How did Guoquan earn its 450 million?

After surpassing 10,000 stores, how should a retail company move forward? Guoquan offers a new perspective to the market.

This company, positioned as a “community central kitchen,” is heading toward “manufacturing, distribution, and retail,” aiming to achieve “overall cost leadership” through its own brand and supply chain efficiency. Currently, Guoquan’s self-produced product rate has reached 20%, and all product lines are private brands.

What would this approach look like taken to the extreme? Founder Yang Mingchao provided a benchmark in his 2026 New Year’s speech: Guoquan has the potential to become China’s version of Sam’s Club or East Asia’s Kobe Bussan.

On the evening of March 12, Guoquan (02517.HK) released its 2025 financial report: revenue of 7.81 billion yuan, up 20.7% year-over-year; net profit of 454 million yuan, up 88.2%. Amidst industry cooling, this performance remains impressive.

No offline, no Guoquan

In 2025, the Chinese retail industry’s direction changed.

Once loudly proclaiming “disrupt offline,” Meituan, Hema, and JD.com have all shifted to building community retail physical networks.

When these giants just entered the scene, a Henan-based company had already been operating here for nine years.

Founded in 2015, Guoquan started with frozen food wholesale, and two years later opened its first retail store in Zhengzhou, targeting high-frequency “home dining” scenarios like hotpot and barbecue.

Since then, it has consistently positioned itself as a “community central kitchen,” opening stores in residential areas and towns so residents can buy hotpot ingredients, skewers, and pre-made dishes that are easy to cook—saving the trouble of buying, washing, and chopping. It even offers free rental of grills, electric hotpots, and other cooking appliances.

In simple terms, Guoquan’s business model is a typical offline community retail, playing the lazy economy, leveraging the physical advantage of “buying downstairs” to serve the demand for “home dining.”

On March 12, Guoquan released its 2025 annual performance report: total revenue of 7.81 billion yuan, up 20.7%; net profit of 454 million yuan, up 88.2%; core operating profit of 461 million yuan, up 48.2%.

In the context of consumer segmentation and intensified retail competition, such growth is rare, especially with profit growth outpacing revenue by 2.3 times.

Profit growth has become noticeably faster than revenue growth, a direct reflection of scale effects. By the end of 2025, Guoquan had a total of 11,566 stores, a net increase of 1,416 stores during the year, with registered members surpassing 64.9 million, up 57.1% year-over-year.

Guoquan attributes this achievement to “the concentrated realization of long-term invested systemic capabilities.” They claim that in 2025, they achieved breakthroughs across channels, stores, scenarios, and formats, shifting growth from “speed-based” to “system-based.”

“No one can leave offline; without offline, there is no Guoquan,” emphasized founder Yang Mingchao in his 2026 New Year’s speech. The company will continue to insist on offline presence and, based on surpassing 10,000 stores, move toward “manufacturing, distribution, and retail.”

According to the 2025 annual report, town and rural markets remain a key focus for Guoquan’s offline store layout, with 1,004 new stores added in a year, bringing the total to 3,010 stores. These new stores are more tailored to local consumer habits in terms of product mix and display.

Meanwhile, in mid-to-high-tier cities, Guoquan has completed intelligent and unmanned upgrades for over 3,000 retail stores, and launched 24-hour unmanned retail stores, turning “buy downstairs” into “buy anytime.”

However, since 99% of Guoquan’s stores operate under franchise models, rapid expansion also increases management risks. In 2025, the company experienced multiple food safety issues and consumer complaints.

Beyond 10,000 stores, reimagining three “Guoquans”

Reaching 10,000 stores is no longer rare in today’s Chinese retail industry. It’s shifting from a myth of individual giants to a standard for leading brands, like Mixue Bingcheng in milk tea, Wallace in fast food, and Mingming Busy in snacks.

Industry forecasts suggest that in the next 3–5 years, the number of Chinese chain brands surpassing 10,000 stores could exceed 100.

Yang Mingchao’s ambitions are clearly beyond that. He has publicly expressed a goal: to open 40,000 community central kitchens nationwide, covering 48,000 towns and 650,000 administrative villages. In other words, he aims to create three more “Guoquans” based on the current scale.

Where will the growth come from? Based on current deployment, it points toward sinking markets.

According to data from Narrow Door Restaurant Insights, Guoquan currently operates 10,912 stores nationwide, with over 77% located in second-tier and below cities.

In 2025, Guoquan added 1,004 town stores. These new stores differ from previous standard formats, with targeted adjustments. For example, rural consumers lack vegetables but need protein, so product focus is on meat and beverages; stores adopt an integrated “BC” model, serving both households and local small restaurants or farm-stay venues.

Compared to other retail companies, Guoquan’s approach is more “heavy.” It builds its own factories, logistics, and stores, controlling the entire “production, supply, and sales” chain, whereas most players only handle the latter two.

Even before going public, Guoquan was already China’s largest supplier of household hotpot and barbecue ingredients. It has established seven self-owned factories covering beef, meatballs, processed meats, base ingredients, and seafood, and operates 19 digital central warehouses across the country.

Research from Open Source Securities pointed out that this model not only gives Guoquan control over production and quality but also covers key supply chain segments of the hotpot industry through category-specific layouts, significantly reducing reliance on external supply chains.

However, looking at Guoquan Industrial’s parent company, many underestimate its industrial layout.

Guoquan Industrial’s Huading Cold Chain ranks among the top three in China’s cold chain logistics industry, serving over 400,000 terminal outlets. In the food industry segment, Guoquan Industrial uses consumer data to “produce based on sales” and has built a Ching Ming Food Technology Industrial Park in Luoyi, Zhoukou, which now hosts 22 food enterprises.

In 2025, Guoquan Industrial also participated in restructuring Songhe Liquor—Henan’s only aromatic Chinese famous liquor.

The logic of making alcohol is straightforward: Guoquan has been focusing on “home dining,” and drinking is an essential part of meals. Baijiu and beer are important categories in stores. Last year, the company also explored new formats for alcohol convenience stores.

Another noteworthy new attempt is Guoquan Stir-Fry. It aims to combine standardized supply chains, smart equipment, and community stores, extending its business from ingredient retail to freshly prepared dining retail. Reportedly, based on its Chengdu R&D center, Guoquan Stir-Fry has completed testing of 50 dishes.

Ultimately, these layouts are natural extensions of the “integrated production, supply, and sales” logic. Whether this model can generate significant space in rural markets remains to be seen over time.

For high-frequency consumption scenarios in county markets, such as夫妻店 (mom-and-pop shops) and farmers’ markets, Guojin Securities believes that Guoquan can refine standardized store models, optimize categories and scenario-based product selection, precisely meet immediate consumption needs, and effectively lower the barriers to store replication. This may offer a relatively pragmatic solution.

【Editor: Meng Yuan】

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