Sun Dongxu, the company’s sacked CEO, became the subject of ire when he backed a social media post insinuating Dong was taking too much credit for himself because scripts came from a team of writers. East Buy said in a filing to the Hong Kong stock exchange on Monday that Sun’s mishandling of the incident hurt the firm’s brand and reputation, and that Yu, the chairman, would take over as CEO.
China’s tutoring giant triples sales by selling eggs after crackdown
China’s tutoring giant triples sales by selling eggs after crackdown
Replacing Sun will protect the interests of shareholders, the company said in the statement, and “allow for a more experienced director to take over the management”.
The case comes as Chinese e-commerce platforms have been forced to navigate uneasy relationships with big influencers. After betting big on popular personalities to attract consumers and drive sales, platforms are now trying to reduce their reliance on any one individual.
The case of East Buy illustrates the precariousness of this balancing act. Dong skipped out on the company’s regular streaming schedule after the row about hogging credit. That resulted in a revolt from his loyal followers who thought East Buy was not being nice enough to their idol.
Both Dong and the company have a lot on the line. The two are mutually reliant on each other to pull off the work, according to Li Chengdong, founder and chief analyst at Beijing-based e-commerce consultancy Dolphin.
A casualty of China’s brutal online education sector crackdown, East Buy, previously known as Koolearn, morphed into its current form earlier this year with a successful push into peddling wares in online live streams, which has become a strong force in the domestic e-commerce industry.
Live-streaming e-commerce sales jumped 58.9 per cent year on year to 2.2 trillion yuan (US$309 billion) in the first 10 months of 2023, accounting for 18.1 per cent of total online shopping revenue in China, according to data from the Ministry of Commerce.
Following its stock exchange filing, East Buy announced that Dong would return to live-streaming on Monday evening as a senior partner of the company. In a separate statement, the parent company announced that Dong was being promoted to assistant of culture to the chairman, Yu, and would double as vice-president at New Oriental Culture and Tourism Group.
East Buy shares rose more than 21 per cent on trading Monday, closing at HK$31.85.
