In Depth: How Miniso’s Founder Aims to Engineer a Supermarket Turnaround

Ye Guofu, co-founder of Miniso Group, has recently become the driving force behind the restructuring of Yonghui Superstores, one of China’s largest supermarket chains. His involvement includes radical efforts to improve transparency and overhaul procurement systems, as symbolized by his sharing of direct contact details with suppliers to combat corruption and inefficiency. This signals his sincere commitment to establishing an open, accountable supply chain for Yonghui, which he now leads as Miniso became the company’s largest shareholder in early 2025 [para. 1][para. 2][para. 3].

The financial markets initially responded with optimism to the Miniso-Yonghui partnership. After the September 2024 announcement of Miniso’s acquisition of a 29.4% stake (for 6.27 billion yuan), Yonghui’s share price surged, though it has since retreated somewhat. The market had faith in Ye’s retail credentials: Miniso is renowned for its efficient, IP-driven product strategy and wide global presence, operating over 7,500 stores and recording around 17 billion yuan in revenue in 2024, up 22.8% year-on-year. Ye’s challenge is to apply Miniso’s successful strategies to rescue Yonghui, which has suffered four consecutive years of losses, including a 1.47 billion yuan loss in 2024—part of an industry-wide slump where 60% of supermarkets saw sales declines that year [para. 4][para. 5][para. 6][para. 7][para. 8][para. 9][para. 10][para. 11][para. 12][para. 13][para. 14][para. 15][para. 16].

Yonghui was previously considered an industry success story, pioneering direct fresh-produce sourcing and expanding quickly to over 1,000 stores with annual revenue peaking at 93 billion yuan in 2020. However, intense competition from both domestic online grocers (like Dingdong Maicai) and incoming global discount chains (Costco, Aldi), alongside the rise of e-commerce, battered its profits. The broader supermarket sector in China also shrank: the top 100 chains’ combined revenue fell from 979 billion yuan in 2019 to 868 billion yuan in 2023. Leading the pack, Walmart is only slightly ahead, highlighting Yonghui’s significance [para. 17][para. 18][para. 19][para. 20][para. 21].

Ye’s reform strategy is multifaceted. He aims to revamp supply chains to utilize direct sourcing, thereby reducing costs, fees, and middleman inefficiencies, and increasing value. He is trimming Yonghui’s supplier base to approximately 200 core, high-quality suppliers, whom he intends to personally engage annually. Furthermore, Ye wants to adopt a Miniso-style product selection—fewer but more distinctive, high-margin products, stressing differentiation and IP-brand collaborations. There are ambitious targets: by 2029, Yonghui plans to have 400 self-owned products generating over 100 million yuan each, 50 products earning over 500 million yuan, and 15 achieving 1 billion yuan each in sales [para. 22][para. 23][para. 24][para. 25][para. 26][para. 27][para. 28][para. 29][para. 30].

Inspired by Pangdonglai, a successful regional grocer, Yonghui is also remodeling stores to improve product quality and customer service, despite high renovation costs of 6–10 million yuan per store. Customer traffic and sales at upgraded locations have already seen significant increases. To finance this, Yonghui is closing underperforming stores (targeting 250–350 closures out of nearly 800) and selling non-core assets. Despite a drop in operating cash flow, with strong cash reserves (3.83 billion yuan at 2024 year-end), support from local authorities, and ongoing asset sales, analysts believe Yonghui can weather the financial strain of transformation and that the shake-up could yield long-term profitability [para. 31][para. 32][para. 33][para. 34][para. 35][para. 36][para. 37][para. 38][para. 39][para. 40][para. 41][para. 42][para. 43][para. 44][para. 45][para. 46].