---
title: "Once Defiant Against Walmart, Forced Carrefour to Close Stores, Now Loses 2 Billion! Not Driven Crazy by Money, but Destroyed by Its Own People"
description: "Renrenle Supermarket, once a giant in China's chain supermarket industry, has suffered losses for five consecutive years totaling nearly 2 billion yuan, facing delisting risk again. Its failure is attributed to internal issues such as corruption, high turnover of core staff, and operational inefficiencies, rather than external competition."
author: "Diik"
publisher: "New Distribution"
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published: "2019-04-25"
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# Once Defiant Against Walmart, Forced Carrefour to Close Stores, Now Loses 2 Billion! Not Driven Crazy by Money, but Destroyed by Its Own People

> Renrenle Supermarket, once a giant in China's chain supermarket industry, has suffered losses for five consecutive years totaling nearly 2 billion yuan, facing delisting risk again. Its failure is attributed to internal issues such as corruption, high turnover of core staff, and operational inefficiencies, rather than external competition.

Source: Jin Cuo Dao (ID: ijincuodao)
There is a kind of failure that is not losing to others, but losing to oneself.
A year ago, when the founder of RT-Mart left, he said: "I defeated all my opponents, but lost to the times."
Losing to the times is regrettable, but not terrible. What is truly terrible and sad is losing to oneself, yet being unwilling to "scrape the poison from the bone."
Renrenle Supermarket may not be very famous nationwide, but it is indeed a giant in the domestic chain supermarket industry.
Once, it was as famous as China Resources Vanguard and Xin Yi Jia, being one of the three giants of supermarkets in Guangdong.
What is Guangdong? It is the frontline of reform and opening up!
China Resources Vanguard, with the background of central enterprise China Resources Group, developed smoothly, opening thousands of stores nationwide. Xin Yi Jia once achieved maximum sales of 18 billion yuan and opened 116 stores.
Renrenle was also a local power with revenue exceeding 12.9 billion yuan, and as a listed company, its market value once exceeded 12 billion yuan.
At that time, it was evaluated by a former operations director of Walmart as Walmart's strongest competitor in the Chinese market.
However, in recent years, this once proud and arrogant Chinese supermarket king has suffered losses for five consecutive years, totaling nearly 2 billion yuan, and has been ST (Special Treatment) by the stock exchange. This is the second time it faces delisting risk since being ST in 2016.
(Screenshot)
Time is running out for Renrenle.
Once engaged in close combat with Walmart and Carrefour, leaving opponents helpless, now all pride is gone, and it can only be dragged along by opponents. What exactly did Renrenle do wrong?
**Cunning "Local Snake"!**
**First Defeat Carrefour, Then Defy Walmart**
The founder of Renrenle Supermarket is He Jinming, born in Xi'an in 1952, graduated from Central South University of Forestry and Technology (formerly Hunan Economic Management Cadre Institute, according to Baidu Baike).
In 1996, He Jinming was 44 years old and served as the general manager of Shenzhen Metal Exchange. During a training trip to Europe, he found that supermarkets had great potential, as comprehensive supermarkets were still a blank in China at that time. Carrefour only entered Beijing in 1995, and Walmart entered Shenzhen in 1996.
So after returning to China, he decisively resigned and went into business, opening a 2,600-square-meter supermarket in Nanshan District, Shenzhen. At first, daily sales were over 60,000 yuan, which was better than earning a fixed salary.
But after three months, competitors came, and there were two big battles: one with Carrefour, one with Walmart.
**First Battle: Against Carrefour.**
Carrefour entered Nanshan District, Shenzhen, three months after Renrenle's first store opened. At that time, Carrefour was still the world's second-largest supermarket giant, opening a store only 2.5 kilometers away from Renrenle.
Carrefour's store opening strategy at that time was to not allow competitors within a 3-kilometer radius. If there were, they would be eliminated.
Carrefour opened with various promotions, and on the first day, Renrenle's daily sales dropped from over 60,000 to over 40,000, and within less than a week, it fell to less than 20,000. He Jinming, burdened with over 1 million yuan in loans, could only move forward, not backward.
