Author | Wang Xiaojuan
Editor | Zhang Xiaoling
8 years ago, 39-year-old Ye Guofu shouted to Jack Ma across the sky: &#34;Admit defeat early, I'll help you with 1 billion!&#34;
At that time, Jack Ma was the king of e-commerce, while Ye Guofu's Miniso was just an inconspicuous ten-yuan store, and no one paid attention to his shout.
Eight years later, the former &#34;Guangzhou Afu&#34; spent 6.27 billion yuan, acquired 29.4% of Yonghui Superstores from JD.com and others, becoming the largest shareholder.
On the other hand, Alibaba's acquisition of Darunfa for over 50 billion Hong Kong dollars ended up on the shelf.
The person who dared to challenge Jack Ma many years ago seems to have won a round against Jack Ma in offline retail; with advances and retreats, the Chinese retail industry has also undergone a transformation. Ye Guofu has also launched a sprint towards the king of new retail in China.
However, the rapidly changing consumer environment and consumption trends pose significant challenges to the retail industry. Ye Guofu, who acquired Yonghui, has embarked on a bold gamble, and the road ahead is still full of obstacles.
<h2>Snake Swallowing Elephant</h2>
This year, a shocking mega-merger took place in China's retail industry, with the &#34;ten-yuan store&#34; Miniso acquiring the well-established Yonghui Superstores, putting Ye Guofu in the spotlight.
On October 29th, during an online speech, Ye Guofu once again responded to many doubts about the acquisition of Yonghui. He said, &#34;From the optional consumption of Miniso to the essential consumption of Yonghui, without bold attempts and innovations at every step, where does today's success come from? Without courage, where does luck come from.&#34;
Previously, he also revealed some details of the acquisition. He said it was a decision made quickly but planned for a long time.
Ten years ago, after visiting Costco, and in 2021 after visiting Pinduoduo, Ye Guofu also wanted to have a similar business carrier.
He finally found a suitable opportunity. Over the past three years, Yonghui Superstores has accumulated losses of about 8 billion, and its stock price has fallen to a nearly 12-year low, prompting discussions of a sale.
No one expected that Miniso would be the acquirer. On the day of the announcement, Miniso's US stocks fell by 17%, and the next day, its Hong Kong stocks fell by 24%.
In terms of revenue, Yonghui Superstores and Miniso are not in the same league. Although Yonghui is losing money, it still has nearly 80 billion yuan in annual revenue, while Miniso has only about 15 billion yuan.
Financially, it is also tight. Miniso, which spent 6.27 billion yuan, had a cash balance of only 6.233 billion yuan at the end of June.
However, Ye Guofu, who has a strong gambling instinct, does not see it that way. He said, &#34;It's good if everyone doesn't understand. If everyone understands, I won't have a chance.&#34;
He sees the Yonghui Superstores that have been &#34;modified&#34; by Pinduoduo.
On October 19th, the Yonghui Superstores Xilongduo store in Shijingshan, known as &#34;Beijing Pinduoduo,&#34; officially reopened after closing for &#34;learning from Pinduoduo&#34; for 29 days.
On the opening day alone, the store received about 14,000 payment flows and over 50,000 people entered the supermarket, with total sales reaching 1.7 million yuan. Despite multiple restrictions on-site, the first-day sales still exceeded six times the average daily sales before the transformation
This seems to prove that the market needs &#34;Pang Donglai&#34;, whoever can quickly provide services comparable to Pang Donglai can reap dividends.
Ye Guofu admitted that Miniso's internal management is also learning from &#34;Donglaige&#34;. For example, setting up a grievance award of 200-1000 yuan for employees; if something is damaged by customers in the store, neither the customer nor the store staff need to compensate.
With a firm acquisition of Yonghui Superstores, Ye Guofu has his own reasons. In his view, despite consumption downgrading, China still has a huge middle-class population, and consumption of essential goods will always exist.
Ye Guofu has been successful. In the past few years, he led Miniso to grow against the trend in the retail market and quickly expand overseas.
This has given him great confidence and he wants to climb even higher. After all, the business of a ten-yuan store is still too small.
<h2>The Big Gamble</h2>
Looking back on Ye Guofu's past life, drama and a gambling nature have always been in his blood.
