(Yicai Global) Jan. 31 -- Oriental Select, a live-streaming e-commerce platform owned by China's New Oriental Education and Technology Group, has revealed for the first time it has started producing food amid tightening regulations on after-school tutoring.

Oriental Select will invest CNY17.5 million (USD2.6 million) to expand its sausage production plant, marking its first public disclosure of investment in food production, the platform said in a statement on a social media account today. 

After the government tightened its rules on the burgeoning sector of after-school tutoring in 2021, Beijing-based New Oriental has been looking for alternative revenue streams and e-commerce has borne fruit.

The 14,000-square-meter factory in central China's Henan province will mainly make sausages, with an initial production capacity of 18,000 tons per year, followed by additions based on orders, per the firm. The plant currently makes a best-selling product on Oriental Select. The three available sausage flavors have sold 2.4 million units with over 340,000 loyal customers, the seller added.

Oriental Select has signed an agreement with the operator of the factory. The two parties will establish a JV to handle the expansion and buy the equipment. The platform will have a 30 percent stake in the JV.

From June to November 2022, transactions on Oriental Select reached CNY4.8 billion (USD710 million), and over CNY1 billion of that was contributed by brands owned by the platform, according to Koolearn Technology, the operator of Oriental Select. Koolearn is a unit of New Oriental.

Koolearn said during an earnings call on Jan. 18 that Oriental Select plans to invest in suppliers to increase investments in research and development, production, and raw materials to improve the quality of its products.

Editor: Emmi Laine, Xiao Yi