11,566 stores with annual revenue of 7.8 billion yuan, over 1,000 new stores opened, Guoquan aims to be the "township version of Sam's Club"

How does AI · Guoquan achieve a performance turnaround from a period of confusion?

Source: Times Finance Author: Chen Zexuan

Image source: Guoquan

“2023 and 2024 were very confusing. We were prepared for the number of stores to drop to 7,000 (and accepted the) worst-case scenario, but last year not only did it not decrease, it actually increased,” said Yang Mingchao, founder of Guoquan (02517.HK), at the 2025 annual performance briefing on March 13.

In 2025, Guoquan delivered its best performance since going public. Financial reports show the company achieved total revenue of 7.81 billion yuan, a 20.7% increase year-over-year; gross profit of 1.687 billion yuan, up 19.0%; net profit of 454 million yuan, an 88.2% surge; and core operating profit of 461 million yuan, up 48.2%.

In 2025, Guoquan restarted store expansion, increasing the number of stores to 11,566, with a net addition of 1,416 stores throughout the year. Among these, township stores are viewed by Yang Mingchao as “the Sam’s Club of townships,” with a net increase of 1,004 stores, accounting for 70% of the total net new stores for the year, becoming a key growth driver.

During the “confusing” 2023 to 2024 period, this company, which previously added over 2,000 stores annually, slowed its expansion pace and then experienced a brief decline in total store count.

In interviews with Times Finance and other media, Yang Mingchao admitted that rapid expansion in the past was not sustainable—while profitable, the fundamentals were weak. Coupled with the impact of the pandemic and drastic changes in China’s economic and consumer structures, Guoquan was affected.

He believes that the growth in 2025 is not accidental but supported by a clear logical framework, which will continue to underpin Guoquan’s better revenue performance in 2026.

Betting on Instant Retail, Flash Shopping Drives Performance Growth

For 2025, Yang Mingchao’s key word for Guoquan was “vigorous.”

This “vigorous” year was driven by a series of operational innovations, including promoting large store adjustments, exploring off-season operations, strengthening membership management, deploying instant retail, and launching “Guoquan Flash Shopping.” They also experimented with AI-powered 24-hour retail modes and explored large-store models in southern markets.

Guoquan’s journey from inception to a scale of tens of thousands of stores is built on a community store model of 40–80 square meters. However, changing consumer demands mean even core strengths need adaptation. In 2025, Guoquan began upgrading community stores to large-store formats, expanding store size, and boosting product categories, consumption scenarios, and service experiences. The pace of opening large stores will accelerate in 2026, with plans to add about 3,000 large stores through new openings and renovations of existing stores.

Yang Mingchao stated that the large-store model has already shown clear results, with both new large stores and upgraded existing stores experiencing significant GMV growth compared to previous small stores.

The retail industry is rapidly shifting from “long-distance, long-cycle” to “local, instant, efficient,” and instant retail is entering a period of explosive growth. In September 2024, Guoquan announced its instant retail strategy, using Guoquan stores as front warehouses to enable online content marketing and offline delivery within three hours, launching “Guoquan Flash Shopping.”

“We have a solid foundation, so we seized the window of opportunity for instant retail, which improved store efficiency and labor productivity last year,” Yang Mingchao said. “The value of flash shopping has risen to the highest level of operations.”

Yang Mingchao divides Guoquan’s ten-year development into three phases. The first phase (2017–2019) validated the “hotpot at home” model, with store numbers growing from zero to nearly 1,400; the second phase (2020–2022) focused on providing systematic solutions for “dining at home,” with rapid store expansion; the current phase is a new era driven by instant retail and consumption scene explosions, achieving “structural growth” in performance.

“You can see a change: Guoquan’s overall revenue increased by 20%, but its profit structure changed, which is related to platform economy,” Yang explained further.

Large-store upgrades, new large store openings, sinking into lower-tier markets, membership operations, and brand downscaling together form Guoquan’s new “infrastructure,” driving overall performance growth. “And this trend will continue as long as the window for instant retail remains open. Guoquan will definitely see significant growth in its self-operated ‘flash shopping’,” he added.

A 10-Year Sprint Toward 20,000 Township Stores, Rebuilding a “New Guoquan”

After a “vigorous” 2025, Yang Mingchao has even bigger goals—creating a “New Guoquan.”

Regarding store expansion, Yang Mingchao revealed that last year, Guoquan’s store closure rate significantly decreased, and this year it is expected to decrease further. “In 2026, we plan to add 3,000 stores, reaching around 14,500. Large-store upgrades will involve two to three thousand stores.”

In 2025, Guoquan net added 1,416 stores, with township stores accounting for 1,004, becoming the core driver of growth. As of December 31, 2025, Guoquan’s township market stores totaled 3,010.

Yang Mingchao explained that Guoquan is optimistic about township markets because China has 38,000 townships and 650,000 village-level administrative units, offering vast market potential. “The sinking market has many unmet demands for delicious food, and community catering is scarce—this is Guoquan’s opportunity.”

Meanwhile, township supply chains are often underdeveloped. Guoquan’s large township stores can serve both B2B and B2C, which is a key difference from community stores. Yang Mingchao revealed that some township stores even generate revenue exceeding county-level stores. “Guoquan’s township stores are like Sam’s Clubs in the U.S.—residents in suburbs go to the city for shopping, and townships follow the same logic.”

He added that Guoquan has been exploring the township store model for three years and began ramping up efforts in 2025. He estimates that over the next decade, Guoquan’s township store count could reach at least 20,000.

Beyond vertical “deep sinking,” Guoquan is also expanding horizontally. Yang admitted that despite ten years of entrepreneurship, Guoquan has yet to truly break into the southern market. “In the next ten years, we aim to focus on the south,” he said, noting “the past decade was about Zhengzhou; the next decade will be about Shenzhen.”

Yang believes South China has always been a “tough nut” for Guoquan. “We’ve done well in Xinjiang and Tibet, but it took three years in South China without finding a suitable model,” despite changing two CEOs. He attributes this to product focus—mainly hotpot and frozen barbecue items—and the mismatch between existing store models, operational efficiency, and local consumer habits.

Guoquan needs to find a balance between frozen products and fresh food to drive traffic, repurchase rates, and scene expansion, creating a business model suited for South China. In the second half of 2025, Guoquan will designate South China as a “special zone,” with Yang personally leading efforts.

He revealed that the southern market already shows promising data: 80-square-meter stores in the region have doubled GMV compared to traditional stores and have been stable for half a year. The plan is to finalize the southern store model by June this year, with clear investment return cycles, making it a “very good investment and franchise model.”

“We expect to break through in South China this year, reaching a scale of 300 stores, including the Greater Bay Area, then expanding to Guangdong, Guangxi, southern Hunan, and Jiangxi,” he said.

Additionally, Yang mentioned that beyond large-store upgrades and township/ community store expansion, the company is exploring new consumption scenes, including “Guoquan Stir-Fry” and “Guoquan Camping” stores.

“Guoquan Camping has been in development for three years. This year, we will accelerate nationwide, opening indoor camping, suburban camping, scenic area camping, and even homestays, exploring scenes outside traditional community settings,” Yang explained.

Guoquan Stir-Fry will debut in Zhengzhou this year. Yang revealed that the project is already in the final trial stage, with data from these stores being transferred to community outlets for direct market testing with families. If successful, franchise openings are expected in the second half of this year.