---
title: "From \"Self-Procurement\" to \"Private Brand\": Pangdonglai's Path Is Hard to Replicate"
description: "Driven by the \"Pangdonglai renovation\" of supermarkets, China's supermarket sector has seen a boom in private brands. Many see Pangdonglai's results but not its growth history. With over 20 years of private brand history, Pangdonglai's journey is difficult to replicate quickly. Without knowing its history, one cannot grasp its essence or learn from its present. Having followed Pangdonglai for over 15 years, I have witnessed its complete transformation from \"self-procurement\" to \"private brand.\" Reviewing this history may help companies learning from Pangdonglai find their own path."
author: "刘春雄"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2026-04-23"
categories: "Brand Marketing, Retail Formats"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/PT3mKvdKOqe_cT-b8TEQQw"
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citation: "刘春雄. “From \"Self-Procurement\" to \"Private Brand\": Pangdonglai's Path Is Hard to Replicate.” New Distribution, 2026-04-23. https://xinjignxiao.com/en/articles/from-self-procurement-to-private-brand-pangdonglai-s-path-is-hard-to-rep-a7d24f16/"
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---

# From "Self-Procurement" to "Private Brand": Pangdonglai's Path Is Hard to Replicate

> Driven by the "Pangdonglai renovation" of supermarkets, China's supermarket sector has seen a boom in private brands. Many see Pangdonglai's results but not its growth history. With over 20 years of private brand history, Pangdonglai's journey is difficult to replicate quickly. Without knowing its history, one cannot grasp its essence or learn from its present. Having followed Pangdonglai for over 15 years, I have witnessed its complete transformation from "self-procurement" to "private brand." Reviewing this history may help companies learning from Pangdonglai find their own path.

