---
title: "The Iteration of Fujian's Retail Glory"
description: "Over the past two decades, Fujian's retail industry has given rise to two flagships, Xinhua Capital and Yonghui Superstores, both founded by self-made entrepreneurs. As various retail formats emerge, from shopping malls to fresh food supermarkets, convenience stores, instant retail, and discount stores, the industry faces both challenges and transformations."
author: "徐霁"
publisher: "New Distribution"
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published: "2024-10-10"
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# The Iteration of Fujian's Retail Glory

> Over the past two decades, Fujian's retail industry has given rise to two flagships, Xinhua Capital and Yonghui Superstores, both founded by self-made entrepreneurs. As various retail formats emerge, from shopping malls to fresh food supermarkets, convenience stores, instant retail, and discount stores, the industry faces both challenges and transformations.

Over the past two decades, Fujian's retail industry has given rise to two flagships: Xinhua Capital and Yonghui Superstores. The former pioneered Fujian's first one-stop shopping mall; the latter took a unique approach by focusing on fresh produce. The owners of both companies started from scratch. Chen Fashu initially made a living selling timber, while Zhang Xuansong and Zhang Xuanning spent years as beer distributors. Zhang Li, chairman of Jianfu Convenience Stores, Fujian's largest convenience store chain, earned his first pot of gold not from selling beer but from his original shares in Xuejin Beer. After entering the retail industry, everyone realized that this job was not easy. Zhang Li even regretted it a bit: "Who would have thought it would be this tough?" Each has their own hardships. Xinhua Capital, caught between internal and external pressures, had to divest its retail business; Yonghui Superstores accumulated losses exceeding 8 billion yuan over three years; and Pumu Supermarket, an instant retail company that emerged in recent years, has yet to publicly announce breaking even. **Fujian's retail industry now features multiple formats coexisting, from shopping malls to fresh food supermarkets, convenience stores, instant retail, and discount stores.** Xinhua Capital has pivoted from retail to internet marketing; can Yonghui Superstores, with its major shareholder changed, continue to carry the banner of Fujian retail? **Origins in 1995** Chen Fashu, once Fujian's richest man, made his fortune in the timber business, but his first pot of gold came from running a general merchandise store in Xiamen. In the early 1990s, he took over a failing store in Xiamen, hung up the Huadu Department Store sign, and started a wholesale business. In 1995, Huadu Department Store moved to the busiest Dongjiekou area in Fuzhou, and business flourished. Chen Fashu replicated this model in local malls and shopping centers. Later, the Chen brothers went their separate ways, and Chen Fashu established Xinhua Capital Group, becoming a star enterprise in Fujian with a department store plus hypermarket model. The busy year of 1995 for Chen Fashu was a landmark year for the rise of department stores and supermarkets in China. That year, Carrefour, Metro, and Yaohan entered the Chinese market to compete. In the same year, the Zhang brothers, who had been beer distributors in Fuzhou for years, decided to test the emerging supermarket format and opened their first "Gule Weili" supermarket in Fuzhou. In 1998, the brothers renamed the supermarket and opened the first Yonghui Superstore near Fuzhou Railway Station. The name Yonghui, meaning brightness and prosperity, clearly reflected the brothers' aspirations.
Unlike Chen Fashu's department store plus hypermarket model, Yonghui Superstores (601933.SH) took a unique path, focusing on fresh produce and gradually building a business model that uses low-priced fresh produce to attract customers and daily necessities to generate profits. This successfully avoided direct competition with retail giants like Walmart and formed its own moat. Different business models determined the different development paths of Xinhua Capital and Yonghui Superstores—one going left, the other right. **Golden Era** In the following 16 years, China's traditional supermarket industry experienced rapid development. Foreign chain supermarkets entered China one after another, **and the market structure shifted from state-owned dominance to a dual strong presence of state-owned and foreign capital, with private supermarkets generally weak.** Initially, the Zhang brothers cooperated with Fuzhou's local promotion of the "agricultural-to-supermarket" project, seizing the opportunity to rise. From 2005 to 2010, Yonghui Superstores honed its operational capabilities while building a strong fresh produce supply chain system. The company organically combined the advantages of farmers' markets and modern supermarkets, expanded fresh produce sales areas, reduced intermediaries through direct sourcing, and located stores close to residential areas. After forming its core advantages, Yonghui Superstores gradually advanced to the top tier of domestic supermarkets. Xinhua Capital was once the leader in Fujian's retail industry. In the summer of 1995, Huadu Department Store, with a business area of 5,000 square meters, opened its doors at Dongjiekou in Fuzhou, generating over 2 million