In 2016, &#34;Guangzhou Afu&#34; took out a newspaper front page to challenge &#34;Hangzhou Lao Ma&#34;, saying, &#34;Admit defeat early, I'll help you with 1 billion!&#34;
The origin of the event dates back to 2012 when Wang Jianlin and Jack Ma made a bet on whether e-commerce could capture 50% of China's retail market in ten years, with the loser paying the other 1 billion.
Neither of the two tycoons took the bet seriously, but it was hyped up by &#34;Guangzhou Afu&#34;, who is Ye Guofu.
He challenged Jack Ma at that time, fundamentally due to his obsession with physical stores, believing that Jack Ma's &#34;new retail&#34; strategy was wrong.
In 2016, Jack Ma proposed the concept of &#34;new retail&#34;, aiming to achieve online and offline integration, known as O2O. Subsequently, Alibaba spent 22.4 billion to acquire 36.16% of Gaoxin Retail (parent company of RT-Mart), opened Hema, and in 2017 became the controlling shareholder of Intime Department Store, investing heavily in experiments.
Eight years later, with the end of the expansion of internet capital and the emergence of consumption downgrading, Jack Ma's new retail dream was overshadowed. Hema, Intime, and Gaoxin all shrunk or were sold one after another.
While e-commerce giants' foray into retail faltered, Ye Guofu flourished. His ten-yuan store Miniso made the right bet, catching the trend of consumption downgrading, like an offline version of Pinduoduo, expanding significantly and further targeting young people and a younger demographic.
In 2023, Miniso collaborated with the Japanese animation &#34;Chiikawa&#34;, causing long queues at major flagship stores. The flash store at Jing'an Joy City in Shanghai achieved a single-store sales of 2.68 million in 10 hours.
On October 29, Miniso's Executive Vice President and Chief Product Officer Dou Na revealed that Miniso has reached diversified cooperation with over 150 globally renowned IPs, with cumulative sales of over 800 million IP products.
As of the end of the second quarter of this year, Miniso (including TOP TOY) has a total of over 7,000 global stores. In the first half of this year, Miniso achieved revenue of 7.759 billion yuan, a year-on-year increase of 25.0%
For the future, Ye Guofu is also full of confidence. He stated that Miniso aims to become the world's number one IP design group; in the next ten years, he plans to lead 100 Chinese brands to go global.
While the offline-focused Miniso is still growing rapidly, e-commerce giants have long been struggling, with even this year's Double Eleven lacking momentum.
In the era where giants are disappearing, Ye Guofu's acquisition of Yonghui appears particularly eye-catching.
The bet between Wang Jianlin and Jack Ma has long been obscured by dust. Ye Guofu did not bet with Jack Ma, but now everyone says he has won against the old horse.
However, after taking over Yonghui Superstores, Ye Guofu will need to tell a story that is completely different from the &#34;ten-yuan store&#34;. Whether Yonghui, which Tencent and JD have not been able to revitalize, can be rejuvenated in Ye Guofu's hands remains a big unknown.
This is also a new gamble that Ye Guofu has embarked on with himself and the backers behind him.
Over the past 8 years, the retail market has been turbulent, with business giants rising and falling, and the lives of Jack Ma and Ye Guofu have taken different paths.
And on this vast land of China, a new business war has already begun

601933

MNSO

09896

Ye Guofu became the largest shareholder of Yonghui Superstores through acquisition, seemingly surpassing Jack Ma in the retail sector. Despite market doubts about the acquisition of Miniso, Ye Guofu emphasized the importance of innovation and courage. Yonghui Superstores is facing losses and a decline in stock price, with the acquisition amount of Miniso being 6.27 billion yuan, but its revenue is significantly different from Yonghui Superstores

- Ye Guofu, once a challenger to Jack Ma, has become the largest shareholder of Yonghui Supermarket after acquiring 29.4% of its shares for 6.27 billion yuan.  
- Despite the challenges in the retail sector, including Yonghui's significant losses, Ye believes in the potential of essential consumer goods and aims to innovate within the market.  
- As he embarks on this ambitious acquisition, the future of Yonghui under his leadership remains uncertain, marking a new chapter in China's evolving retail landscape.

Did Ye Guofu win a game against Jack Ma?