As the first Hong Kong-listed retail chain to reach a scale of 10,000+ stores, Guoquan's achievements are beyond question. Now, it would face a more difficult challenge: after reaching the 10,000-store milestone, how can it continue to refine operations and sustain growth through internal business drivers?
Robert Chang, Founding Partner of GenBridge Capital, believes that the development of chain retail brands will go through three stages:
- The first is store expansion, where economies of scale serve as the core driving force.
- Once a scale advantage is established, the next step is to boost same-store sales through category expansion, a stage that tests the core competencies of retail operations.
- Finally, the focus shifts to deepening supply chain capabilities, transforming a trade-based supply chain into a manufacturing-oriented one, thereby securing profits starting from the production stage.
In its latest financial report, Guoquan provided an industry-wide answer:
- As of December 31, 2024, Guoquan achieved:
- Annual revenue of RMB 6.47 billion, a yoy increase of 6.2%.
- Gross profit reached RMB 1.417 billion, up 4.9% yoy.
- Core operating profit was RMB 311 million, representing a 3.1% increase.
- Cash reserves stood at RMB 2.125 billion, growing 9.8%.
- Debt ratio further declined to 3.2%.
- Total final dividend exceeded over RMB 200 million, representing a yoy increase of 39.8%.
Product Highlights: The "RMB 99 Beef Tripe Hotpot Freedom Set Meal" launched in May 2024, became a hit with consumers, generating a total of RMB 500 million in sales over the past year.
Channel Expansion: Guoquan's total store count has reached 10,150, covering 31 provinces, municipalities, and autonomous regions. Notably, Guoquan has also continued innovating store formats, opening 287 upgraded stores "Yaoyao Fresh"，smaller and lower-cost outlets tailored to township and rural markets.
Supply Chain: In 2024, Guoquan added three new ingredient processing plants, specializing in freshwater products, shrimp paste, and sour soup products respectively.
From hotpot to BBQ, Western cuisine to beverages, a single Guoquan store can meet urban and rural consumers’ one-stop shopping needs. Its single-product, single-factory production model and digitalized supply chain have laid a solid foundation for steady growth.
Mingchao Yang, Chairman of Guoquan, stated that the company aims to reach 20,000 stores within the next five years, “On one hand, each store must achieve high-quality growth and improved efficiency; on the other hand, we’ll continue to densify our store network.” Going forward, Guoquan will also build an “open Guoquan” system , exporting its commercial capabilities as a platform, and creating an open, healthy, and positive business ecosystem.
Expanding categories, increasing purchase frequency, boosting repurchase rates
Starting with hotpot, Guoquan first went deep, then broad, gradually expanding into eight major categories: BBQ, beverages, single-serve meals, ready-to-cook meal kits, fresh food, Western cuisine, and snacks—creating a multi-dimensional product system. Last summer, Guoquan also launched its own branded multi-flavor craft beers, bundled with BBQ items. Currently, the average GMV per store is around RMB 2–3 million, with hotpot’s share of revenue declining year by year.
New products and category expansion have brought not only increased sales, but also a larger member base. In 2024, Guoquan’s membership base grew from 27.9 million in 2023 to 41.33 million, marking a 48.2% increase. Member prepaid balances reached RMB 990 million, up 36.6% yoy, reflecting significantly improved user loyalty.
Guoquan previously went through a period of strategic adjustment. In 2023, facing a challenging consumer market and a slower-than-expected recovery, the company quickly pivoted its approach. “Stabilize the overall business, maintain modest growth, and rapidly adjust the structure”, including slowing down the pace of new store openings.
“How do we retain customers? How do we improve conversion? It’s not enough to just attract traffic; we need to be able to capture and retain it. That’s why we’ve focused on purchase frequency and repeat buying,” said Mingchao Yang.
So, how does Guoquan boost purchase frequency and repurchase rates?
Firstly, focus on creating “blockbuster products.” Take the Beef Tripe Hotpot Set mentioned earlier, it became a massive hit thanks to Guoquan seizing new opportunities in online sales. In 2024, TikTok’s local lifestyle sector experienced strong growth, with transaction volume projected to rise by 81%.
Guoquan tapped into the boom of interest-based e-commerce in local retail to link online and offline business.
Second, membership operations were a strategic priority for Guoquan in 2024. According to Mingchao Yang, the average spending per member far exceeds the norm, with high-recharge members spending twice as much as those in the lower tiers. To further tap into members’ repurchase potential, Guoquan set up a dedicated department to integrate online operations and strengthen the connection between traffic and membership. This included segmenting members based on their spending levels.
Third, Guoquan adjusted its product structure. Moving beyond non-essential dinner-oriented categories like hotpot and BBQ, the company expanded into breakfast, lunch, and cold beverage segments to increase purchase frequency and fulfill consumers’ one-stop daily meal needs.
According to Mingchao Yang, Guoquan's average GMV per store is currently around RMB 2–3 million, with 80% of revenue coming from hotpot, 20% from BBQ, and 3% from beverages (such as Guoquan’s own craft beer). “As we continue to expand categories, revenue will keep rising,” he noted.
