Recent online discussions have raised questions about the effectiveness of business transformation initiatives guided by Pang Donglai. These concerns emerged following Yonghui Superstores Co.,Ltd.'s 2025 loss forecast announcement, which triggered exaggerated interpretations, alongside some bloggers using attention-grabbing headlines like "Pang Donglai's First Apprentices Have Failed." Such narratives have obscured facts and misled public perception. This analysis aims to clarify that the fundamental principle of these reforms is to establish a healthier commercial ecosystem—where operators work with ease, employees find fulfillment, partnerships thrive, and customers receive genuine value, ultimately contributing to social progress. This approach fundamentally differs from traditional business models that prioritize scale and profits over human value.
As active participants and observers of Pang Donglai's guidance initiatives, we have focused on 12 pilot enterprises directly mentored by Pang Donglai's team, along with two listed companies—Better Life and Yonghui. By examining entrepreneurial awakening, people-centric approaches, operational quality, and strategic restructuring, we systematically evaluate the implementation and outcomes of these reforms to provide factual insights for the industry's healthy transformation.
**Entrepreneurial Awakening: From Burdened Management to Effortless Leadership** The transformation begins with shifts in entrepreneurial mindset. Over recent years, leaders of the 12 pilot enterprises have demonstrated remarkable evolution: they have learned to shed excessive pressures, embracing lighter, more joyful approaches to life and business. Transitioning from authoritarian "boss" figures to mentors who nurture growth, they now prioritize empowering their teams. This people-focused awakening has liberated the entrepreneurs themselves. For instance, Real Smart's chairman Zhao Wei shared how he transformed from a "burdened operator" to an "awakened, happy entrepreneur," now prioritizing work-life balance through vacations, exercise, and hobbies.
Better Life's chairman Wang Tian exhibited similar profound changes. Previously distant, he now engages closely as "Brother Tian" with employees, reducing social obligations to lead cultural workshops and listen to frontline staff and customers. Adopting a relaxed lifestyle, he has shifted from anxiety to calm focus on genuine interpersonal connections. Such leadership changes naturally inspire teams. When leaders embody positive values and emotional ease, employees respond with enhanced belonging and motivation—transcending mere salary incentives to achieve synergy between healthy operations, entrepreneurial well-being, and collective growth.
**People-Centric Approach: From Labor Management to Talent Development** The power of Pang Donglai's model lies in translating "employee care" into actionable systems. Through higher wages, shorter hours, and improved benefits, it ignites staff vitality and creativity. Implemented companies consistently achieve virtuous cycles of rising incomes, lower turnover, stronger cohesion, and sharper professionalism.
1. **Comprehensive Compensation Improvements**: Base wages at all 12 pilot firms have risen for three consecutive years, reaching or exceeding retail industry standards by 2025. For example, Lin Life's average monthly wage grew from ¥3,796 in 2023 to ¥5,229 in 2025. Jia Ba Le not only raised wages but institutionalized profit-sharing—distributing 50% of profits to teams, with ¥1.5 million allocated in 2025 alone. Better Life's reformed stores saw base wages jump 55% to ¥5,099, while management pay doubled. By September 2025, these stores had distributed ¥8.85 million in bonuses. Yonghui's employees in reformed locations earned average monthly incomes of ¥6,007 (rising to ¥6,429 with dividends)—a 56% increase—with eight-month dividends surpassing ¥30 million. Simultaneously, Yonghui's "Artisan Program" certified nearly 5,000 employees, with 53 receiving national vocational credentials and monthly stipends, transforming workers into professionals.
2. **Reduced Hours and Increased Leave**: Prioritizing dignity and work-life balance, pilot firms adopted healthier schedules. For instance, Qinghai Yi Jia Qin offered 30-day paid annual leave. All 12 enterprises closed for Spring Festival 2024-2025, granting employees one to three days off. Better Life implemented graded 10-20 day vacation systems, achieving 106 average annual leave days per employee. Yonghui ensured paid leave for 40,000 staff, covering 59% of workdays. These practices颠覆ed retail's "always-open, high-intensity" stereotype, boosting happiness and reducing fatigue-related service declines.
3. **Declining Turnover**: Improved conditions directly lowered attrition. In 2025, Qingyuan Man Jia Huan's rate fell to 5.78%, nearing top-tier benchmarks. Lin Life (6.94%), Jiu Yue Li (8.24%), Xin Le (8.70%), and Real Smart (8.87%) all maintained sub-10% rates. Better Life's turnover dropped from 35% to 12%, while Yonghui's key positions saw rates fall from 28% to 9%. Stable teams cut operational costs and ensured consistent service quality, elevating customer satisfaction.
