The original author | Jolene Source | Spicy (ID: ylwanjia) On March 11, "Wallace officially announced its delisting" surged to the top of Weibo's hot search. However, this delisting process did not come with warnings or negative disclosures, nor does it mean that Wallace is going bankrupt. In the overall pressured environment, maintaining stability is already a challenge, and compared to its peers, Wallace has surprisingly been doing quite well. In 2024, Wallace's parent company, Huashi Food, achieved a revenue of 9.993 billion yuan. Before the delisting, the company's financial report for the first half of 2025 also showed that its net profit and cash flow both achieved a year-on-year growth of over 30%.

In the competitive restaurant market, Wallace has carved out its own affordable route: not a downgraded version of KFC and McDonald's, but deeply engaging with the psychological needs of customers in third and fourth-tier cities, especially students and young men, using targeted marketing strategies— it can be not high-end, not tied to face value, but it must be affordable, relatable, and fun. To become the "canteen for young men," it must become "one of their own."

In the past, people often believed that competition in the sinking market was all about price and scale. Mixue Ice City has already proven that consumers can be more forgiving of brands due to affordability, but brands on the affordable route also need their own brand-building methods, which have become increasingly important in the trend of consumption downgrade: while the average spending that customers are willing to pay may have decreased, the demand for emotional consumption has not diminished.

Wallace's main marketing activities from 2025 to February 2026

Image source: Spicy

Wallace has successfully found its position. Even with a "black-red" image, Wallace has cultivated its loyal audience, ultimately joining the club of ten thousand stores and surviving.

After this retreat and restructuring, can Wallace create its own "Huamen" in county towns and become the "Mixue Ice City of hamburgers"?

From "Knockoff" to Invisible Champion in County Towns, How Wallace Turns "Black-Red" into Red

Wallace's first store was established next to Fuzhou Normal University, which set the tone for the brand: the core user group is students, whose average spending may not be high, but they often consume frequently; they may not demand unique flavors, but they certainly want large portions.

Therefore, while most township brands aim to cover different audiences by offering dishes like rice bowls and other Chinese-style simple meals, Wallace insists on positioning itself as "affordable fried chicken and hamburgers for young customers," with a menu that can be described as extremely simple: fried chicken, roasted chicken, hamburgers, and snacks. Snacks and drinks provide novelty, while the three main food items have simple flavors, rarely using new ingredients or cooking methods, ensuring stable and predictable tastes, with few surprises and minimal errors.

Unlike KFC and McDonald's, which constantly innovate ingredients and flavors in their hamburger offerings while promoting trendy lifestyles, Wallace's simple menu allows consumers to quickly make decisions to fill their stomachs, and the reliable flavors help cultivate repeat consumption habits. Local stores can thus reduce training and material costs, maintain low prices, and secure larger meal packages within the same budget At the same time, a vertically organized menu also facilitates the formation of brand memory points. For students at the time, Wallace meant "eating popular fried chicken cheaply," and competitors instantly became KFC and McDonald's, which also focused on the fried chicken category, rather than directly clashing with cheaper stir-fried dishes.

This series of operations allowed Wallace to gain its first generation of fan base. To this day, those students from back then continue to engage in "nostalgia consumption."

Like many peers, Wallace was labeled as a "knockoff" from the very beginning. However, by now, people no longer see it merely as a low-price market imitator: while KFC continuously "harvests" the ACG (Anime, Comic, and Games) market through vertical IP collaborations and McDonald's positions itself as an emotional haven for workers, the less "trendy" Wallace confidently follows a high-frequency daily consumption route akin to "Sha County Snacks" with its minimalist SKU: no novel categories, just pure oil fragrance.

From the initial "123 promotion" of cola for 1 yuan, chicken leg for 2 yuan, and hamburger for 3 yuan, to the current 9.9 yuan for 3 burgers, today, without the need for complex coupon collection and minimum spending, people can still enjoy a single meal set of 3-5 items at Wallace for just over ten yuan. Wallace and KFC, McDonald's have ultimately differentiated themselves in positioning, which has also subtly weakened the "knockoff" issue.

