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The dispute over the selection of 8 yuan corn in the East, which had already ended with Simba’s apology, has once again sparked heated discussions because of the remarks of the Douyin user “Northeast Farmer’s Wife”.
Recently, the “Northeast Farmer’s Wife” who claimed to be Dongfang’s selected corn supplier claimed in the Douyin live broadcast that she was the supplier of Dongfang’s selection of 6 yuan of corn, and the same corn in her live broadcast room only cost 3.6 yuan.
On September 29, in response to the removal of all the products of the supplier, Northeast Nongsao, from the live broadcast room, Dongfang Selection customer service responded, “In order to ensure quality, manufacturers cannot over-produce, and the output of products is not fixed. Links to listings.”
Regarding the above remarks of the Northeast Nongsao, Ben Lun Finance sought confirmation from Dongfang Selection, but as of press time, the other party has not responded. In response to the fact that all the products were removed from the Douyin window of the Northeast Nongsao after the remarks were made, Box Lunch Finance also sent a confirmation to the Northeast Nongsao, and the other party said that there was no response at present.
A
The Northeast Farmer’s Wife, who professed to be Dongfang’s selection of corn suppliers, faced outside discussions about selling corn at 3.6 yuan, the anchor said in the live broadcast, “This corn has been sold for more than ten years, because of the cooperation with a certain brand. Now, we can’t sell it again in the future?”
The anchor further explained in the live broadcast, “This matter was not fermented by us, but sent by many big Vs, including the family members who bought corn, when they saw the words “Northeast Farmer’s Wife” written on the package, and found it by themselves. Is it our fault to do this? Or do we have to violate the relevant regulations and not write specific manufacturer information? That is not allowed.”
On Douyin, the certification of the Northeast Nongsao is Jilin Nongsao Food Co., Ltd. According to the company’s information, Nongsao Food Co., Ltd. was established on July 26, 2012 with a registered capital of 15 million yuan. The company’s largest shareholder is the founder Sui Shuxia. Public information shows that Nongsao Food mainly purchases corn from the ground, and then produces and processes it into fresh corn.
Dongfang Selection is one of the customers of the Northeast Nongsao. The cost of purchasing, production and processing of corn is borne by the Northeast Nongsao, while Dongfang Selection bears a series of costs for corn from the supplier to the Dongfang Selection live broadcast room, and then to the consumers.
Regarding the reason why Dongfang selected 6 yuan for a corn, Zhuang Shuai, an expert in the retail e-commerce industry and founder of Bailian Consulting, said, “Including the marketing and promotion costs of advertising in Dongfang, teachers and operations and other labor costs, the cost of Dongfang is It is higher than the supplier, and raising the price can also directly increase the profit margin of the company.”
A self-proclaimed corn dealer who used to be the Northeast Nongsao, the blogger @南北南西东西苏雅君 posted a video saying that the ex-factory price of 200 grams of the Northeast Nongsao is about 4 yuan, and the freight from the northeast to Nanjing is 5 yuan per ton. If the shipment is less than one ton, the shipping cost is 10 yuan. That is to say, the cost price of a piece of corn is about 4.4 yuan, the wholesale price is 4.8 yuan, and the retail guide price is 6 yuan a piece.
In other retail channels, such as Tmall Supermarket, the price of 8 pieces of ready-to-eat corn from the Northeast Nongsao is 59.9 yuan, which is 53.9 yuan after discount. The price of one corn is more expensive than Dongfang Selection.
On Douyin, some netizens also posted different prices of corn bought in the live broadcast room of the Northeast Nongsao and Dongfang Selection, saying that the 6 yuan corn in the Dongfang Selection is 350 grams, while the Northeast Nongsao is 3.6 yuan a piece. Corn is only 200 grams, and the latter is more than 1 cent more expensive than the former.
B
The source of this corn price controversy came from a live speech by Simba on September 18. In the live broadcast, Simba opened up against Dongfang Selection, bluntly saying that the 6 yuan corn in the Dongfang Selection live broadcast room is too expensive, and said that Dongfang Selection “sells high-priced products and advertises that the grain is cheap and hurts farmers, which is purely deceiving the common people.” .
Simba advertises himself as the son of a farmer, explaining that the corn from the ground is only 7 cents a piece, and finally sold for 6 yuan a piece, and the profit of Dongfang Selection can reach 40%. , if you tell a story, your stuff is expensive, why don’t I understand this truth?”
Afterwards, Dong Yuhui also explained in the live broadcast the reason why Dongfang selected corn was expensive, saying that different corns had different qualities. According to Dong Yuhui, most of the corn is not for human consumption, but is used to raise livestock, and this part of the corn is 4 or 5 cents a piece. The corn selected by Dongfang is good corn from some northeastern regions.
Dong Yuhui also explained the so-called problem of helping farmers, saying that if all the money was earned by farmers, it would be impossible. Who would buy corn if there was no profit, and no one would earn this money without packaging, express delivery, and after-sale by manufacturers. How could corn be? sell away?
