and Oriental’s selection of quality control is strict, and the selection of products is biased towards high-quality agricultural products with high customer orders, we believe that in the future, when it expands to categories with higher customer unit price and high gross profit, the resistance will be less than the average. The anchor of agricultural products carrying goods. Overall, we are optimistic that it will achieve a further improvement in GMV and profitability under the gradual increase in the number of fans and the optimization of the category structure. At the same time, we are also optimistic that the rise of such high-quality anchor teams will positively promote the entire live broadcast e-commerce industry.

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Risk warning: Risk of slowdown in short video user growth, negative impact from local epidemics, and industry policy risks.

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