①After the store was converted, customer traffic increased sharply and there were many self-operated products from Pandonglai in the store; ②Pandonglai and Yonghui's supply chains will gradually begin to cooperate, but they will not fully integrate; ③It is hopeful that single stores will be profitable, but whether or not it will be replicated nationwide is still unknown.
On June 19th, Caixin learned that after 19 days of closed-door adjustments, Yonghui Superstores (601933.SH) resumed normal business at Zhengzhou Xinwan Square store at 9:30 am this morning. Caixin reporters on the scene saw that customer flow surged and the store began to restrict shoppers after 11 am.
Customers lining up at 9:30 am when the store opened.
At the opening of the renovated store, Yu Donglai, the founder of Pangdonglai, appeared on the scene and told Caixin reporters, "We won't have high expectations for the renovated store. We'll live well first and then gradually optimize it." In addition, he mentioned that cooperation with Yonghui and the domestic supermarket industry will continue.
Yu Donglai being interviewed by Caixin and other media outlets.
During a store visit, Caixin reporters found that the store has an overall "U"-shaped structure, with various Pangdonglai branded products everywhere, including Pangdonglai fruit juice, Free Love Baijiu, oats futures, gift boxes, grains and other commodities. In addition, Pangdonglai's popular products, craft beer and mooncakes, require separate queues for purchase and have purchase limits. Staff on site said that some customers had already arrived to line up before 6 am.
Yonghui Superstores stated that following the adjustments to the product structure of the store, over 90% of Pangdonglai products are now available, with delisted products accounting for 81.3% and new single products accounting for 80%.
Today, Yonghui's stock price rose 8.16% after the noon opening and closed up 2.48%. Since being linked to Pangdonglai, the market and investors have been closely watching Yonghui. Can the first renovated store become a bargaining chip for Yonghui to make a comeback in a difficult situation? What kind of growth secrets does Yonghui hope to find in the numerous supermarkets transformed by Pangdonglai?
Supply chain cooperation and copying of Pangdonglai.
In supermarkets transformed by Pangdonglai, there are usually a large number of Pangdonglai's own brands, i.e., the " DL " brand products. These own brands have brought a lot of traffic and sales to supermarkets, and Yonghui is no exception.
Customer flow heading towards the checkout.
Regarding supply chain cooperation, Yu Donglai said that the supply chain cooperation with Best Buy and Yonghui will gradually begin. Pangdonglai will provide its own supply chain, and even pay for research and development costs.
A Pangdonglai supplier told Caixin reporters that Pangdonglai has already achieved independent production in categories such as fresh vegetables, noodles, frozen products, snacks, and alcohol. "Best Buy and Yonghui have their own supply chain systems, so complete integration is unrealistic. Pangdonglai will publicly share its channels and external suppliers, and you can use them if you think they are good. We won't force anyone."
On site, a Best Buy employee also told Caixin reporters,"Pangdonglai's procurement team takes our procurement to local markets, recommends reliable suppliers, and teaches us hands-on."
While accepting the "Pangdonglai-ization" of the store, Yonghui's own characteristics are also fading away. Jiang Han, senior researcher at Pangu Think Tank, told Caixin that although Yonghui's specialty is fresh produce, high costs and pressure have lowered its profit margin. This transformation can provide greater returns for Yonghui. For Pangdonglai, participating in Yonghui's transformation plan is an opportunity to share experience and validate whether it can cross regional barriers and replicate its success in nationwide supermarket chains.
On the other hand, Jiang Han mentioned that there are significant differences between Pangdonglai and Yonghui in terms of corporate culture, management style, market positioning, and business philosophy. How to integrate innovation with Yonghui's existing system, effectively communicate and cooperate, will be a huge challenge.
Yonghui's plan.