He couldn't compete with promotions, but He Jinming was very eager to learn. Every day when Carrefour opened, he would go in and stay until closing. He carefully observed and learned in the Carrefour store, observing the display of goods, what products were stocked, how they sold vegetables and fresh food, how they promoted, and even secretly looked at Carrefour's cold storage.
After observing for 37 days, he filled hundreds of pages of notes.
The real contest began. He Jinming used the experience and promotion models learned from Carrefour to fight Carrefour, while Carrefour also sent people to spy on Renrenle, starting a promotion war.
Renrenle's winning trick was "speed." If Carrefour did one promotion a day, He Jinming would do two or three. If Carrefour sent people to scout, He Jinming would stay put, and as soon as they left, he would immediately change plans. At that time, Carrefour's person in charge personally led a team to inspect Renrenle every day, visiting the store up to three times a day.
After fighting like this for a year and a half, Renrenle's turnover increased from 20,000 to over 600,000, while Carrefour's halved.
Later, when Renrenle entered the Xi'an market, it even forced Carrefour to close a store for the first time since entering China.
**Second Battle: Against Walmart.**
In June 1999, Walmart announced it would open a 23,000-square-meter store less than 200 meters from Renrenle, claiming it would be the largest modern store in Asia at that time.
At that time, Walmart had 5 stores in Shenzhen, while Renrenle had only 1, with just 6,800 square meters.
To build momentum, He Jinming quickly opened the first branch in Futian, Shenzhen, and another in Huizhou, Guangdong.
But Walmart was more ruthless than Carrefour, directly putting up a sign next to Renrenle: "Walmart 100 meters ahead."
That night, He Jinming led people to tear down the sign and throw it into the sea.
In the first week of Walmart's opening, Renrenle imitated Carrefour by holding a week-long shopping festival with different themes each day, giving Walmart a warning.
Later, when Renrenle planned to expand, He Jinming held a ten-day promotion with across-the-board price cuts. Walmart responded and also started promotions. On the last day, Renrenle, which had sold most of its goods, suddenly closed for renovation.
Walmart was caught off guard and lost several million yuan in this battle.
Unexpectedly, He Jinming compressed the nearly four-month construction period into one month, strictly keeping the opening time secret. Finally, overnight, it opened suddenly with heavy advertising and promotions.
Again, Walmart was caught off guard. At that time, Walmart's operations director said:
"In China, only Renrenle can compete face-to-face with Walmart and continue to develop."
Afterwards, Renrenle's expansion model was to first establish a strong point in a region, then quickly open stores to form regional advantages, which was likened to "honeycomb expansion."
Renrenle was also the first domestic company to directly compete with Walmart and Carrefour, the two world supermarket giants, leading to it being considered the most likely to become a national "supermarket boss," and was called the "retail sniper."
**Handsome for Only Three Seconds!**
**Listing Became the End of Glory**
From 2002 to 2008, Renrenle's total sales scale grew about 30% annually. From 2007 to 2009, its operating revenue increased from 3.98 billion yuan to 8.77 billion yuan, with net profits averaging around 240 million yuan.
In 2010, Renrenle listed on the Shenzhen Stock Exchange, with revenue exceeding 10 billion yuan that year and over 100 stores nationwide.
By 2012, its operating revenue reached 12.9 billion yuan, but it lost 89.61 million yuan. In 2014 and 2015, it lost 461 million yuan and 475 million yuan respectively, leading to ST treatment by the exchange in 2016.
To remove the ST label, Renrenle had to sell property assets to barely show a profit of tens of millions of yuan.
As a result, in 2017, Renrenle suffered a huge loss of 538 million yuan, and in 2018, it lost 355 million yuan.
Yonghui, which also listed in 2010, had a turnover 300 million yuan less than Renrenle at that time. Now Yonghui's market value is nearly 90 billion yuan (exceeding 100 billion in 2017), while Renrenle is less than 3 billion, with total store closures exceeding 100, and even the first store where He Jinming started closed in July 2017.
