Qian Da Ma IPO: The "Deconstructed" Nissin Model and the Vanishing Near-Field Red Benefits

Once considered the most successful example of community fresh food chains, Qian Da Ma is now heading toward the capital markets.

Recently, leading community fresh food chain company “Qian Da Ma” filed its prospectus with the Hong Kong Stock Exchange, planning an IPO on the main board.

As China’s leading community fresh food chain, Qian Da Ma was founded in 2012. It pioneered the “Discount Day Clearance” sales model and is known for its promise of “not selling overnight meat.”

During its most favored capital phase, Qian Da Ma experienced rapid expansion.

After completing Series D financing in 2019, the company officially launched a nationwide strategy, with revenue quickly surpassing 7 billion yuan. Its high-density store opening and high-turnover model enabled it to rapidly become a leader in community fresh food chains.

However, compared to its expansion period, the company’s growth has noticeably slowed in recent years.

From 2023 to 2024, Qian Da Ma’s revenue remained around 11.7 billion yuan, without significant breakthroughs, and in the first three quarters of 2025, revenue declined year-over-year.

Store scale has also plateaued. Since late 2022, the total number of stores has hovered around 2,900, with expansion nearly stagnating.

Qian Da Ma’s changes reflect a shift in the community fresh food industry over the past decade.

From the initial high hopes for community chains, to the rise of fresh e-commerce, pre-positioned warehouses, and instant retail, consumer purchasing methods for fresh food have been continuously reshaped. Some demand originally concentrated in small community stores has been diverted to different formats.

What Qian Da Ma may need to convince investors is: as community retail enters a stage of multi-format coexistence, does the first-generation fresh food chain model centered on “Day Clearance” still have room for sustained expansion?

“Day Clearance” Model Boundaries

Qian Da Ma’s rapid expansion in the early years was largely built on its unique “Day Clearance” model.

The so-called Day Clearance means that stores must sell out all stock purchased on the same day, using discounts to clear inventory, fulfilling the promise of “not selling overnight meat.”

“Day Clearance” is not industry innovation, but for high-loss fresh retail, if inventory cannot be cleared, profits are quickly eroded. Few chain brands can sustain this long-term.

Qian Da Ma’s uniqueness lies in its evolved stepwise “Discount Day Clearance” mechanism.

As store hours end, products gradually reduce in price at a fixed pace, creating a game between consumers “waiting for lower discounts” and “buying early.”

If discounts reach the last level or even free distribution, desired products may already be bought by others. This “prisoner’s dilemma”-like psychology causes most inventory to clear early in the evening, avoiding reliance on late-night clearance.

However, this mechanism also cultivates low-price consumption habits among customers, objectively increasing operational demands.

To support this, Qian Da Ma builds systems from two ends.

One is SKU simplification and standardized product selection. Compared to hypermarket structures with thousands of SKUs, Qian Da Ma is closer to a standardized community market, reducing complexity to speed up turnover.

The other is a dense distribution network, supporting high-frequency replenishment and quick turnover to maintain overall operational efficiency.

By early 2025, Qian Da Ma operated 16 integrated warehouses nationwide, with most fresh products circulating within 12 hours. Core pork products from slaughterhouses to stores typically take only 6-8 hours.

Another challenge of the “Day Clearance” model is execution. If franchisees interfere with discount timing or hoard overnight stock, the entire system fails.

To address this, the company early on introduced ERP automatic discount systems to ensure prices follow unified rules, supplemented by video monitoring and audits, with real-time penalties for violations.

Meanwhile, Qian Da Ma relies on data systems to advise stores on replenishment, controlling discount clearance ratios within manageable ranges to reduce losses at the source.

As of September 2025, the company operated 2,938 stores across 14 provinces and Hong Kong and Macau, with over 98% franchise stores.

However, as scale expands, this high-density, high-turnover model shows constraints outside its core South China market.

Supply chain replication across regions is a major difficulty.

Long Zhen, founder of Jamu Data, told Xin Feng: “Qian Da Ma seems to be expanding nationwide, but fresh food business is fundamentally about local supply chains.”

Long Zhen explained that fruits can rely on a few core producing regions for nationwide procurement, but vegetables lack stable core origins, and meat depends heavily on local slaughter and distribution.

Furthermore, new regional stores are more dispersed, requiring rebuilding cold chain logistics and warehouse networks. The per-store supply chain costs increase, and the “Day Clearance” demands on sales volume and turnover become stricter.