Opinions on why Yonghui chose to team up with Pangdonglai vary. Pressure on the performance is significant. Reports show that Yonghui Superstores had a net loss of 1.329 billion yuan in 2023, on top of losses of 3.944 billion yuan and 2.763 billion yuan in 2021 and 2022 respectively. Accumulated losses amounted to more than 8 billion yuan over three years. Bai Lian Consulting founder Zhuang Shuai told Caixin reporters, "After reaching a scale of one thousand stores, Yonghui is facing both external competition and internal management pressure, and has been seeking change for development and profitability. Pangdonglai, on the other hand, has achieved good competitive advantages and profitability through high salaries and investment in product research with only two stores in Xuchang and Xinxiang. By participating in the transformation of helped enterprises, it can achieve growth, and together with the marketing effect, it can also gain media attention on the capital market as a listed company like Yonghui."
Performance pressure on Yonghui is significant.
Can Yonghui find growth secrets in the transformed supermarket?
After the news of the transformation broke out, it had a significant impact on the capital market and investors. After the closing ceremony on May 30th, Yonghui Superstores hit the limit-up board at 1:20 pm on May 31st, closing up 9.58%, and touched the limit-up board again on June 3rd, closing up 9.89%.
On the evening of June 3, Yonghui Supermarket issued an announcement on the abnormal fluctuation of stock trading, stating that the Pantos Logistics adjustment only involved some stores in Zhengzhou, and has no significant impact on the company's revenue and profit growth. On the next day (June 4), Yonghui's stock price fell by 5.88%.
Regarding Yonghui's first transformation, Zhuang Shuai believes that in addition to good sales performance in some stores, there is not much reference value for others. After all, Pantos Logistics is really not as good as Yonghui in new technology application, e-commerce platform construction, real-time retail mode, community group buying, and multi-format innovation.
In the industry's view, Yonghui is conveying a positive and progressive attitude to investors and the outside world, and this is also an opportunity to adjust personnel. From the current news, in addition to employee salaries, the executive team of the assisted supermarket has learned Pantos Logistics's management mode and deeply participated in the assistance plan.
Become a unique or model.
Better Life Commercial Chain Share (Step By Step High) (002251.SZ), the earliest retail company to accept Pantos Logistics's transformation, has achieved initial results. Step By Step High Group introduced that the adjustment has been formed for more than a month, and the average daily sales of Meixihu Store in Changsha Step By Step High has basically stabilized at more than 1.3 million yuan; before the adjustment, the store's average daily sales were 150,000 yuan.
Caixin reporters learned that Wang Tian, the chairman of Better Life Commercial Chain Share (Step By Step High), has expressed his gratitude to Pantos Logistics many times in his circle of friends. At present, Step By Step High has transformed 3 stores, and the remaining stores will also undergo comprehensive transformation based on the sample stores.
Recently, the domestic supermarket industry has also set off a trend of learning from Pantos Logistics. After Better Life Commercial Chain Share (Step By Step High) and Yonghui Supermarket, Zhongbai Holdings Group (000759.SZ) invited Pantos Logistics to conduct on-site research.
A person in charge of a national retail distribution company told Caixin reporters that he has required all company executives to conduct on-site research at a supermarket assisted by Pantos Logistics, and will also convene a special meeting of executives to discuss their feelings from the research.
The person in charge affirmed Pantos Logistics's original intention of jointly making the industry better with its peers, as well as the company's practices in customer service, supermarket product selection and scene arrangement, and concern for employees. However, when talking about how much effect the transformation can have on Yonghui and Step By Step High, he said, "We still need to continue to observe."
"Pantos Logistics's insight and grasp of consumer demand, as well as the fine optimization of the supply chain management, has important reference significance for Yonghui, which is seeking transformation," Jiang Han said. "The key point for Yonghui to choose this transformation is whether it will choose to replicate it after this success, and whether it will replicate it regionally or nationally. No one knows the answer at present."
"Community group buying" should be translated as "community group buying", "stocks" should be translated as "stocks"."