---
title: "After a Month of Deliberation, 8 Personal Suggestions for Yonghui Superstores' Transformation"
description: "In 2024, the Pangdonglai team assisted Hunan Better Life in its transformation, resulting in a 5.6-fold increase in average daily sales and a threefold increase in customer traffic across 13 stores. During that year, Better Life closed 74 underperforming stores and retained 59 quality ones, achieving profitability through strategic focus, regional advantages, and organizational, supply chain, and product optimizations. Yonghui Superstores, also assisted by Pangdonglai, adopted a similar strategy in 2025: closing many inefficient or loss-making stores and accelerating transformation. This article offers eight personal suggestions for Yonghui's transformation from a third-party perspective."
author: "王正齐"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2025-04-10"
categories: "Retail Formats"
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original_source: "https://mp.weixin.qq.com/s/IMgyu03Hcy7s1HIZh6W7Zg"
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citation: "王正齐. “After a Month of Deliberation, 8 Personal Suggestions for Yonghui Superstores' Transformation.” New Distribution, 2025-04-10. https://xinjignxiao.com/en/articles/after-a-month-of-deliberation-8-personal-suggestions-for-yonghui-superst-e1c65ced/"
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---

# After a Month of Deliberation, 8 Personal Suggestions for Yonghui Superstores' Transformation

> In 2024, the Pangdonglai team assisted Hunan Better Life in its transformation, resulting in a 5.6-fold increase in average daily sales and a threefold increase in customer traffic across 13 stores. During that year, Better Life closed 74 underperforming stores and retained 59 quality ones, achieving profitability through strategic focus, regional advantages, and organizational, supply chain, and product optimizations. Yonghui Superstores, also assisted by Pangdonglai, adopted a similar strategy in 2025: closing many inefficient or loss-making stores and accelerating transformation. This article offers eight personal suggestions for Yonghui's transformation from a third-party perspective.

**2024** saw the Pangdonglai team assist Hunan Better Life in its transformation, with 13 stores seeing an average daily sales increase of 5.6 times and customer traffic tripling.
During that year, Better Life closed 74 inefficient stores and retained 59 quality stores.
Through strategic focus, deep cultivation of advantageous regions, and a series of adjustments and optimizations in organization, supply chain, and products, Better Life achieved a turnaround to profitability that year.
Yonghui Superstores, also assisted by Pangdonglai, adopted the same strategy as Better Life in 2025: closing a large number of inefficient or loss-making stores and accelerating transformation.
Many view this strategy as aggressive, but with Better Life's successful case ahead, data can be shared, experience can be borrowed, and the risk of failure will certainly be reduced.
I personally believe Yonghui's transformation strategy is very correct. There are three core reasons:
First: Many supermarkets across the country still operate on a fee-based model, characterized by product homogenization, poor shopping environments, and inflated prices. The Pangdonglai model is highly competitive compared to these supermarkets, and after transformation, it will be even more competitive than major domestic supermarkets like RT-Mart, China Resources Vanguard, Walmart, and regional chains.
**One step ahead means every step ahead** – completing store upgrades and management improvements ahead of other supermarkets will win more competitive advantages for future development.
Second: The name Pangdonglai itself carries traffic; it is today's top trend. Leveraging Pangdonglai's momentum for transformation is far more effective than doing it alone. This free traffic won't last forever, so it's crucial to seize the moment! **Timing is important!**
Additionally, many supermarkets like China Resources Vanguard, RT-Mart, and Wumart are learning from Pangdonglai. Yonghui's strong association with Pangdonglai (holding its press conference in Xuchang, with Yu Donglai endorsing Yonghui) will save a lot on promotional expenses and greatly enhance the traffic-drawing effect for transformed stores.
Third: Building a model from scratch takes too long and may not yield good results! The Pangdonglai model has been proven; simply copying it is easy and has a high success rate.
Copying is a normal phenomenon in the retail industry. When Walmart launched Sam's Club, it copied Costco; today, JD's Qixian is copying Hema.
**Copy first, then optimize and adjust, gradually building your own model.**
In today's Chinese market, as a membership store student, Sam's Club has more advantages than its teacher Costco. Yonghui also has the opportunity to "surpass the master."
But getting the direction right only accounts for half the success. As a national supermarket, Yonghui copying a model proven only in a regional market and rolling it out nationwide will win short-term competitive advantages, but once other supermarkets complete their transformations, it becomes the standard model for offline supermarkets, and everyone returns to the same starting line.
