Recently, the story of Pangdonglai, a local Chinese supermarket chain captivating consumers across the country, has garnered widespread attention. It operates only 13 stores, all in central China's Henan Province. Starting this year, Pangdonglai has helped refurbish larger supermarket chains like the Yonghui Supermarket, which operates over 900 stores nationwide. The refurbishment has significantly increased the sales of those stores. This report explores how Pangdonglai's business model meets the evolving demands of Chinese consumers. Zhou Yixin has more.
Pangdonglai, a supermarket chain from a fourth-tier city, has only 13 stores yet guides larger chains operated by listed companies. Online discussions praise its excellent customer service and employee benefits – such as the 10-day "unhappy leave" for employees' emotional wellness.
Intrigued by its nationwide attention, I visited the newly renovated Yonghui Supermarket in Zhengzhou. At 9 AM on a workday, the store hadn't opened yet, but a long queue had already formed.
Official data shows that, as of July 15, about a month after reopening, the store's average daily sales reached around $250,000, about 12 times more than before.
ZHOU YIXIN Zhengzhou "Pangdonglai's renovation has significantly impacted this Yonghui Supermarket in Zhengzhou. The changes include optimized layouts and a major overhaul of product selection, replacing many old items with new ones."
These improvements seem effective, with customers eagerly queuing up for Pangdonglai's iconic beer and popular desserts. To learn more, I traveled to Xuchang, the origin of Pangdonglai. Arriving at 4:40 PM on a Monday, I found cars lined up outside a Pangdonglai branch, waiting to enter the parking lot.
ZHOU YIXIN Xuchang, Henan Province "We are finally here at Pangdonglai Times Plaza. Even though it is just a Monday afternoon, we still waited an hour to get in here."
Inside, the aisles were packed with shoppers. Among the crowd, I spotted a man holding a flag, who seemed like a tour guide. He was leading a group of entrepreneurs from Jiangsu Province, one of China's most developed regions.
JIA TENG Manager Tiancheng Management Consulting Firm "The details of their service, the layout and arrangement of the store, their close relationship with customers, and the energy they spread all offer us many valuable lessons."
My curiosity grew even more after this trip. The next day, I spoke to customers and locals to understand why this supermarket is so attractive.
MS. SUN Customer "Their quality is pretty solid, pretty real, right? So many people believe in it, it must be good."
MR. ZHU Taxi Driver "Tourists come here to shop, they all come for Pangdonglai's integrity."
MS. LIANG Customer "My purpose of coming here is very clear, I want to buy Pangdonglai's own-label products, which can't be bought anywhere else."
At this point, I felt like I had only scratched the surface of the phenomenon. To delve deeper, I spoke to several experts. Many believe that Pangdonglai's organizational culture, especially its employee care, is the key to its success.
DR. DANIEL HAMPSON Associate Professor of Marketing International Business School Suzhou at XJTLU "Employees in the retail industry have a very difficult job. It's very demanding. And the only way that those frontline employees maintain sincere smiles and sincere willingness to help customers, which is what a lot of consumers loyal to Pangdonglai value, is that those employees are truly happy. It takes courage to make some decisions that Yu Donglai has made – to give employees 30 days of annual leave, to give them grievance bonuses."
They also mentioned the evolving customer expectations in China and how Pangdonglai's innovative business model meets these new demands.
DR. ROB KIM MARJERISON Associate Professor of Global Business Wenzhou-Kean University "This is part of globalization but also part of the economic development, that consumers have options and they are more demanding. And that group of consumers on the Chinese mainland is now very, very large. And they appreciate a store that has transparency, treats them respectfully, where they get personalized better service."
In addition to Pangdonglai, other supermarkets like Freshippo have also been innovating a lot. It combines online and offline shopping, providing plenty of items of its own brands with fast delivery services.
Experts say Pangdonglai's success, along with other supermarkets like Freshippo, illustrates the rapid evolution of China's retail market, underscoring the significance of adapting to consumer needs, and fostering a strong organizational culture and brand identity. They point out that as China's retail market continues to grow and evolve, it requires more effort and creative thinking to capture the hearts of Chinese consumers. Zhou Yixin, CGTN, Henan Province.