Alas!
**A Once Arrogant Private Enterprise Giant,**
**A Typical Example of Pride Goes Before a Fall!**
Renrenle's impression to the outside world is a private enterprise that is hardworking, daring to fight, good at learning foreign business models, and low-key, but its biggest problem lies internally.
A person claiming to be an employee once posted:
"Renrenle is like a strong man, 1.9 meters tall, weighing 280 jin. However, he has severe indigestion, liver problems, high blood pressure, diabetes, and myocardial infarction..." (Source: Tencent Finance)
For example, procurement corruption: procurement staff demanded money from suppliers, and purchase prices were higher than competitors' retail prices, yet stores were required to increase customer traffic and sales and gross profit... Although anti-corruption was once a focus, it has become an incurable problem.
A single dominant shareholder: before listing, He Jinming and his wife Song Qi and son He Hao held 100% of shares. After listing, except for 25% public shares, the remaining 75% was still held by He Jinming's family.
Less than a year after listing, a large number of middle and senior employees left Renrenle: in 2011, Renrenle's director, vice president, and CEO Li Yanfeng resigned, and Wang Niuzai, executive general manager of the business unit procurement center, resigned; in 2012, Li Kuansen, vice president of the business unit, resigned. These three were all veterans of Renrenle. In addition, 11 people including the financial director, audit director, human resources director, and supervision center director of the listed company resigned; at the district level, 6 people including the recruitment manager of South China, human resources director of Southwest, and recruitment manager of Northwest resigned, and the list of store manager resignations reached 16. (Source: Zhihu "Star Enterprise Renrenle from Peak to Decline")
It is rumored that the equity incentives promised before listing were not fulfilled, and the departure of these core employees was undoubtedly Renrenle's biggest loss.
Problems in operation and management also erupted massively.
Before listing, Renrenle had been exposed multiple times for selling spoiled and problematic food, beverages, and alcohol. After listing, complaints became commonplace.
For example, in 2011, it was repeatedly exposed for selling expired food, with juice expired for over 20 days still on sale; in August 2016, pig trotters sold at Xi'an Renrenle were found to contain clenbuterol; in May 2018, Chongqing Renrenle was investigated for selling counterfeit cooking oil; and it sold yogurt expired for a week through JD Daojia... The brand image fell again and again.
Behind these problems is Renrenle's low operational efficiency, with an average operating expense ratio of 23.53%, while Yonghui's is only 17.06%.
The product shrinkage rate for Renrenle is as high as 1.53%, while Yonghui's is only 0.26%. In 2014 and 2015 alone, Renrenle's product shrinkage reached 197 million yuan and 244 million yuan.
Renrenle also tried to transform. In 2015, it created three new business formats: Le Super, community supermarket Le Life, and fresh food supermarket Le Fresh. It also tried e-commerce and developed a mobile app, but compared to competitors at the same time, it was 2-3 years late, with little effect, and added extra burden to the original losses.
In recent years, the domestic retail market has undergone a major reshuffle. Giants have begun to seek partners: Carrefour and Yonghui cooperated with Tencent, Alibaba acquired Lianhua and RT-Mart, Walmart cooperated with JD.com, and new forces joined, such as Suning Xiaodian.
E-commerce impact and rising costs are faced by the entire industry, not just a single company. Only by finding reasons and solutions from within can one move forward.
Renrenle's early tactics were effective, but it only learned how to fight opponents. The original favorable timing and location are gone. In the new market competition, if it does not actively seek innovation and thinking, it will face not only old opponents but also more new ones.
Opening new stores, making profits, avoiding problems—Renrenle faces enormous pressure in 2019. However, it seems that time is really running out for Renrenle.
A building is not built in a day, and ice is not formed in a day!
The reason true giants are called giants is that they are not burdened by immediate success and interests, and they continuously discover and correct problems in the process of progress, adjusting in time, rather than comparing seniority with opponents.
Renrenle, a once arrogant giant, the result of pride is that it can no longer be an opponent to its former rivals, and even without opponents acting, it is rapidly heading toward extinction.
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