I believe winning lasting competitive advantages is what Yonghui wants to do today. So what else should Yonghui do next?
Last month, I was on the front lines, communicating with downstream retail partners and industry friends. Combining these exchanges, let me share my views.
I think the following 8 points are worth considering for Yonghui, though these are just my third-party perspectives.
**Nationwide Unified Inventory**
**Or Maintain Some Localization**
Today, Sam's Club and Hema in China use a nationwide unified inventory, only differing in promotional focus by region. In contrast, Yonghui is pursuing localization: Kunming stores introduce Yunnan specialty products, Beijing stores offer Beijing-style items, etc.
Hema's former CEO Hou Yi reflected deeply on this issue, saying: "In 2020, Hema launched localized products, authorizing regional procurement to source local goods. After two years of struggle, I decided to abandon this decision in 2022. Hema has only one procurement center; we cannot meet all consumer needs."
As a national supermarket, we certainly can't outdo local supermarkets in localization. Why do something we're not good at? It also greatly increases management difficulty. We should focus on core categories and turn them into our advantageous categories that competitors can't surpass.
Later, Hou Yi focused on bakery, and today Hema's bakery has become China's largest bakery chain. They started private-label milk and yogurt. This year, Hema is focusing on blueberries among fruits, seeking breakthroughs in this category.
Breaking through one or two categories each year, over a longer period, becomes your core competitiveness!
For this issue, I suggest Yonghui consider it. In his speech, Mr. Ye mentioned Trade Joe's; I believe his team has also studied mainstream American supermarkets and their development history.
H.E.B, a Texas-based local supermarket, has been rated the best supermarket in the US for three consecutive years, with localization as its core advantage.
In the future, Chinese regional chain supermarkets will definitely strengthen localization and make localized products their advantageous categories to counter national chains like Hema, Sam's Club, and Yonghui.
In contrast, Trade Joe's focuses on its core categories for centralized procurement and builds its advantages. Today, Hema is more adopting Trade Joe's approach.
Americans say Trade Joe's competitor is Sam's Club, but Sam's sells large packages while Trade Joe's sells small packages. It's located near residential areas, with small stores, hoping consumers visit daily. As a result, it became the US's king of sales per square foot!
**As a national supermarket, Yonghui can learn from Hema's current approach: define your consumer positioning, provide core products that meet their needs, rather than pursuing regional differentiation. Leverage Yonghui's national advantages and focus on big-ticket items.**
**Transform Everywhere or Focus on Core Regions**
On March 13, Yonghui Superstores announced its second batch of 2025 transformation stores, totaling 24 stores across 19 cities. This indicates the transformed stores are widely dispersed.
The core categories for this transformation are fresh produce, prepared foods, and bakery.
The success of the Pangdonglai model heavily relies on regional supply chain advantages. For these core transformation categories, Pangdonglai's advantages cannot empower Yonghui's stores nationwide; Yonghui needs to reorganize supplier resources in various regions.
If stores are too dispersed, centralized bulk purchasing is impossible, distribution costs rise, and product prices lose advantage.
The biggest risk lies in quality control: new partners need training and effective management. If Yonghui's internal talent can't keep up, management failures could bring significant negative impacts.
Better Life's transformation focused on core regions, building regional advantages. Although Yonghui is a national supermarket, it can also reference Better Life by first focusing on regions with high store density like Fujian, Chongqing, and East China to strengthen there.
**Many regional chain supermarkets are performing well today, and a core factor in their success is density. They focus on core regions, such as Biyoute in the Northeast, Yasi in Hubei, Jiadefu in Lianyungang, Dazhang in Luoyang, and Pangdonglai in Xuchang.**
If Yonghui doesn't focus, it may lose to regional chains in market competition. Today, when you visit US supermarkets, you'll find Safeway, Harris Teeter, Whole Foods, Giant, etc., have similar product structures and shelf displays.
In a few years, supermarkets across China will excel in fresh produce, prepared foods, bakery, noodles, and localized foods. Once regional advantages are established, Yonghui might be squeezed out, just like in Texas today, where national chains like Walmart and Costco are no match for H.E.B, forcing some stores to close.
