At the start of 2025, Yonghui Superstores made several major moves. First, effective February 6, Yonghui adopted a new organizational structure. In operations, it implemented a three-tier structure of "headquarters-region-store," dividing the country into 28 regions and granting more authority to the front line. On the platform side, it adopted centralized operations, integrating new service support and empowerment units such as the Operations Center, Merchandise Center, Brand Marketing Department, and Home Delivery Business Unit. Second, Yonghui announced the first batch of stores to be renovated in the Year of the Snake, totaling 20 stores across 15 cities, including eight new cities: Wuhan, Taiyuan, Nanning, Kaifeng, Wenzhou, Dongguan, Mianyang, and Fuqing. Third, Yonghui began piloting 24-hour full-category delivery services in Fuzhou, with the free delivery threshold unchanged. Despite these seemingly positive plans, they still cannot mask Yonghui's current difficulties. Pangdonglai is not a panacea In 2024, Yonghui's biggest move was learning from Pangdonglai. In May 2024, Yonghui Superstores' Zhengzhou Xinwan Plaza store officially began renovation, marking the start of its Pangdonglai-style transformation. Before the 2025 Spring Festival, Yonghui had opened 41 Pangdonglai-renovated stores in 18 cities, accounting for 5.28% of its total stores. Of course, learning from Pangdonglai has been somewhat useful for Yonghui. First, it boosted the stock price. On April 30, 2024, Yonghui's closing price was 2.43 yuan. On May 8, a renovation announcement caused Yonghui's market value to surge by 2.2 billion yuan in a single day, and the stock price began to climb. In December 2024, it reached a two-year high of 7.87 yuan per share, more than doubling from before the renovation. Although it has since fallen back to around 5 yuan, it is still one of the better performances since 2022. Second, the renovated stores' revenue looks impressive. For example, the first Pangdonglai-renovated store, Yonghui Zhengzhou Xinwan Plaza, saw customer traffic increase 5.3 times and average daily sales increase 13.9 times on its first day of operation. Yonghui's first self-renovated store in Beijing saw total daily sales increase 6 times. During the Spring Festival, these renovated stores attracted nearly 4 million customer visits, with bakery sales growing over 520% year-on-year and prepared food sales surging over 387% year-on-year. Both capital markets and consumers responded enthusiastically. From the data, learning from Pangdonglai seems to be a good medicine, and Yonghui should continue. At the start of the Year of the Snake, Yonghui announced the first batch of 20 stores to be renovated in 2025, covering 15 cities. However, the problems that Pangdonglai-style renovation can solve are limited. First, after field visits and research on Yonghui's renovated stores, Yilan Business found that the current transformation is more superficial. At the employee level, Yonghui's employment logic has not changed. Although data shows that Yonghui's average employee salary increase exceeded 20%, with some stores like Zhengzhou Xinwan Plaza seeing wage increases of 80%, this growth is based on an originally low salary base. For example, at Zhengzhou Xinwan Plaza, employee salaries increased from 2,500 yuan to 4,500 yuan, which is moderate for the area, but still significantly lower than Pangdonglai's minimum base salary of over 5,000 yuan in Xuchang, a fourth-tier city. Moreover, many Yonghui employees say that while wages have increased, the reasons for deductions have also multiplied. After the renovation, Yonghui introduced a five-color card deduction system covering everything from personal hygiene to the work environment. Violations result in fines ranging from a few hundred to several thousand yuan. This not only weakens the positive effect of salary increases but also dampens employee morale to some extent. In addition, work intensity has increased. On Xiaohongshu, an employee posted that before joining, they were told the probation period was one month, but after joining, it became three months. Frequent training took up rest time, and they often worked overtime without pay, resulting in a very poor experience. Pangdonglai's ability to win recognition is largely due to its emphasis on employee care and benefits. In contrast, Yonghui still has a long way to go. At the product level, Yonghui has not yet established itself. Many of the hit products introduced by the media belong to Pangdonglai, not