Similar to Mixue Bingcheng, "cheap" has also provided the brand with a certain margin for error: when prices generally rise, KFC and McDonald's have sunk to "poor people's meal sets" and then collectively raised prices again, while Tasting, which positions itself as slightly more upscale than Wallace, has also fallen into price increases and food safety issues. Meanwhile, Wallace, which consistently maintains a per capita cost of under 20 yuan for a full meal, has survived another round of survival battles and stabilized its dominance in the sinking market.

However, compared to the stable quality control of Mixue Bingcheng, Wallace's food safety issues are much more severe. The extremely low-threshold partner model has allowed Wallace to expand rapidly in towns across the country, but many unregulated stores have been reported for issues such as reusing oil, foreign objects in food, expired ingredients, and fake health certificates. On the internet, the experience of "jetting" and "running loose" has almost become an indelible label for Wallace.

However, the supposedly fatal safety issues have not plunged Wallace into crisis; instead, it has become a case of "black and red is still red"—the overly dramatic "Wallace Jetting Warrior" has become a hot meme on multiple platforms like Bilibili, Zhihu, and Hupu. Skeptical netizens have tested it out, even controlling variables for repeated consumption, summarizing a "Wallace Jetting Probability Table."

Currently, explanations online generally fall into two categories: one believes that cold drinks and fried foods inherently burden the stomach, essentially because Wallace is too cheap, leading people to consume more fried foods at the same price. The other attributes the reason to "the conscience of the store manager"—more people are willing to share their experiences at clean stores rather than avoid risks. Regardless of whether there is any involvement from the brand in the entertainment of "jetting," in the context of consumption downgrade, the formation of hot memes has instead given more people who previously had concerns a reason to try ordering from Wallace: if they don't get hit, it's a bargain; even if they are unlucky, they gain another harmless topic of conversation

Not Just Competing on Price: The Overlooked Marketing Expert

Fried chicken and hamburgers have a wide audience, stable demand, and low operational thresholds. Over the past thirty years, numerous budget chain brands and self-owned stores have emerged in China, with Wallace being a rare brand that has formed its own identity and can expand and sustain itself nationwide.

In the past, few people mentioned the marketing capabilities of budget brands. The discussion of "from white label to brand" has only emerged in recent years. In fact, Wallace's survival in this red ocean is not solely due to its low prices and sentimental appeal. This brand possesses comprehensive marketing capabilities that many tend to overlook.

Currently, Wallace has 480,000 followers on Weibo, which, although lower than trendier peers like Tastin, does not fall short in terms of interaction. In recent years, it has not missed out on popular marketing strategies in the restaurant industry, such as IP collaborations and endorsements.

Image source: Wallace Official Weibo

At the end of 2024, Wallace released a post soliciting "Childhood Memory Collaborations," receiving over 700 comments on Xiaohongshu, with many nominations successfully landing in 2025. Analyzing Wallace's major marketing activities since 2025 reveals that "Childhood Memories" centered around domestic IP, especially classic domestic animation and film, has indeed become the focus of Wallace's collaborative marketing.

From the spinning top competition animation "Hurricane Battle Soul," to the domestic special effects drama "Armor Warrior," and to classic CCTV dramas like "Big Head Son" and "Wulin Waizhuan," these IPs may not have highly active fan communities like the niche anime IPs frequently collaborated with by Pizza Hut, but they possess high recognition, falling between niche IP and general IP, with relatively lenient consumer demands for related materials and operational capabilities. Additionally, the licensing fees for these IPs are relatively low, and the freedom is greater than that of hotter IPs, allowing Wallace's planning and development operations to be more flexible.

In the summary of its collaborations in 2025, Wallace categorized its collaborative merchandise into three directions: exquisite collectibles, abstract meme creation, and fan-inspired designs. The official account often encourages fans to create abstract videos using the merchandise: a puff printed with the spokesperson's big head can be used to "kiss" on the face, a squished sad frog toy can be filmed for "Boss and Me," and fan suggestions have led to the creation of plush pink hamburgers and white peach beer dolls that can be "taken for a ride" on toy electric cars pretending to enjoy the outdoors... Although the IPs are not expensive, the planning and development are indeed "making the most of what they have." While Wallace may not compete with other higher-priced brands that invest more in craftsmanship and design in the exquisite collectibles category, the abstract and responsive approach is a kind of "lightweight flow password."

