A state newspaper article belittling China’s celebrity cram school founder backfires

The Economic Daily blasts education giant New Oriental for pivoting from tutoring to live streaming e-commerce to make ‘quick money’

Entrepreneurs in the after-school education industry are struggling to survive under Beijing’s crackdown on private tutoring

Reading Time:2 minutes

Yu Minhong, founder of New Oriental, speaks to the media on March 3, 2015. The entrepreneur said last week that his company will start selling farm products through live streaming after Beijing banned private education providers from teaching school subjects to children. Photo: Simon Song

Published: 7:00pm, 16 Nov 2021Updated: 7:30pm, 16 Nov 2021

A state media article criticising a new business move by the embattled education firm New Oriental has triggered an online backlash, as netizens came to the defence of its celebrated founder who is scrambling to respond to China’s sweeping ban on private tutoring for children.

In an article titled “New Oriental should not copy Li Jiaqi”, the state-run Economic Daily said the Beijing-based cram school chain should apply its expertise in education to cultivating agricultural talent instead of seeking to “earn quick money” by pivoting to selling farm products through live streaming. Li, widely known as the “lipstick king” for his feat of selling 15,000 lipsticks in five minutes, is a top live-streaming salesman in China.

Yu Minghong, founder and president of New York-listed New Oriental, announced last week that his company will shut down nearly 1,500 training centres. As part of its transformation plan, New Oriental will set up a “big agricultural platform” with the help of hundreds of employees, who have been temporarily reassigned from their teaching jobs to become e-commerce live streamers.

“As a leading company in the private tutoring industry, New Oriental’s transition is meaningful as a bellwether,” Economic Daily author She Ying wrote in the Sunday article. “If the company only jumps from one industry that makes quick money to another one, it may not be the best role model.”

The article quickly drew tens of thousands of views on WeChat and became a trending topic on microblogging platform Weibo, with many commenters protesting the article’s stance and empathising with New Oriental’s attempt to save its business.

“The education industry is suffering significant losses thanks to new policies, and companies have no choice but to pivot,” one person commented under the article on WeChat.