Yonghui. When consumers flock to Yonghui only to buy bakery products labeled with Pangdonglai tags, this company, once known for its fresh supply chain, has to some extent become a consignment seller. Yonghui is very vigilant about this and has begun to gradually reduce and remove Pangdonglai products. For example, at the Hangzhou Longhu Binjiang Tianjie store, the store launched prepared foods like cold-mixed chicken feet, which are actually imitations of Pangdonglai's viral products. This exposes the speculative nature of its product development—trying to ride the traffic wave while attempting to retain its original supply chain system, leaving consumers confused about Yonghui's positioning. At the same time, strengthening private-label product development places higher demands on Yonghui's capital. The development, production, and management of private labels require additional time and processes, potentially affecting payment cycles. Initial development and promotion costs are high, and the turnover of private labels may not be as fast as mature brands, putting pressure on cash flow. Second, the renovation is just an adrenaline shot; its effects are diminishing over time. Industry insiders told Yilan Business that many renovated stores have seen significant declines in customer traffic and sales, with some even returning to pre-renovation levels. Moreover, consumer enthusiasm for the "renovation" concept is cooling, and the growth effect from renovations is gradually diminishing. For example, the Yonghui Zhengzhou Xinwan Plaza store renovated in May saw average daily sales increase 13.9 times on its first day; the Hanhai Haishang store renovated in August saw sales growth drop to 8.2 times; and the Shijingshan Xiduolong store renovated in October saw average daily sales 6 times higher than before renovation. Finally, the cost of renovation and store closures is higher than imagined. According to reports, renovating a store in the Pangdonglai style costs an average of 8 million yuan, and closing a store also incurs costs. Based on financial reports and official website data, Yonghui has closed 167 stores since July 2024. The unexpired rent and employee placement for these stores represent significant expenses. However, after Miniso became a major shareholder of Yonghui, both Miniso's Ye Guofu and Yonghui itself have branded themselves with the Pangdonglai-style renovation label. It can be said that learning from Pangdonglai has become a path Yonghui must continue. 24-hour service may not be rosy In addition to renovations, Yonghui is also trying to increase revenue by extending business hours. On February 11, Yonghui began piloting 24-hour delivery services. Yilan Business learned that Yonghui only launched this service in its home base of Fuzhou. The warehouses providing 24-hour full-category delivery are distributed as follows: 4 in Cangshan District, 2 in Changle District, 2 in Minhou County, and 1 each in Gulou, Taijiang, and Jin'an districts. According to tests, when the delivery address is set within the coverage area of the 24-hour delivery pilot warehouses, the ordering pages on platforms such as the Yonghui Life app, Meituan, and Ele.me show that delivery is available 24 hours a day. On the Yonghui Life app, orders meeting the free delivery threshold (28 yuan, same as daytime) enjoy free delivery. On Meituan and Ele.me, consumers still need to pay a delivery fee ranging from 3 to 8 yuan. In areas not yet covered by the pilot, delivery times align with store business hours. The success of Yonghui's 24-hour delivery service depends on whether it can generate revenue to cover costs. If sales volume does not meet expectations, the idea of spreading marginal costs will be difficult to achieve. Although Yonghui has just launched this service and many data points are not yet conclusive, we can analyze it from an overall perspective. From the perspective of product demand, Yonghui aligns well with consumer needs. Ele.me data shows that puffed snacks, alcoholic beverages, instant food, fresh milk, and ice cream are particularly popular at night, while categories like beauty tools, underwear, and towels have seen significant growth in delivery orders, with year-on-year increases exceeding 200%. From the perspective of revenue increment, Gong Yizhi, an analyst at Guojin Securities Research Institute, once said that sales during the late-night period from midnight to 6 a.m. can account for about 15%-20% of total daily sales. Assuming store rent and depreciation are linear