**Enhanced Operational Quality: Returning to Essentials for Steady Growth** Reforms shifted focus from blind expansion to深耕ing value and customer experience, reflected in key metrics from pilot firms, Better Life, and Yonghui.
1. **Sustained Same-Store Sales Growth**: All 12 pilot enterprises achieved three consecutive years of positive comparable sales growth—without new openings. Many enhanced per-store efficiency by closing loss-making locations. Run Xing Wan Jia led with 40.24% growth in 2025, while Ru Yuan advanced steadily from 10.34% (2023) to 35.06% (2025). Jia Ba Le maintained 22.20% growth after a high 19.01% base. Green Basket (13.08%), Lin Life (16.84%), and Jiu Yue Li (17.25%) all posted double-digit 2025 gains, demonstrating "no declines, multiple highs" trends. For example, Jia Ba Le shrunk from 22 to 7 stores while maintaining sales volume; Xin Le optimized from 56 to 41 outlets yet kept 4.20% growth. This "close-to-improve" strategy embodied Pang Donglai's value-creation ethos. By 2025, pilot firms boasted over 36 stores exceeding ¥100 million annual sales—triple pre-reform counts—including 7 over ¥200 million, 2 over ¥300 million, and 1 surpassing ¥400 million, proving employee/customer satisfaction aligns with store quality.
2. **Better Life's Healthy Operations**: Post-reform, Better Life's stores achieved leaps in sales, foot traffic, and efficiency. 2025 projections indicated profitability, with substantial narrowing of non-GAAP losses, signaling a turnaround toward value creation. Daily sales per store skyrocketed 671.7% to ¥71,000; daily foot traffic grew 334.9% to 6,688; average transaction value rose 77.5% to ¥107.20; inventory turnover days plunged 65% to 17.8 days, freeing two-thirds of tied-up capital. Product sell-through rates jumped 17 points to 92%, while monthly sales per square meter surged 638.2% to ¥5,864, and labor productivity increased 147.3% to ¥98,900. The 2025 forecast anticipated net profits of ¥100-150 million, with non-GAAP losses cut by 80.67%-87.11%, confirming long-term reform value through enhanced "quality + service" strategies.
3. **Yonghui's Core Metric Stability**: Despite a projected ¥2.14 billion 2025 loss tied to strategic restructuring—not operational weakness—Yonghui's fundamentals improved. The loss stemmed from one-time costs from reforming 315 stores and closing 381. Reformed stores achieved net promoter scores above 40% (19 flagship stores exceeded 50%). On June 15, 2025, six newly reformed stores neared ¥10 million daily GMV with 76,000 visitors. Forty-seven stores reformed for six months averaged monthly sales of ¥3,295/sqm (above the ¥2,800 benchmark), with 60% surpassing five-year profit peaks. Yonghui's core reforms—product strength, service upgrades, employee vitality—require time to mature, with 2025 being a high-investment phase. With restructuring completed by year-end, 2026 promises renewed growth.
**Systematic Strategic Restructuring: Building Quality Retail Ecosystems** Pang Donglai's guidance avoids simple replication, instead fostering deep cultural-to-strategic realignment tailored to each enterprise.
1. **Product Strength Overhaul**: All assisted companies revamped assortments around "people's livelihood needs and quality focus." Pilot firms, Better Life, and Yonghui built scientific systems emphasizing tier-1 brands, high-value daily necessities, and local specialties. Better Life elevated supply chains via direct sourcing and farm partnerships, implementing 275 quality checks across 150,000 km of traceability routes. By simplifying SKUs and capping margins, it ensured fair pricing. Yonghui prioritized quality through direct imports, private-label introductions, and full-chain quality control—e.g., traceable organic vegetables packaged at origin.
2. **Service and Experience Enhancements**: Stores adopted 1.6-meter low shelves, wider aisles, better lighting, and amenities like rest areas, pet zones, and free services (e.g., meat cutting, fish cleaning). Real Smart expanded convenience services from 70 to 483 items, introducing one-hour response guarantees. These upgrades transformed stores into community hubs blending practicality and emotional connection.
3. **Cultural Activation of Organizations**: Structural changes underpinned reforms. Better Life established business units, rotating leadership teams, and democratic hiring/feedback systems. Yonghui's profit-sharing and artisan programs fostered proactive creativity. Pilot firms embraced democratic supervision and rotating management, ensuring employee input on major decisions. This "respected and trusted" environment turned jobs into callings.
The Pang Donglai reform movement's significance extends beyond financial improvements—it offers a systematic, human-centric solution for retail transformation. From 12 pilot firms to giants like Better Life and Yonghui, positive changes confirm that prioritizing employee well-being to serve customers is a viable, sustainable path. While requiring determination and time, these practices promise a healthier, more humane future for Chinese retail.
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