As winter hits, online education firm turns to down jackets for business
Much chatter online recently said multi-billion dollar online education company Yuanfudao will change its service from tutoring to selling down jackets following a new guideline which imposes restrictions on tutoring classes.
But Yuanfudao said on Wednesday that its down jacket business is a financial investment and will run independently. Its major business will still be educational services, the Shanghai Observer website said.
Last year, Yuanfudao was one of China's top education and science companies valued at US$10 billion.
Business information provider Tianyancha says Yuanfudao wholly owns a Beijing-based garment company and the down jacket business is likely to be independent of Yuanfudao.
Beijing Bingyuan Garments Co was set up on September 30 and its business covers fields including garments, hats and shoes, knitwear and textiles, daily necessities, artware and fashion design.
It has not detailed the source of its funds.
Beijing News cited an unidentified Yuanfudao worker saying the company is organizing a team of designers for adult down jackets.
On online recruitment platform Boss Zhipin, Yuanfudao has posted recruitment information for costume designers, seeking fashion design professionals with five-years or more experience as well as some other garment-related positions.
Established in 2012, Yuanfudao, whose original name was Fenbiwang (Chalk Site), focused on preparing students for tests and on kindergarten to the end of high school learning.
The tutoring firms, especially those featuring K-12 services, were badly hit after Chinese authorities in July rolled out a series of strict regulations to deal with off-campus training, aiming to ease the burden of students undergoing compulsory education.
Extracurricular tutoring providers are prohibited from teaching at weekends and during the summer and winter breaks.
In late August, several established tutoring brands such as Qiwen Education, Juren Education and Greenlight Kids Education faced bankruptcy and liquidation.
Yuanfudao also developed many smart education devices. But it has shifted to more profitable down jackets.
During Singles' Day last year, leading down jacket maker Bosideng's sales reached a record 1.5 billion yuan (US$234 million) – 50 percent up from 2019.
Amid the current cold wave, down jackets topped the sales list of discount e-retailer Vip.com on October 14 and the turnover was five times than the same period last year.
But some netizens are not optimistic about Yuanfudao's new business.
On Zhihu, a major Q&A platform in China and akin to Quora, a netizen claiming to be a former garment industry worker said the supply chain of down jackets is almost the most complicated of all apparel categories.