According to the latest financial report released by New Oriental Online, as of May 31, New Oriental Online’s live broadcast e-commerce business revenue was 24.6 million yuan, the cost of revenue was 15.3 million yuan, the gross profit was 9.3 million yuan, and the gross profit margin was 37.8%. As for the reasons for the high profit margin, Dongfang Selection gave two explanations in the financial report: one is that it did not buy traffic, which saves market fees; the other is that there is no share for the anchor.
What Dong Yuhui said is that most of the corn is used to raise livestock is also the reality. As one of the main raw materials of feed in my country, a data from China Business Intelligence Network shows that feed consumption in corn consumption in 2020 will account for as high as 71%, and other consumption such as food will only account for about 5%.
In the case of disputes between the two factions of netizens who support Simba and Dong Yuhui, some farmers in Northeast China also began to speak out.
On September 20, Liu Meina, who called herself a “born and raised Wuchang farmer who returned to his hometown to start a farmer after the 1980s” on Douyin, made a calculation for everyone, taking the fresh sticky corn produced in the Wuchang area as an example:
Fresh sticky corn has time requirements, and it can take no more than 4 hours to get home. Therefore, it also has requirements for planting land. It needs good traffic, large plots, and large harvesters. Such land will cost 1800-1800 yuan per mu to contract in Wuchang. 2,000 yuan, 4,000 plants per mu of land, and the contract fee alone is 50 cents per corn. In addition to agricultural machinery, refueling, maintenance, labor, seeds, fertilizers, and farmers’ profits, the price of a corn has risen to 1.5 yuan to 1.7 yuan, and there are chains of craftsmanship, transportation, packaging and delivery.
According to Liu Meina, the first corn crop of about 350 grams is basically between 2.7 yuan and 3 yuan after processing. In the later stage, there will be warehousing, logistics, packaging labor, packaging materials, express delivery and after-sales after bag inflation, and Commissions for sales platforms, etc.
This discussion started by Simba and Dong Yuhui ended with Simba’s apology after several days of fermentation. On September 20, Simba bowed and apologized in the live broadcast room, “I’m taking up public resources, I’m sorry for this company, there may be too much pressure recently.”
Dong Yuhui also responded in the air: “You and I have different positions, both are right, don’t convince each other.”
C
In fact, the most expensive products sold by Dongfang Selection are not only corn. The so-called “selection”, Yu Minhong explained at the beginning of the live broadcast: Dongfang Selection selects real, good, and uncontaminated agricultural products; second, these agricultural products can be eaten by themselves or given as gifts go out.
From the very beginning, Dongfang Selection has not taken the route with the lowest price on the entire network. On December 28 last year, at the beginning of the live broadcast of Oriental Selection, the agricultural products sold in the live broadcast room were once dubbed by netizens as “luxury goods” in agricultural products.
It is worth noting that the corn that caused the controversy this time is a product selected by Dongfang. Since January this year, Dongfang Selection has begun to explore self-operated products and create self-operated brands, involving fresh fruits and vegetables, casual snacks, meat products, beverages and other categories.
Yin Qiang, CFO of New Oriental Online, once mentioned at the financial report meeting, “We have indeed made more selection and greater investment in self-operated products, and we are equivalent to buying them back and selling them through underwriting. Take more risk, so the gross profit margin of self-operated products will be higher.” Yin Qiang said that the specific data will be announced in the next financial report of New Oriental Online.
According to Sun Dongxu, CEO of New Oriental Online, Oriental Selection plans to launch 5-6 self-operated products every month. In the future, self-operated products will be controlled at a relatively high proportion, but the proportion of GMV (gross merchandise transactions) will not exceed half.
In the future, with the increase of Dongfang Selection’s self-operated products, how to deal with the relationship with farmers, suppliers and other supply chains will be a continuous challenge for Dongfang Selection.
Zhuang Shuai said that a model like Dongfang Selection, which sells many items and categories, is called selected e-commerce. This model is actually very passive and much more difficult. First, it is difficult to expand the scale, and second, the sales and repurchase rates are not stable enough. “So in this process, we must continue to cooperate with middlemen and wholesalers. If this is the case, then the game between Oriental Selection and suppliers will continue to exist, which is inevitable.”
The difficulties left to the selection of the East are far more than that. Recently, Oriental Selection plans to establish 20 self-operated product warehouses in five cities of Beijing, Guangzhou, Hangzhou, Zhengzhou and Chengdu to provide nationwide logistics service guarantee for self-operated products. The warehouse distribution service is provided by SF Express and JD Logistics.
Warehousing and logistics is a money-burning investment. The “Economic Observer” reported that according to industry estimates, the cost of renting a warehouse in a first-tier city is about 10-30 yuan per square meter. If a warehouse area is 5,000 square meters, the monthly rent alone will cost 50,000-150,000 yuan. This does not include the investment in warehouse facilities, management and operating staff wages.
Bringing agricultural products to the market connects two ends: farmers, agricultural cooperatives, agricultural enterprise producers, and agricultural companies at one end; consumers at the other end, which needs to take into account the interests of both producers and consumers. How to deal with the relationship between the two ends is an unsolved problem left to Dongfang Selection.
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