and utility prices are roughly the same, nighttime operations can add 15%-20% to store profits. Considering that nighttime product gross margins are slightly higher, the revenue share from nighttime operations may be even greater. But can these cover the costs of 24-hour operations? First, 24-hour operation does not mean that every hour has the same input-output ratio. Ele.me data shows that in 24-hour convenience stores, nighttime orders (20:00-4:00) account for the highest proportion at 35%, followed by lunch and dinner scenarios. Meituan delivery data shows that for office workers ordering tea drinks at workplaces like office buildings and parks, dinner time (16:00-21:59) accounts for 20.5%, and nighttime (22:00-04:59) accounts for 9.8%. From these data, it can be inferred that in 24-hour operations, at least the period from 4 a.m. to 6 a.m. has limited incremental sales. Second, nighttime delivery costs are higher than daytime, and it is likely that after all the effort, little profit remains. Assuming a single warehouse in Fuzhou has 20% of orders at night, with an average of 1,000 orders per day, that would be about 200 nighttime orders. With an average order value of 50 yuan and a gross margin of 21.58%, nighttime gross profit would be about 2,200 yuan. However, taking Meituan as an example, the nighttime delivery price is 5 yuan, and at least 1,000 yuan in rider fees would be needed. Additionally, warehouses need staff for operations and sorting. According to Yonghui's job postings, the hourly wage is 18 yuan. If each warehouse has 2 employees working 8 hours, at least 288 yuan in labor costs would be incurred per night. After deducting warehouse operating costs and other expenses, profits may be minimal. Finally, even with 24-hour operations, Yonghui faces many competitors. Meituan has launched a 24-hour convenience store project, and Ele.me has launched a "24-hour, order anytime" joint marketing campaign. In Fuzhou, taking Yanshan Building as an example, within a 5-kilometer radius, besides Yonghui Superstores, there are at least 5 other convenience store and supermarket brands operating 54 24-hour stores. During normal business hours, Pupu Supermarket has a significant advantage in the Fuzhou market, with daily orders reaching 160,000 to 200,000 in 2020. Yonghui has reached a critical moment However, while Yonghui continues to seek growth, internal crises are becoming harder to hide. First, Yonghui's financial situation is not optimistic. In terms of performance, Yonghui has been loss-making for four consecutive years. From 2021 to 2023, total losses amounted to 8.036 billion yuan. Adding the projected loss of 1.4 billion yuan in 2024, total losses approach 10 billion yuan. As of the third quarter of 2024, Yonghui's cash reserves were only 3.686 billion yuan, a sharp year-on-year decline of 44.66%, the largest cash flow decline since 2018. If losses continue at this rate, Yonghui's cash will last at most three years. Second, this retail giant is still burning cash at an alarming rate. One, it continues to invest heavily in renovations. The first batch of 20 stores in 2025, at a cost of 8 million yuan per store, will require at least 160 million yuan. Bao Yuezhong, founder of Baum Consulting, also emphasized that Yonghui's renovated stores have introduced many Pangdonglai products. Once payment terms expire, there will be another large cash outflow. Two, it is closing underperforming stores. According to reports, Yonghui plans to close about 200 more stores in 2025. If store operations do not improve, Yonghui could quickly face cash flow depletion. Finally, and most critically, Yonghui may experience leadership turmoil in the first half of 2025. With Miniso becoming the largest shareholder of Yonghui, the influence of the Zhang brothers, Yonghui's founders, is gradually weakening. Although Miniso's CFO Zhang Jingjing said that "it is expected not to control the majority of board seats," this does not mean Ye Guofu has no say on the board, nor does it mean he will give up on this matter. Moreover, according to Yilan Business, some of Yonghui's public relations and marketing communications work has already been taken over by Miniso. The communications for the newly renovated store in Beijing have already seen the presence of the Miniso team. In this race against time, Yonghui must both compete with the cash flow countdown to find growth points and maintain business strategy stability amid leadership changes. It can be said that Yonghui is truly on the edge now.