Driven by the "Pangdonglai renovation" of supermarkets, China's supermarket sector has seen a boom in private brands. Many see Pangdonglai's results but not its growth history. With over 20 years of private brand history, Pangdonglai's journey is difficult to replicate quickly.
Without knowing Pangdonglai's private brand history, one cannot see its true essence or learn its present. I have followed Pangdonglai for over 15 years and have seen its complete transformation from "self-procurement" to "private brand." Reviewing this history may help those companies learning from Pangdonglai find their own path.
The Three Stages of Pangdonglai's Private Brand Upgrade
In 2010, one of my franchisees opened a "store-in-store" at Pangdonglai, which piqued my curiosity, so I made a special trip to investigate.
At that time, Pangdonglai did not talk about "private brands" but only "self-procurement."
Together with four other Henan companies, it formed the "Four-Party Joint Procurement"—Luoyang Dazhang, Xinyang Xiya, Nanyang Wandelong, and Xuchang Pangdonglai—initiated in 2001 and formally established in 2002, with each contributing 2 million yuan in deposits, aiming to jointly procure to reduce supply costs and compete with foreign supermarkets like Carrefour and Walmart.
At that time, the Four-Party Joint Procurement only shared information and did not engage in true centralized procurement.
During that investigation, I discovered two key clues:
> First, Pangdonglai's self-procurement focused mainly on long-tail categories—products where consumers do not pay attention to brands.
>
> Second, the gross margin from self-procurement was generally about 15% higher than that from distributor-supplied goods.
What was the essence of this stage? It was to obtain higher profits by reducing intermediate links.
According to research data, Pangdonglai's direct procurement could make product prices 50% lower than market prices, because it eliminated intermediate costs such as entry fees, display fees, and promotional fees. High gross margins allowed Pangdonglai to pay employees twice the industry average, which is the source of Pangdonglai's corporate culture.
High salaries lead to high service, high service leads to high customer traffic, and high customer traffic supports high gross margins—this is a positive feedback loop. This should be the first stage of Pangdonglai's private brand. Below is a diagram I drew after my investigation; the logic still holds today.
For a long time afterward, Pangdonglai continued to increase self-procurement categories, but the direction changed: from long-tail categories to high cost-performance categories, focusing on consumers' price sensitivity. This is the origin of the private brand's "relentless pursuit of cost-effectiveness."
After establishing its self-procurement system, 80% of products in Pangdonglai stores became self-procured. When procurement volume was large enough, product prices could even drop by 30% to 50% year-on-year. This should be the second stage.
Now, Pangdonglai has entered the third stage of private brands. This stage has five characteristics:
First, Yu Donglai's personal IP has become hugely popular. From 2024 to 2025, Yu Donglai's Douyin account gained followers rapidly; a 37-minute live stream brought 3.7 million views and 126,000 new followers. Yu Donglai and Pangdonglai have formed two interdependent super IPs; every word and action is marketing, yet without any trace of marketing.
Second, private brand hero products have become hits. Pangdonglai's "Big Mooncake"—DL Taro and Sesame Crispy Cake—sells for 29.8 yuan each, with daily sales reaching 1 million yuan. DL Craft Beer saw a procurement frenzy upon launch, selling out several times; netizens estimate annual sales could exceed 500 million yuan. The newly launched DL Natural Mineral Water quickly entered the top 5 of private brand sales rankings. These are not "no-name brands" but genuine "explosive products."
Third, it has entered high-attention brand categories. Previously, private brands only played in categories where consumers did not care much about brands; now Pangdonglai can do private brands in categories like beverages, beer, and baijiu, where brands are highly valued, indicating that Pangdonglai's brand influence is now higher than most first-tier brands.
Fourth, the quality is clearly superior to first-tier brands' mass-market products. Pangdonglai's newly launched black bean soy sauce has an ingredient list of only four items: water, non-GMO black beans, edible salt, and wheat, priced at 8.7 yuan per 480ml bottle. It sold out instantly upon launch, forcing the supermarket to impose purchase limits. Supermarket products aim for volume and usually focus on mass-market products, but first-tier brands are in a dilemma: they cannot increase volume if they upgrade, and if they do not upgrade, their products become mediocre. Pangdonglai has won the favor of the middle class because it has completed product upgrades. Some say it more bluntly: Pangdonglai leads product upgrades, which is a shame for brand owners.
Fifth, scenario-based displays. Scenario-based displays have only emerged in recent years and were developed by Yasi in Yichang, the first to successfully learn from Pangdonglai, and are now widespread in supermarkets.
Pangdonglai's private brand history actually shares similarities with the history of private brands in Europe.
The evolution of European private brands is divided into five stages:
  * Stage 1: White labels. In the 1970s, quality and price were both low, only basic functional products.
  * Stage 2: Imitation stage. In the 1990s, cheap imitations of well-known brands, medium quality, non-perishable items in ambient food and cleaning categories.
  * Stage 3: 2000s, umbrella brands. Good quality, expanding into as many categories as possible.
  * Stage 4: Through customer segmentation, offering good, better, and best tiers to consumers.