In the first three quarters of 2025, Qian Da Ma’s gross profit margin in South China was 12.5%, more than double that of other inland regions.

“Years ago, it was impossible for Qian Da Ma to operate in Chengdu or Shanghai because of procurement issues,” Long Zhen said. “As a chain, if procurement prices are worse than neighboring small shops, there’s no cost advantage, so no one wants to follow.”

Differences in consumer habits also impact model replication.

Unlike humid, hot South China where freshness is prioritized, in some northern or non-first-tier cities, households tend to stockpile more, making the high-turnover “Day Clearance” model difficult to establish.

When customer flow or turnover drops, store operating pressure rises quickly. The ramp-up period in new cities lengthens, and headquarters must increase investment in site selection, distribution, and franchise management, making early expansion more difficult.

From 2023 to Q3 2025, the company opened 908 new stores but closed 916, with South China stores accounting for nearly 70%, and nationwide expansion remains slow.

Diminished “Proximity” Benefits

Back in 2018, community fresh food chains like Qian Da Ma were seen as one of the most certain directions in offline retail.

At that time, fresh food was one of the few high-frequency essentials still mainly consumed offline.

Compared to large supermarkets with high site costs and slow replication, small community stores had lower investment, closer to residents’ daily lives, and could form stable repeat purchases. Compared to pure e-commerce, community fresh stores could complete last-mile delivery with physical stores, balancing cost and timeliness.

In this context, community franchise chains like Qian Da Ma were believed to be able to establish stable profit models by forming sufficient density in a single region, relying on high turnover and centralized distribution, even if nationwide procurement was difficult.

Financially, this model was supported.

In 2024, the company’s gross profit margin was 10.2%, with product sales to franchisees and direct retail at 8.1%.

With a high proportion of basic fresh products, this level is close to Yonghui Supermarket’s “Fresh & Processed” segment in the “Fat Reform.”

In terms of categories, pork and vegetable sales together account for nearly half, meaning profits mainly come from turnover efficiency rather than high-margin products. As long as store density continues to increase, supply chain efficiency still has room for improvement.

But this judgment assumes that near-field consumer demand is still primarily served by offline stores.

What truly changes the community fresh food ecosystem is not just the expansion obstacles of individual companies, but a rapid shift in the overall competitive logic of proximity retail.

While Qian Da Ma accelerates its nationwide push, a large portion of fresh food consumption has shifted online due to the pandemic. Instant delivery systems rapidly built infrastructure, with pre-positioned warehouses, warehouse-store integration, and platform flash sales expanding quickly. Consumer habits that would have taken years to cultivate were accelerated.

By around 2025, China’s instant retail market approached one trillion yuan, with over 500 million monthly active users. Micro fulfillment networks based on pre-positioned warehouses and lightning-fast warehouses reached tens of thousands of nodes.

Pre-positioned warehouses and platform systems can offer thousands of products, reduce losses via algorithms, and improve inventory turnover, enhancing overall efficiency through fulfillment networks rather than store density.

The community fresh food model relying on regional density and high turnover is not entirely obsolete, but its market space is shrinking.

Qian Da Ma’s next phase will no longer rely solely on store replication but will attempt to address supply chain, digitalization, and product mix shortcomings.

The upcoming IPO funds will mainly be used to expand store networks, strengthen supply chain capabilities, upgrade digital systems, and develop private brands.

The plan is to add about 1,300 franchise stores and 100 self-operated stores over five years, build integrated warehouses and processing capacity, increase direct procurement and order-based breeding, and invest more in high-margin categories like pre-made dishes and cold processed foods.

Additionally, the company plans to accelerate market entry through investments or acquisitions of regional or processing-capable fresh retail and supply chain enterprises.

It’s important to note that the urgency of this IPO also stems from redemption clauses in previous financing agreements.

Qian Da Ma and multiple investors agreed that if the company does not go public before January 1, 2027, preferred shares will be redeemed at a price of principal plus 8% annual compound interest, with the latest investment terms promising a 15% simple interest return.

As of the end of September 2025, about 1.58 billion yuan of redeemable preferred shares are recorded as financial liabilities, pushing the asset-liability ratio to 196.6%.

As the proximity benefits fade and nationwide expansion remains slow, this IPO appears to be a last effort to secure capital before the old model fully loses its edge.