In the next few years, offline retail competition in first- and second-tier cities will be fierce. For example, in Beijing and Shanghai: Sam's Club and Costco target high-end consumers; Hema and Qixian target mid-to-high-end; Hema NB and Aldi target community discount shoppers; instant retail includes Dingdong Maicai and Xiaoxiang Supermarket.
After transformation, what advantages does Yonghui have compared to them?
If two Hema NB stores open near a Shanghai Yonghui store, plus an Aldi, a Hema Fresh, a Sam's Club within five kilometers, and Dingdong and Xiaoxiang have nearby warehouses, how does Yonghui respond? This scenario will arrive soon. Does Yonghui need to plan ahead?
Today, offline retail in Guangdong, Fujian, and Zhejiang is actually quite backward, especially Fujian, where it's rare to find a decent supermarket in Xiamen or Quanzhou. These provinces are golden regions for future offline retail development. Locals joke that people in these economically developed areas look down on running supermarkets, but that's just a joke!
The provinces with the best regional chain supermarkets are economically less developed ones like Henan, Hebei, and Hubei. There's some truth to that joke.
Yonghui's headquarters is in Fujian. If it focuses on Fujian, Guangdong, and Zhejiang, these three provinces could generate over 100 billion yuan in sales in the future, and current offline retail competition there offers more opportunities than Beijing and Shanghai.
Additionally, Chongqing and surrounding western regions have great potential.
Many third- and fourth-tier cities have unmet consumer demand. Middle-class and affluent families there can satisfy needs for cars, houses, clothing, and travel, but the only unmet need is for high-quality food.
They can't travel to provincial capitals to buy food for daily meals, and supermarkets only offer ordinary food. This is why Hema sells so well in many third- and fourth-tier cities today.
**Whether to focus on core regions to strengthen or to bloom everywhere and then expand to lower-tier cities is worth considering.**
**Before Bare Procurement**
**Suggest Announcing Yonghui's New Trading Terms First**
Today, Luoyang Dazhang and Northeast Biyoute have implemented bare procurement, lowering retail prices and increasing gross margins. For bare procurement items, they buy directly from factories, no returns or exchanges, payment before delivery, and no fees.
Stores handle their own stocking and management, with only promotional staff and promotional item costs borne by suppliers.
Is Yonghui's bare procurement a collective effort, or are suppliers bare while Yonghui wears a bikini?
Since bare procurement is intended, clear rules must be given to all suppliers: What are the total front-end and back-end fees for each category? If no fees are charged, does that apply at headquarters, regional, and store levels? How will suppliers settle? Clear rules will facilitate work across Yonghui's departments and help implement the system.
Yonghui hopes to turn a profit in 2025, and fees are a significant revenue source. Suppliers are guessing whether Yonghui's bare procurement will be like other chains that implemented it.
They might just require suppliers to lower supply prices to match Biyoute or Dazhang, but keep payment terms unchanged and reduce fees slightly, ultimately pushing many suppliers into losses.
Yonghui's cash flow is tight; it needs to calculate how many days of payment terms can be compressed while maintaining normal operations and reasonable inventory.
These terms need to be announced first; otherwise, bare procurement is empty talk, becoming a command for buyers to squeeze suppliers. Without protecting supplier interests, co-creation is impossible, and product innovation becomes water without a source.
Last year, Yonghui already adjusted supplier prices compared to Pangdonglai. This year, it could sign annual contracts with suppliers referencing Pangdonglai's trading terms. I believe suppliers would be willing because Pangdonglai's suppliers (including manufacturers and distributors) likely have higher profitability than Yonghui's.
This will also win supplier support for Yonghui.
Mr. Ye has clearly stated the current supplier-retailer relationship in various speeches: it's a cooperative relationship, creating high-quality products for consumers together.
**Focus on Core Suppliers and Big-Ticket Item Strategy**
**Suggest Establishing Product Promotion and Assessment Standards First**
Getting into Sam's Club is what every supplier hopes for today!
Being in Sam's means certain sales and profits, no losses. Sam's product planning typically starts a year in advance: planning around raw material scarcity or premium quality, unique processing techniques or quality improvements, and formula optimization, repeatedly refining with suppliers.
The cycle is long, R&D and design costs are high, and after product approval, significant investment is needed for raw material preparation or production equipment upgrades. If Sam's doesn't guarantee sales volume, no one would cooperate with Sam's.