  * Stage 5: Hybrid private brand architecture. Since 2017, layered retail brand architecture combined with venture brands.
Sing Different Songs on Different Mountains
What is a private brand? Precisely, it is a brand overlay—commercial brand covering manufacturer brands.
Brands are convenient, safe choices for consumers. Traditional supermarkets arrange shelves by category, and consumers compare and choose. But the brand theory assumption of "buying in order of preferred brand" does not fully hold in supermarket scenarios, because shelves place similar categories together, inevitably triggering comparison.
Consumers' purchase decisions in supermarkets are influenced by two key factors: first, the trust endorsement of the supermarket itself; second, the arrangement of product comparisons on the shelves.
If a supermarket itself has no brand influence, how can it have the ability to cover brands? When Walmart rose, founder Walton left many legendary stories and long topped the world's richest list. Pangdonglai is the same—it took fifteen years to build its brand credibility step by step from a regional retailer.
The key is: in the first and second stages, Pangdonglai did not need brand endorsement. For long-tail categories or high cost-performance categories, consumers do not care much about brands; you just need to create a comparative advantage on the shelf.
The first supermarkets to accept Pangdonglai's renovation successfully borrowed Pangdonglai's products, which is a transfer of brand trust. Those that followed later were not so lucky—without Pangdonglai's brand endorsement, how can they build their own brand credibility?
So, when I talk about Pangdonglai's private brand history, I want to tell everyone: do not only see Pangdonglai's present. Pangdonglai's present is the university stage, but you need to see its primary and secondary school stages. More importantly, understand which stage you are in and sing different songs on different mountains.
Private Brands Are Also Brands
Every company's rise has historical opportunities; the cost of chasing after missing them is enormous.
1. Pangdonglai's private brand seized the first opportunity: upgrading mass-market products.
Many people talk about "relentless cost-effectiveness" when discussing private brands, but cost-effectiveness is an evaluation after purchase, not a basis before purchase.
Sam's Club and Aldi products are certainly high cost-effectiveness, but first they are upgraded good products, with quality higher than current first-tier mass-market products. Without this understanding, you will fall into the "technical trap" of private brands.
From Pangdonglai's renovation of Bubugao and Yonghui, where over 80% of original products were removed, it is clear that those products did not meet Pangdonglai's quality standards.
2. The second opportunity is the IP explosion.
Private brands are also brands; brands have their own operational rules. Without brand operations, they are simply no-name brands. Walmart does not advertise, but folklore about it is never lacking. Yu Donglai is particularly good at communication and is now a super IP; every word and action carries traffic.
3. The third opportunity is the unique "bustling atmosphere" of Henan supermarkets.
Currently, Henan and Shanghai are the two regions in China where private brands are doing well.
Shanghai has many multinational retailers and natural advantages in products; while Henan's supermarkets have a unique appeal—bustling atmosphere.
What is bustling atmosphere? It is life scenes. Bakery areas, buffet areas, fresh food areas, and consumption upgrade areas around three meals a day—these places always have the highest foot traffic. During the 2025 National Day and Mid-Autumn Festival holiday, Pangdonglai sold 820 million yuan in 8 days, and annual revenue has already exceeded the total of the previous year.
At the same time, new Henan supermarket forces like Xianfeng Life, Huayu Baijia, and Tao Xiaopang are also developing rapidly. Their common point is emphasizing quality and service, and vigorously launching private brand products.
In the end, Pangdonglai's success has never been achieved overnight. From the Four-Party Joint Procurement in 2001, to the self-procurement upgrade around 2010, to today's hero product explosion and IP endorsement—this is a path that has been walked for over 20 years.
For those companies learning from Pangdonglai, instead of anxiously chasing its present, it is better to calmly examine which stage you are in. The true essence of private brands is not to copy a few hero products, but to find your own closed loop.
June 4-5, 2026, Hangzhou | We will hold a China Private Brand Industry Chain Conference—head retail decision-makers from Dingdong Maicai, Metro, FamilyMart, Tmall Supermarket, etc., will personally explain the complete logic behind private brands, not just hero products, but also how the supporting system before hero products is built. In the supply-demand matchmaking session, retailers, factories, and brand owners will discuss cooperation on-site.
This is an industry flagship conference spanning the entire private brand industry chain—regional supermarkets, community supermarkets, instant retail, discount supermarkets, first-tier brand owners, OEM manufacturing factories, supply chain service providers, with 1500+ industry elites gathering in one place. Let the upstream hear the real needs of the terminal, and let the downstream see the real capabilities of the supply chain.


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## Citation metadata

- Publisher: New Distribution
- Author: 刘春雄
- Published: 2026-04-23
- Canonical: https://xinjignxiao.com/en/articles/from-self-procurement-to-private-brand-pangdonglai-s-path-is-hard-to-rep-a7d24f16/
- Original source: https://mp.weixin.qq.com/s/PT3mKvdKOqe_cT-b8TEQQw

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Contact: zhaobo258@gmail.com · +86 158 5481 7671