BEIJING, November 8 (TMTPOST) — Chinese education giant New Oriental Education & Technology Group plans to build a comprehensive agricultural product e-commerce platform on which New Oriental"s teachers will be selling fresh produce through livestreaming, the company’s founder Yu Minhong said during a livestream show. New Oriental’s transition will facilitate the sale of agricultural products and revitalize China’s countryside.
Source: Visual China
New Oriental will shut down its K12 business, Yu revealed. According to the company’s founder, New Oriental will close around 1,500 recently furnished tutoring centers. The company will have to incur huge expenses for exiting the K12 business, including the cost from breaking contracts, tuition refunds, and compensations for employees. However, New Oriental currently has enough cash to cover all the balance, according to Yu. As a result of exiting from K12 business, Yu also promised that around 80,000 sets of desks and chairs will be donated to schools in undeveloped areas. Each set is worth over RMB700.
To date, New Oriental’s tutoring centers in Zhengzhou, Xi’an, Hefei, Chengdu, Yichang, Foshan, Lanzhou, Lianyungang, Wuhan, Urumqi, Taiyuan, Haikou and other cities have donated a total of 73,366 sets of desks and chairs.
The recent development marks New Oriental’s withdrawal from the K12 industry in the wake of the implementation of the “double reduction” policy.
In 2020, the K12 business contributed over 60% of New Oriental’s revenues. In July this year, China started to crack down on private tutoring businesses by adopting the “double reduction” policy that is expected to reduce students’ burden and promote education equality.
New Oriental’s transition plan was already hinted in September this year after the company set plans to lay off around 40,000 employees. Yu expressed the idea of doing e-commerce livestreaming at a senior management meeting, commenting that if Viya (a top e-commerce live streamer in China) could sell over ten billion yuan of goods a year, then he might be able to do it with the company’s teachers.
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