Sam's typically gives suppliers three months of orders based on sales forecasts. Fulfilling these orders generally ensures suppliers' investments are rewarded, and also ensures stable supply for new products co-created with Sam's.
Sam's procurement team has been cultivated for years; they understand products and consumers well. Their product development capability is currently the best in China. Each product launch is accompanied by promotional activities to ensure good sales performance.
Sam's has operated in China for many years, and building this system and team is the result of long-term accumulation. I believe Yonghui can learn it too, but it takes time.
**Yonghui wants to develop core suppliers with product R&D and production capabilities, and supply chain advantages to control costs. Yonghui needs to consider whether it can offer such suppliers conditions similar to Sam's.**
In the early stages, Yonghui won't have Sam's sales scale, meaning developing new products with suppliers increases supplier risk, with higher costs and lower returns.
However, starting anything is always difficult, and I believe suppliers will understand. But Yonghui must prepare a system to improve new product success rates; otherwise, if early partners incur losses or product promotion success rates are low, Mr. Ye's plan may stall!
**Before Removing Intermediaries, Consider**
**Do Intermediaries Create Value for Yonghui?**
Regarding removing intermediaries, I think it can't be a one-size-fits-all approach: Pangdonglai is currently Yonghui's biggest intermediary in the transformation. It doesn't produce products; it just white-labels products from factories and sells them to Yonghui. Yonghui can't "remove Pangdonglai."
The Pangdonglai brand brings traffic to Yonghui today. If its products' turnover, gross profit, and sales per square foot meet or exceed Yonghui's category standards, why remove this intermediary?
Intermediaries can be divided into two types**: one is brand operators like Pangdonglai that don't own factories but co-create products with factories; the other is brand agents.**
For the first type, I think removing intermediaries isn't because they earn a margin, but whether the margin is worth it! If the intermediary doesn't add value to the chain and only increases costs, it should be removed.
For the second type, many retailers think they should be removed, but it depends on whether their services are more cost-effective and efficient than self-operation.
Today, Pangdonglai also has many distributors. Many new brands or internet-famous products lack sales teams and rely on distributors. Also, some products consumers need but have low store sales are better handled by distributors.
I think Yonghui should establish a product evaluation standard, assessing each SKU's sales, gross profit, turnover, or sales per square foot. Whether the product is supplied by a distributor or manufacturer doesn't matter; what matters is whether the product's performance meets your standards. That's key.
**Build a Private-Label Marketing Team**
At Yonghui's Xuchang conference, Mr. Ye said Yonghui would develop private-label products, strengthen product team building, enhance product design capabilities, provide high-quality products to consumers, and create 100 single products with over 100 million yuan in sales within 3 years.
The direction is certainly correct, but I believe Yonghui's core products will also be core products for other supermarkets undergoing transformation or current excellent offline chains:
> First, focus on essential and high-frequency products: milk, eggs, frozen, refrigerated, beer, rice, cooking oil, etc.;
>
> Second, follow market trends, white-label popular products from the previous year or expand into new categories based on trends.
Since everyone focuses on these categories or uses the same methodology, price wars will continue in fierce store competition, and private-label products will enter the red ocean.
Private-label products should also be divided into regular and traffic-driving products. For example, Aldi's 9.9 yuan pure grain liquor and 6.8 yuan fried rice are traffic drivers for marketing and communication.
In terms of quality-price ratio, Sam's Club and Costco are certainly the highest because they can charge membership fees. Sam's annual membership fees exceed 2 billion yuan, contributing 2.5% of profits relative to sales, but consumers don't factor membership fees into product prices; they simply compare product prices.
In terms of consumer segmentation, membership fees select middle-class and above families who can accept large packages and have purchasing power, resulting in high per-store output.
Differentiation and uniqueness will definitely be the development direction for future offline supermarket products. As a national chain, how should Yonghui approach product differentiation?
Product development starts with consumer positioning.
All supermarkets undergoing transformation in China target affluent families. With many supermarkets not yet reformed, prioritizing middle-class and affluent families with purchasing power is certainly beneficial for product and shopping environment optimization.
Today, competition in China's offline supermarket sector isn't actually fierce; supermarkets just haven't done well. They focus on fees, not consumer needs, and don't treat meeting consumer needs as core work. Once they change their mindset, offline supermarket sales and traffic will rise.
