On September 23, Miniso and Yonghui Superstores successively issued announcements that Miniso plans to invest 6.27 billion yuan to acquire 29.4% of Yonghui's equity, with the acquisition price equivalent to 2.35 yuan per share. Many media outlets joked, "'10-yuan store' bottom-fishing Yonghui," "Miniso snake swallowing elephant," etc., but is that really the case? In Yonghui's first-half financial report this year, revenue was 37.779 billion yuan and net profit was 211 million yuan, while Miniso's first-half revenue was 7.76 billion yuan, but net profit was as high as 1.24 billion yuan. Although Miniso's revenue is one-fifth of Yonghui's, its net profit is nearly six times that of Yonghui, which fully demonstrates Miniso's strong profitability.**** And Yonghui, which "can't make money," has had a turbulent development over the past two decades. ****Ten Years to Listing **Securing the Top Position in China In the 1990s, amid the nationwide wave of entrepreneurship, Yonghui founders Zhang Xuansong and Zhang Xuanning dropped out of school and started a beer distribution business, embarking on their entrepreneurial journey. At that time, they lacked substantial capital, so they had to find a different path—they promoted the slogan "delivery to your door" . With this unique model, the Zhang brothers gradually established a foothold in Fuzhou's beer market, but their ambitions went far beyond that. Through visits to over a dozen daily goods supermarkets, they saw the development prospects of Chinese supermarkets. With this idea, they decided to enter the retail industry. In 1995, they opened their first supermarket in Gulou District, Fuzhou—Gule Weili Supermarket, covering 100 square meters, mainly operating daily necessities, and named "Weili" (small profit) to emphasize high quality and low prices. This was the predecessor of today's Yonghui Superstores. In 2000, under the trend of "agriculture-to-supermarket" (converting farmers' markets into supermarkets), the Zhang brothers established the first "agriculture-to-supermarket" supermarket—Fuzhou Yonghui Pingxi Fresh Supermarket, starting their exploration of the fresh food supermarket business model. At that time, Xinhua Du Shopping Plaza made its debut in Fujian, and Fortune 500 companies Walmart and Metro entered Fuzhou one after another. The hypermarket format flourished in Fuzhou, inevitably impacting local enterprises. Facing attacks from all sides, Zhang Xuansong said: "Only by changing and doing what the giants cannot do can we survive!" And Chinese people's pursuit of fresh ingredients is ingrained in their bones. But for foreign companies like Walmart, fresh produce is a "high-loss product," prone to spoilage and difficult to store, and foreigners don't prioritize freshness, so most products are frozen. Therefore, under the direct procurement and self-operated model, Yonghui established a product structure with fresh produce as the main focus, supplemented by general merchandise and clothing, creating differentiated competition against the aggressive foreign enterprises. In 2004, Yonghui began to expand beyond Fujian, opening its first Yonghui Superstore in Chongqing, taking the first step in its national strategy. With its distinctive direct procurement business philosophy and efficient supply chain system, Yonghui went public on the Shanghai Stock Exchange in 2010, leveraging capital to secure a leading position in the domestic supermarket industry. At that time, Yonghui had 156 stores nationwide. Subsequently, in 2015, Yonghui gained the favor of giant JD.com, which invested 4.3 billion yuan in Yonghui, reaching a strategic cooperation in the fresh O2O sector. With capital support, Yonghui's development began to accelerate, but the good times did not last long. In 2017, Yonghui's annual revenue reached 58.59 billion yuan, and net profit attributable to shareholders hit a record high. At the same time, the emergence of new retail formats that year became a watershed in Yonghui's development history. Yonghui's Pain, New Retail's Sorrow In 2016, Jack Ma first proposed the concept of "new retail" at the Yunqi Conference, and at the end of that year, Yonghui established "Yonghui Yun Chuang." Yonghui Superstores was almost one of the earliest large supermarkets to develop new retail. In January of the following year, Yonghui's first "Super Species" opened in Fuzhou, benchmarking against the aggressive Hema Fresh. Super Species was a retail format integrating "high-end supermarket + fresh food dining + O2O," targeting the mid-to-high-end market, with careful site selection. In the most upscale business districts, it set up processing stalls where Boston lobsters and king crabs could be slaughtered and eaten on the spot. The first Super Species store opened very hastily, and its positioning was unclear. According to reports, the preparation time for Super Species' opening was less than two months, and after the first store was established, its department within Yonghui was still undefined. Despite this, in the 2017 annual report, Yonghui still planned to add 100 new Super Species stores in 2018. But at its peak, Super Species had at most 80 stores, and its growth momentum stopped there. After 2019, Super Species began to gradually close stores, and now it has almost disappeared. In 2018, Yonghui's market value exceeded 100 billion yuan, becoming the first supermarket in China to do