The sensitive and fragile stock prices of Eastbuy are increasingly affected by remarks made by the boss or its affiliated anchors.

During the anniversary live broadcast of Eastbuy on June 26th, the host Dunden publicly expressed dissatisfaction with the company's recent practices. She criticized the company for not communicating with the anchor when opening new accounts, the inaction of the public relations department and said "I used to think the company was pretty good for a long time, but recently I've been disappointed."

Immediately after that, Eastbuy's stock price fell more than 7%. Two days later, these live broadcast clips started to spread on social media platforms such as Douyin. The incident went viral and more anchors' inappropriate behavior was exposed.

On June 29th, "Guizhou Culture and Tourism Administration deleted all videos related to Eastbuy" trended on social media. The incident was caused by Eastbuy anchor Mingming's use of the phrase "shattered mountains and rivers" to describe the terrain of the Yungui Plateau during a live broadcast of "Eastbuy sees the world" on June 22nd. Another anchor YoYo criticized Guizhou on social media, saying that its money spider's legs are longer than hers. These remarks immediately sparked public outrage, and Guizhou Culture and Tourism Administration deleted all Eastbuy-related videos.

This kind of public opinion triggered by a single remark is not the first time it has happened.

On May 31st, during a live broadcast conversation with Wumart founder Zhang Wen, Eastbuy founder Yu Minhong said "Eastbuy is now doing all sorts of things, without any ability to make suggestions," causing Eastbuy's stock price to fall by 18% within three days. Yu Minhong then had to publicly issue an apology to minimize the damage.

The market's understanding or tolerance of Eastbuy is decreasing.

At the beginning of Eastbuy's popularity, these anchors voluntarily revealed company weaknesses in their remarks, which was a characteristic display in their live broadcasts. This "everyday feeling" and "relaxed feeling" was the main reason why Eastbuy stood out from shouting-style live broadcasts. But now, whether it's Yu Minhong or the anchors, their remarks directly lead to lower stock prices for the company, and Eastbuy's live broadcast "image" is in tatters.

The rise of Eastbuy cannot be separated from the personal abilities of anchors such as Dong Yuhui. The commercial model relies heavily on"people," including the anchors. However, the probability of errors by humans is very high. Once someone makes a slip of the tongue, it will directly affect Eastbuy's sales efficiency.

The source of change can also be traced back to the Dong Yuhui incident at the end of 2023, when then CEO of Eastbuy Sun Dongxu's route of suppressing the top anchor Dong Yuhui was unsuccessful. After the incident, Dong Yuhui started a new live broadcast room called "Walking with Hui".

Live broadcast sales is referred to as IP business relying on big anchors, and Eastbuy certainly realizes the risks involved. In the past, Eastbuy has been trying to break out of this rut by two parallel methods: reducing its reliance on top anchors like Dong Yuhui; and investing in supply chain transformation to develop its own products. Eastbuy's ideal business model is built on the flow of live broadcasts and strives to create itself into a free supply chain retail company.

On June 19th, after this year's 618 festival, Eastbuy held a press conference and systematically showcased the growth of its own brand products: in the second half of the 2024 fiscal year (December 2023 to May 2024), Eastbuy's own brand product GMV exceeded 3.6 billion yuan, a year-on-year increase of 108% and a quarter-on-quarter increase of 74%. Eastbuy also became the only product brand on Douyin with a sales volume exceeding 100 million.

Eastbuy is indeed the company among the live broadcast agencies that is most resolute and successful in its self-development efforts. Its main efforts are focused on the agricultural and food sectors. At this press conference, Eastbuy launched seven of its own products, including crayfish, sour plum soup, mineral water, and summer cool quilts. At the same time, it announced its slogan of "creating an integrated platform for supply and sales in the future."

This self-operated transformation also means the risk of rapid expansion.

After the failure of the strategy of reducing reliance on top anchors, the expansion of self-operated products became the other foundation that supports Eastbuy in realizing its dreams, namely its so-called "live broadcast and shelf mode" of operation. When in their ideal state, the two complement each other: the flow of live broadcasts drives the development of heavy asset self-products, the latter forms a certain foundation and scale to cultivate the product characteristics of the live broadcast room.

Before the smooth interaction of these two parts of the Eastbuy's operation, there is more pain in the run-in between the two.

On one hand, the heavy investment in self-operated products will lower the gross profit margin, increase performance risk, and affect the capital markets' valuation of Eastbuy. In the semi-annual report before November 30, 2023, Eastbuy's gross profit margin decreased from 47.2% to 39.1% year-on-year. The report stated that this was mainly due to the rapid development of our self-operated products and live e-commerce business. Since embarking on the transition to self-operations last year, Eastbuy's stock price has fallen from a high point of HKD 75 to the current HKD 12, a decline of more than 80%.

On the other hand, self-operated rapid expansion requires the support of live broadcast room traffic. During the just-concluded 618, the sales performance of Eastbuy's live broadcast room dropped out of the top ten on Douyin.

Eastbuy is paying the price for more anchors speaking improperly. For a long time to come, Eastbuy will need to balance traffic chasing and self-operated expansion. "Together with Hui" has already surpassed the voice of the main live broadcast brand "Eastbuy"...

These are the issues that Yu Minhong and Eastbuy need to think about and solve.