yuan in revenue on the first day. Chen Fashu seized the momentum and opened three more shopping malls on Wusi Road and other streets in Fuzhou. By 2007, Xinhua Capital had 32 supermarkets, assets of nearly 1.3 billion yuan, and annual profits of over 130 million yuan. The following year, the company went public, becoming the earliest listed retail enterprise in Fujian. On its first day of listing, its stock price soared 160%, setting a miracle in the local retail industry. In 2010, Yonghui Superstores listed on the A-share market and expanded nationwide at a pace of over 60 new stores per year, ushering in its heyday. **Ups and Downs** After 2012, with pressure from foreign and domestic supermarkets and the rise of e-commerce, the crisis for Xinhua Capital (002264.SZ) emerged. In 2013, the company suffered its first loss since listing, with a net loss attributable to shareholders of approximately 236 million yuan. Over the next seven years, the company repeatedly fell into losses and returned to profitability. At that time, Chen Fashu's Xinhua Capital Group had already diversified, and the listed company's retail business was managed by professional managers. Under the impact of competitors and new models, Xinhua Capital appeared somewhat weak. During this period, Xinhua Capital made many efforts. In 2013 and 2014, it cooperated with Alibaba and Tencent's WeChat platform to connect with mobile; in 2017, it also established Fujian Xinhe Network with Alibaba to venture into new retail, but exited a year later. In 2018, Xinhua Capital reached its peak, covering Jiangxi, Jiangsu, Shanghai, and Fujian with 143 stores, but the decline was hard to hide. In November 2021, the company publicly solicited buyers to sell all assets and liabilities of its retail business. At that time, 10 of the 11 wholly-owned subsidiaries involved were loss-making, with only Quanzhou Xinhua Capital Shopping Plaza still profitable. **The former glory of Fujian retail had become a chicken rib.** Ultimately, the parent company Xinhua Capital Group stepped in to take over, and Xinhua Capital transformed into internet marketing.
Relying on the fresh produce moat honed in its early years, Yonghui Superstores advanced rapidly and won favor from capital. In 2014, Dairy Farm International invested in Yonghui Superstores, becoming the single largest shareholder; in 2016, JD.com participated in a private placement. Leveraging capital advantages, Yonghui Superstores frequently made moves upstream and downstream, spawning the "Yonghui system" within just a few years. In 2020, the company's revenue exceeded 90 billion yuan, but the seeds of a turning point were also sown. Since 2021, the company's revenue has been declining, and last year it only achieved 78.64 billion yuan. Over three years, the company's net losses attributable to shareholders totaled 8.036 billion yuan. This year, the company's operations have not improved, forcing it to close stores to stop losses. In the first eight months, a total of 136 stores were closed. In crisis, Yonghui Superstores sought a prescription from the "miracle doctor" of supermarkets, Pangdonglai, for adjustments. However, in the past two years, **Yonghui Superstores has remained a regular on the China Supermarket TOP 100 list**, second only to Walmart, which ranks first. **New Formats Emerge** Fujian people love to strive and are adept at seizing business opportunities. In the soil that nurtured Xinhua Capital and Yonghui Superstores, new retail formats continue to emerge. In 2016, Chen Muwang founded Pumu Supermarket, focusing on fresh produce instant delivery. With a model of front warehouses plus online e-commerce and 30-minute delivery, the Pumu Supermarket app has over 170 million registered users. The old players in front warehouses, Dingdong Maicai and Miss Fresh, have already gone public, operating in 37 and 16 cities respectively, suppressing Pumu in scale, and there is also Xiaoxiang Supermarket following closely. Dingdong Maicai and Miss Fresh were able to grow mainly because during the special three-year period, the rise of the fresh produce track and the rigid demand for community group buying gave birth to the rise of these fresh produce e-commerce companies. **Pumu Supermarket's development has not been so smooth**; its online-to-home business took four years to polish even in its home base of Fuzhou. According to public data, in 2020, Pumu Supermarket's daily order volume in the Fuzhou market was 160,000 to 200,000 orders, far surpassing Yonghui's home delivery of 50,000 to 60,000 orders. Only then did Chen Muwang gain confidence to expand beyond Fuzhou. However, Chen Muwang remained quite cautious about expansion. It was not until 2021 that Pumu Supermarket entered cities such as Nanjing, Wuhan, Changsha, Chengdu, Chongqing, and Hefei, and its nationwide expansion has not been widely rolled out.
Beyond Pumu Supermarket, a large number of convenience stores have emerged in Fujian. In the 2023 China Convenience Store Top 100 list, seven Fujian companies made the list: Jianfu, Wanjia, Huining, Yitai, Liuyi, Wenxian, and Xinnanfeng, with a combined store count of 5,818. Among them, Jianfu Convenience Stores ranked 12th, the top among Fujian convenience store brands, with 2,521 stores, an increase of 108 from the previous year. Its stores are mainly distributed in Fujian, Jiangxi, and Sichuan.


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