Until a few months back, Yu Minhong was known as a founder of a hugely successful educational company, whose key staff members were well-regarded teachers. On Tuesday, he and his small team took a giant leap of faith into China's burgeoning livestreaming segment, the latest driver of the domestic e-commerce sector, the backbone of the retail industry.

Their collective leap was not exactly a nimble or opportunistic business strategy. It was necessitated by the sudden downturn in the fortunes of China's private tutoring sector, following a regulatory crackdown in July to rein in its haphazard growth and unhealthy market competition.

Yu, founder of private tutoring giant New Oriental Education & Technology, and his colleagues debuted as e-commerce livestreamers and sold－wait for it－farm products like corn, cherries and edible fungus. Their three-hour opening session raked in 50 million yuan ($7.8 million).

Wang Peng, an associate professor at the Hillhouse Research Institute, which is part of the Renmin University of China, said he is very impressed.

"New Oriental has the advantage of offline and online channels with nationwide reach, which will greatly help in e-commerce via livestreaming. What's more, Yu himself is a well-known figure, a virtual brand, so he should be able to help attract consumers online," Wang said.

Yu himself sounded delighted and optimistic. "E-commerce via livestreaming can integrate well with New Oriental's business, as many of our teachers are born influencers, given their eloquence and sense of humor. We've made a name for ourselves first in the learning sector. We are confident of leveraging our strengths for success in our new foray," said Yu.

New Oriental's livestreaming platform is called Dongfang Zhenxuan, which translates as "selecting the best in the Orient". Dongfang Zhenxuan is 100 percent owned by Hong Kong-listed Koolearn, New Oriental's subsidiary specializing in online education.

On Wednesday, however, Koolearn's shares tumbled almost 22 percent to HK$5.64 (70 cents)－probably a knee-jerk investor reaction to uncertainty over the livestreaming foray's future prospects.

Data from analytics firm Tianyancha showed that Sun Dongxu, CEO of Koolearn, leads the new company whose registered capital is 10 million yuan.

Wang of Renmin University said: "The livestreaming venture is part of New Oriental's efforts to reinvent itself in response to the new regulations in the private tutoring sector. E-commerce via livestreaming is a sunrise sector with tremendous future growth potential."

Yu said earlier that the goal of e-commerce via livestreaming is to help drive rural vitalization and make high-quality agricultural products available to consumers and also increase farmers' income.

"New Oriental can also leverage its training and online technology advantages to diversify into agricultural training online, which can help farmers to broaden their ken and improve their skills."

New Oriental, Yu said, is still vigorously developing and upgrading its core tutoring business lines, including college student education and international education.

Wang, however, said: "Many challenges still remain for the company. The livestreaming sector has already entered a phase of restructuring and is embracing very high standards for management, supply chain quality, price bargaining on livestreaming sessions, and anchors' presentation skills.

"Moreover, New Oriental is focused on agricultural products. This industry has higher logistical requirements to guarantee freshness and timeliness, and is highly competitive."

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