Today, China has over 100,000 bakery shops, over 500,000 fast-food shops, over 1 million fruit shops, and over 2 million vegetable shops. Such large numbers don't exist in the US or Japan; consumers there buy these products mainly in supermarkets.
**The development direction for today's offline supermarkets is how to attract this traffic into their stores. These categories will definitely be the largest sales categories for offline supermarkets.**
What pain points and itch points do consumers have when buying these products in small shops? That's Yonghui's opportunity. Solve these problems, tell good product stories, build consumer trust in your supermarket, and then trust in the Yonghui retail brand.
Price is crucial, but not the only reason consumers buy. Product uniqueness is important: How are your eggs different from other supermarkets? What are the characteristics of your vegetables? Your fruits, your fish – all are promotional points. Besides communication, consumers must genuinely feel the difference to build loyalty.
To address these tasks, besides building professional procurement and design teams, you need a professional marketing team: focus on Xiaohongshu and Douyin promotion, especially Xiaohongshu, to tell product stories well.
**Emphasize Online Sales**
Hema's online sales account for over 60%, Meituan's Xiaoxiang Supermarket offers 30-minute delivery, JD's Qixian uses one store plus N warehouses, Sam's Club has instant delivery, and there's Dingdong Maicai and Puhui Supermarket.
In first- and second-tier cities, instant retail is developing rapidly, with younger consumers preferring online shopping. In third- to fifth-tier cities, consumers still prefer shopping in stores because the pace of life is slower, and supermarket shopping has become a leisure activity.
Pangdonglai is in Xuchang and Xinxiang, both third-tier cities, so the impact of instant retail isn't obvious. Yonghui's stores are more distributed in first- and second-tier cities, so it can't follow Pangdonglai here. It should continue to develop its previous online sales and increase the online sales share.
A consumer won't have many shopping apps on their phone. Once occupied by Hema, Dingdong, Puhui, or Qixian and habits form, it's harder for Yonghui to win them back later. So, it's crucial to catch up quickly.
Especially in areas not yet covered by Hema and other instant retail apps, strive for first-mover advantage.
**Use KPI Assessments to Prevent Corruption**
Yonghui's transformation mentions sunshine procurement. Every supermarket owner hopes to establish it, but it's hard in reality.
Relying solely on anti-corruption systems isn't necessarily effective. Combining KPI assessments for procurement can protect company interests and regulate procurement behavior.
Specifically, set gross margin and product turnover targets for each category. Each new product introduced by a buyer should have corresponding monthly sales and profit targets.
If a product fails to meet company targets within three months, it's eliminated. Only products meeting sales and profit targets, and passing consumer evaluations, can become regular products.
This way, introducing new products can't rely solely on relationships; even with connections, poor products won't enter Yonghui. Rank buyers annually by the number of new products co-created with suppliers and those converted to regular products. Through a horse-race mechanism, excellent buyers will naturally emerge. Combined with strong rewards, the procurement team's professional capabilities will be greatly enhanced.
I believe under such an assessment system, suppliers relying solely on corrupt procurement can't succeed. To become a Yonghui supplier, they must excel in product R&D, manufacturing, supply chain management, and sales promotion.
**So I think establishing an effective assessment standard for Yonghui's products is more important than anti-corruption, and it can better stimulate product innovation from suppliers and procurement.**
I believe today is the golden age for China's offline supermarkets. Supermarkets undergoing reform and upgrade, like Better Life and Yonghui, are enjoying the dividends of reform. But competition in China's offline retail will remain fierce, and the dividend period won't last long.
Supermarkets need to define their consumer positioning, create unique products for their consumers, and product strength is the core competitiveness of future supermarkets.
I also look forward to seeing Yonghui find its unique positioning in this wave of reform, amplify it into a competitive barrier, and maintain long-term competitiveness in the fierce market competition!
All views in this article are solely the author's. If readers have different opinions, feel free to leave a comment or contact me directly for discussion! I also hope these views provide an additional perspective for Yonghui's transformation.


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## Citation metadata

- Publisher: New Distribution
- Author: 王正齐
- Published: 2025-04-10
- Canonical: https://xinjignxiao.com/en/articles/after-a-month-of-deliberation-8-personal-suggestions-for-yonghui-superst-e1c65ced/
- Original source: https://mp.weixin.qq.com/s/IMgyu03Hcy7s1HIZh6W7Zg

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