Ever since Yonghui Superstores, which has a hot search physique this year, was &#34;modified&#34; by Pinduoduo, it seems to have also become a &#34;traffic player&#34; in the retail industry. And just last night, Miniso made a bold move by spending 6.3 billion to acquire the controlling stake of Yonghui Superstores' major shareholder, once again hitting the headlines across the entire internet.Miniso's determination to acquire Yonghui this time is undeniable. Because the agreement shows that the consideration for this transaction is 6.27 billion yuan. As of the end of June, Miniso's cash balance was 6.233 billion yuan.Why did Miniso suddenly attract attention to Yonghui, a traditional offline supermarket? During last night's conference call, Miniso's founder and CEO Ye Guofu pointed out the direct reasons— the Pinduoduo model, as well as Yonghui's transformation towards the Pinduoduo model:<blockquote>Over the past decade, after traveling around the world and seeing various retail formats and models, I found that the best retail model in China is the Pinduoduo model, which is superior to Costco, Sam's Club, and Trader Joe's. In fact, I believe that the Pinduoduo model is the only way out for Chinese supermarkets.</blockquote>After seeing the transformation of two Pinduoduo-style stores in Zhengzhou Yonghui, Ye Guofu decided to &#34;make a move&#34; on Yonghui:<blockquote>Why have I not taken action in the past and only now? It's because I see a new future, a new model, and new prospects. I hope everyone can be patient. I hope everyone can trust my vision. I am someone who not only looks at the retail industry in China but also globally. I may make mistakes elsewhere, but in the retail sector, I will definitely not make mistakes.</blockquote>In addition, according to &#34;Business Observer&#34; reports, some entrepreneurs also stated that Miniso's 6 billion investment in Yonghui is mainly due to seeing the positive effects of Yonghui's Pinduoduo-style transformation:<blockquote>He should have seen the power of Pinduoduo, and Henan Yonghui has transformed well.</blockquote>Industry insiders also see this investment as a bold move by Ye Guofu:<blockquote>This is a bold move, betting on the success of Yonghui's transformation. If successful, in another two years, this deal will become a great story.</blockquote>Hou Yi, the former CEO of Hema Fresh, also praised Ye Guofu's courage to invest in Yonghui on his WeChat Moments.<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/52d154be-fcdf-468f-b603-047b71f8ab3b.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/52d154be-fcdf-468f-b603-047b71f8ab3b.png"/><h2>By heavily investing in Yonghui, what does Miniso intend to do?</h2>The purpose of Miniso's acquisition of Yonghui can be analyzed from the perspective of &#34;three major synergies.&#34;1. User SynergyMiniso and Yonghui differ significantly in terms of user groups. Yonghui mainly focuses on fresh products, with the main user group being middle-aged and elderly people. On the other hand, Miniso is more popular among young people, with its products focusing on &#34;creative&#34; daily necessities.Therefore, after the investment, Yonghui's offline stores are expected to introduce Miniso's products and reach a wider range of Yonghui's customer base. At the same time, Yonghui's business lines may be updated to expand its user base to include young people.After the Pinduoduo-style transformation of Yonghui's stores in Zhengzhou, it has already begun to show attractiveness to young users. In addition, the development potential of Yonghui in the sinking market has also become a highlight that attracts Miniso to enter the market2. Supply Chain CollaborationAfter Miniso's investment in Yonghui, the focus may be on enhancing Yonghui's department store business line. This could involve efforts in independent distribution, developing own-brand products, improving trend capabilities, reducing supply chain costs and enhancing supply chain efficiency, as well as increasing department store gross profit.As Hou Yi mentioned, currently in the supermarket industry, fresh food businesses generally adopt a direct operation model, with enterprises moving towards direct sourcing from the origin to ensure the freshness and quality of goods. However, in the food and department store field, most supermarkets still rely on key account (KA) supply models, lacking the ability to operate through distribution and buyouts, while the development of own brands is relatively weak. This has led to challenges in the non-food business of Chinese supermarkets, making it difficult to be profitable. To address this situation, many supermarket enterprises are actively transforming, attempting to improve the operational model and brand strategy of their non-food business to enhance market competitiveness.&#34;Business Observer&#34; believes that with Miniso acquiring 29.4% of Yonghui's shares, there should be plans to launch new model stores, which would require some integration of channels and supply chains.3. Team CollaborationTargeting young users, Miniso's team itself is also more youthful, performing better in terms of organizational youthfulness, and having stronger capabilities in developing own brands and intellectual property (IP). This has also been the direction Yonghui has been committed to in its transformation efforts for some time.During the conference call announcing the acquisition of 29.4% of Yonghui Superstores' shares, Miniso's CFO Zhang Jingjing also provided an &#34;interpretation&#34; of this transaction:<blockquote>Firstly, from a retail perspective, Miniso sees potential in the future development of Yonghui Superstores and believes in the prospects of this business.Secondly, Yonghui Superstores' current valuation is attractive, with low premium on investment costs and high safety margin. With Miniso's entry, it can help optimize Yonghui Superstores' current shareholder and governance structure, support its existing business direction, and better leverage the integrated advantages of both parties in channel upgrading and supply chain.There is room for imagination in terms of supply chain and product development between the two parties. Currently, Yonghui Superstores has weak differentiation in the household goods category and low profit margins, while Miniso excels in this area. Additionally, Miniso and Yonghui Superstores have synergistic opportunities in channels, as Yonghui's current 855 stores only have around half of them within a two-kilometer radius of Miniso.</blockquote><h2>Is the &#34;Chinese Version of Costco&#34; Coming Soon?</h2>Since the rise of the &#34;Pinduoduo model,&#34; China's supermarket industry has also undergone a major transformation. After Yonghui's adjustments following the influence of Pinduoduo, both sales and customer traffic have achieved qualitative breakthroughs, allowing more people to see a new development direction for the supermarket industry.As Ye Guofu mentioned during the conference call, he found a more outstanding retail model than Costco, Sam's Club, and Trader Joe's in China. Therefore, the collaboration between Miniso and Yonghui may bring the birth of the &#34;Chinese version of Costco&#34; one step closer.In August 2019, Ye Guofu once posted late at night, stating that Costco is Miniso's mentor. Costco is the originator of &#34;low-price explosive sales&#34; and &#34;thin profit, high turnover.&#34; Ye Guofu believes that Costco interprets the most basic essence of retail in the simplest way - products! High cost-effective and differentiated products!<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/5ee212d7-cde3-4ead-8759-1cef8c170d8d.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/5ee212d7-cde3-4ead-8759-1cef8c170d8d.png"/>

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The "Pinduoduo Model" and Yonghui's transformation of the "Pinduoduo Model" have become the most critical factors in attracting Miniso to enter the market. Is a major transformation of Chinese supermarkets imminent?

- Miniso has acquired a 29.4% stake in Yonghui Supermarket for approximately 62.7 billion yuan, aiming to leverage Yonghui's transformation inspired by the successful "Fat Donglai" model.  
- The acquisition is seen as a strategic move to enhance user collaboration, supply chain efficiency, and team synergy, targeting a younger demographic and improving Yonghui's non-food business.  
- This partnership may pave the way for a "Chinese version of Costco," as both companies seek to innovate and optimize their retail strategies in a rapidly evolving market.

Miniso joins hands with Yonghui to "gamble" on offline supermarkets! Is "China's version of Costco" not far away?