Fourth, Guoquan is innovating its store formats and retail channels. In 2024, it upgraded 287 township-level stores, launching a “Yaoyao Fresh” model, which is a smaller and lower-cost format located in farmers’ markets, focuses on ready-made and quick-cook meal products. These stores can achieve up to RMB 30,000 in sales on their first day, and break even in as little as five months. In early 2025, Guoquan also introduced 24-hour unmanned retail and takeaway stores, targeting the late-night dining segment and building an all-day instant retail network.
Mingchao Yang also revealed that between May and June this year, Guoquan plans to open alcohol and beverage convenience stores to explore the “drink-to-home” concept. These stores will carry alcoholic drinks, cold beverages, breakfast bakery items, and more.
According to Robert Chang, Founding Partner of GenBridge Capital, the core competitiveness in retail does not lie in a single successful product or model—but rather in the ability to evolve continuously. In the face of changing market dynamics, Guoquan does not cling to past experience. Instead, it flexibly adjusts its strategies based on its competitive position, allowing it to adapt and evolve dynamically. “This ability to respond positively to change will be the decisive factor in retail competition during the stock-based growth era.”
From buyer to supply chain platform
Guoquan's ability to flexibly adjust strategies, expand categories, and innovate store formats is inseparable from its robust and efficient supply chain system and platform-driven model.
Mingchao Yang positions Guoquan as a platform with economies of scale, which means one employee can manage up to 30 stores, and a single supply chain system can serve dining tables across the country.
Guoquan has actively built out its upstream industrial chain. Through equity investments and acquisitions, it has established deep partnerships with hundreds of suppliers. Over the past year, Guoquan developed 412 new SKUs. For key products, it has implemented a “one product, one factory” model, allowing suppliers to focus on a single category or product. This ensures better quality control, and also enhances scale efficiency and bargaining power.
“Each factory produces a single dish; together, they make up a complete meal. The combo sets that Guoquan sells are product combinations, and the industrial parks are factory combinations,” said Mingchao Yang.
In 2024, Guoquan further deepened its vertical integration in the industry. Through self-construction and acquisitions, it added three new food ingredient factories, each focusing on a different category: freshwater products, shrimp paste, and sour soup base. By the end of 2024, Guoquan had built a total of six self-owned food ingredient factories, doubling the number from 2023.
Mingchao Yang stated that Guoquan’s self-owned factories must meet five key criteria:
- Categories with demand but without strong brands (e.g., beef, steak);
- Unsaturated and growing markets;
- A leading edge in raw materials or processing technology;
- Compound products with hidden gross margins;
- Strong potential for synergy with Guoquan’s existing operations.
Beyond the production stage, Guoquan is also increasing investment in its distribution and logistics.
In 2024, Guoquan fully acquired Henan Huading Cold Chain, a logistics provider that has served over 200,000 restaurant outlets since 2019. Huading operates 22 provincial-level warehousing centers across China, maintains 500,000 digital shelves, and runs 2,890 trunk and branch delivery routes. Its distribution network now covers every province and region in China, excluding Hong Kong, Macau, Taiwan, and Tibet. This acquisition solved Guoquan’s last-mile delivery challenge, ensuring stable supply even for county and township-level stores.
With this move, Guoquan has built a comprehensive storage system covering refrigerated, frozen, and ambient temperature goods. Backed by 18 digital central warehouses and a digital inventory and barcode management system, Guoquan can now offer next-day delivery to most parts of the country, including rural areas. Store owners can place orders via mobile phone, and cold chain trucks show up at their doorsteps the next day. Enabled by this digital supply chain, Guoquan has reduced its inventory turnover days by 25% year-over-year compared to 2023.
We believe that building a strong supply chain is essential for any brand aiming to become a long-term winner in the consumer market. Guoquan has achieved this through three innovations:
- Single-product, single-factory model.
- Direct sourcing from origin.
- Cold chain infrastructure investment.
These pillars have enabled Guoquan to form a 100-billion-yuan industrial cluster, integrating production, supply, and sales into a seamless system—what it calls the “3-2-1 industrial linkage.” This structure ensures a continuously expanding value chain.
With deepened supply chain capabilities, Guoquan is now expanding internationally. Its first global outpost is in Southeast Asia, driven by “China supply chain + global market” and “AI + community-based retail”. The goal is to achieve double-digit revenue growth and push the share of overseas business beyond 5%.
GenBridge Capital invested in Guoquan back in 2020, drawn by its strong product development and supply chain capabilities.
Operating in the food industry, Guoquan Shihui is deeply rooted in product excellence. Its founding team has decades of experience in hot pot and barbecue, with an unwavering commitment to product R&D and quality. At the same time, Guoquan has made long-term supply chain investments, identifying top suppliers nationwide for each product category, while also building high-standard, capital-intensive food industrial parks to bring more production in-house.
In today's buyer-driven market, a company like Guoquan, which combines manufacturing and retail seamlessly, represents the future of the food industry.
Speaking on the company’s mission, Chairman Mingchao Yang once said:“We hope to collect the finest ingredients from around the world and share delicious flavors with everyone.” After 10 years of development, Guoquan has grown from a small hot pot store in Zhengzhou into a nationwide retail chain with over 10,000 locations. Looking forward, Guoquan aims to bring the concept of “eating well at home” to every corner of the world.