so. With such good momentum, Yonghui began to try community fresh food stores "Yonghui mini," planning 1,000 stores in a year, but the final outcome was the same as Super Species. In these two or three years, Super Species and Yonghui mini together caused Yonghui to lose 1.3 billion yuan. By 2020, Yonghui's revenue reached its historical peak—93.199 billion yuan. From 2000 to 2020, over two decades, Yonghui experienced the entrepreneurial development period, listing expansion period, transformation, and super expansion period. Although development was not smooth during the transformation and super expansion periods, the market gave sufficient patience as it was still in the early strategic stage. At the end of 2020, the physical retail industry continued to be impacted by the pandemic. From 2021 to 2023, Yonghui's operating revenue was 91.06 billion yuan, 90.09 billion yuan, and 78.64 billion yuan, respectively, with year-on-year declines of 2.29%, 1.07%, and 12.71%. Net profit attributable to shareholders was -3.944 billion yuan, -2.763 billion yuan, and -1.329 billion yuan, respectively, with cumulative losses over three years reaching as high as 8 billion yuan. Since its inception, Yonghui has continuously explored new business formats, essentially trying to find a path to "self-rescue" under various external environmental pressures. In these three years, it also tried models such as "authentic discount stores" and "Yonghui warehouse stores." After repeated attempts failed, Yonghui Chairman Zhang Xuansong realized: Seeking external help might be the best solution to Yonghui's current predicament. Donglai's Radical Reform Yonghui's "Burn the Boats" Path "Pang Donglai's adjustment of traditional supermarkets" is undoubtedly the most talked-about topic in the retail circle this year. Among the many adjustment cases, the leader Yonghui is undoubtedly the most effective and famous. On May 5, Yonghui Superstores Chairman Zhang Xuansong, CEO Li Songfeng, and a team of over ten senior executives visited Xuchang to call on Pang Donglai Chairman Yu Donglai. At a closed-door meeting after the visit, Yu Donglai decided to help adjust Yonghui Superstores. Pang Donglai's adjustment brought a new path to Yonghui, which was on the edge of a cliff. Take the first adjusted store—Yonghui Superstore Zhengzhou Xinwan Plaza store—as an example. In terms of product structure, Yonghui reorganized it, removing 10,841 SKUs, accounting for 81.3% of the original products, and adding 12,581 new products, achieving a new product ratio of 80%. The reorganized product structure reached over 90% of Pang Donglai's product structure. At the same time, it introduced Pang Donglai's private brands to provide local consumers with a richer selection. In terms of store environment, the layout was redesigned, eliminating forced traffic flow and widening store aisles. In terms of mechanisms and culture, Yonghui learned and applied Pang Donglai's excellent experience, further implementing it in systems and processes, and increasing humanistic care for frontline employees. On the opening day of this store, daily sales reached 1.88 million yuan, approximately 13.9 times the average daily sales before the adjustment; daily customer traffic exceeded 12,000 people, approximately 5.3 times the average daily traffic before the adjustment, showing remarkable results. At this year's Yonghui Superstores semi-annual work seminar, the learning situation from Pang Donglai's assistance was shared, and the first batch of stores to learn from Pang Donglai for self-adjustment was determined, involving 10 cities nationwide. At the investor meeting for Miniso's acquisition of Yonghui, Ye Guofu stated that in his perception, Pang Donglai is the only way out for Chinese supermarkets. He hopes to bring Pang Donglai's model out of Xuchang and lead China's retail industry into a new world. In Ye Guofu's view, the Pang Donglai model combined with Yonghui Superstores' national coverage will surely bring new growth to Yonghui in the future. At the same time, the present is definitely the best time to bottom-fish. Although Yonghui has performed poorly for several consecutive years, with revenue and net profit continuously declining and store closures almost never stopping in the past two years, after adjustment, the situation has slightly improved. The supply chain is being continuously integrated, and the direct sourcing model is also being promoted. Miniso's advantage lies in its private brands, while Yonghui's advantage is its supply chain cultivated for over 20 years. The combination of the two may play a synergistic role in the future. Final Thoughts Looking back at Yonghui's development history, over two decades, Yonghui has continuously reformed, transformed, and deepened its supply chain. In the early stage, it was "agriculture-to-supermarket"; in the middle stage, it expanded and listed, explored new retail paths, laid out discount stores and warehouse membership stores; and now it is "Donglai-ization." Yonghui's pace of running has almost never stopped. Whether Yonghui's drastic reform this time will shake the inherent traditional supermarket model, we do not know; and whether Miniso's acquisition is discerning or futile, only time will tell. But today, China's retail industry is opening a new chapter. Regardless of the business format or model, surviving in this "war" may be the only truth.