Image source: Wallace Official Xiaohongshu People generally believe that female consumers are more willing to collect co-branded products. However, Wallace's marketing has not overlooked young men: Wallace has built a stable reputation on male-dominated platforms like Hupu and NGA, not only through cost-effectiveness but also by conducting a large number of "meme-making" marketing activities targeting this group.

In addition to the previously mentioned collaboration with Sad Frog themed around abstract madness, Wallace unexpectedly announced Ding Zhen as the brand's Sunshine Ambassador this year and launched a series of spring limited edition products. Although the reputation of this brand ambassador among male consumers is hard to assess, the trending topics and discussions are abundant, and many entertainment-seekers are willing to pay for it and post reviews.

In fact, Wallace's operational strategy is quite cautious: while selecting memes is at the forefront of traffic and public opinion, they are almost always just lightly pushed, allowing the fast-paced audience to complete and spread the memes themselves. The brand has never been caught off guard and has hardly triggered strong negative public opinion due to inappropriate content output. In the collaboration with Ding Zhen, Wallace simply filled the regular packages with exquisite little cards after the official announcement, but male consumers still discovered new memes to spread: is the "Chuanxi Package" really playing with Wallace's "sparse" meme? There is no evidence, but both fun and traffic have been generated. Wallace's co-branding marketing that appeals to both genders and is versatile does not stop here. This year, Wallace reached an annual strategic cooperation with Hero Esports and KPL, while collaborating with several KPL star esports players as "Brand Esports Honor Ambassadors." Wallace is not satisfied with simply covering the conventional consumption scenario of male consumers ordering fried chicken while watching games; they have also incorporated the "King Fan," which originated from entertainment industry support, into their peripheral product sets: many female fans customize large support fans themed around characters before major events, personally sticking rhinestones and handmade decorations on the blank parts. Since the fans have a diameter of over 30 cm, the finished product usually contains tens of thousands of small rhinestones, which is quite labor-intensive and eye-catching, regarded as a classic "powering love" support item. Wallace not only actively provides production tips but also collects a large number of female fans' transformation "works" through their official account, amplifying the voice of ordinary event sponsorship activities.

5 Yuan Coffee and 3 Yuan Desserts, How Far is Wallace from "Huamen" with Billions in Revenue?

As mentioned earlier, Wallace's performance on the TO C end is relatively stable and unique. However, the company's main profit channel comes from the TO B end: through its own warehousing and logistics system, Wallace leverages economies of scale and centralized procurement to lower costs, with the profit in financial reports mainly coming from providing food raw materials and processing equipment.

From 2022 to 2024, Wallace's parent company, Huashi Foods, has maintained a stable growth momentum in revenue, reaching 9.993 billion yuan in 2024. Huashi Foods' semi-annual report for 2025 shows that in the first half of 2025, the company's operating revenue exceeded 4.6 billion yuan, slightly down by 0.49% year-on-year, but the net profit attributable to the parent company reached 120 million yuan, with a growth rate of over 30% during the same period. In terms of gross margin, the data for the same period from 2022 to 2024 were 3.75%, 4.51%, and 5.13%, with this year's growth reaching 6.04% In terms of subsidiaries that directly engage with consumers and operate food businesses, most of Wallace's regional subsidiaries have achieved profitability, but the net profit margins are generally low, mainly ranging from 0.5% to 5.5%. Among them, Shanghai Wallace has the largest food business scale, with revenue exceeding 880 million and a net profit margin of about 1.98%.

Regarding the delisting, Wallace's official explanation is "to optimize operational decision-making efficiency and reduce operating costs." Currently, the equity of Wallace Foods is highly concentrated in the Huaiyu family, holding a total of 64%, and the influence of the family-centered decision-making model is deeply rooted. This provided relatively quick judgment and decision-making efficiency during Wallace's early expansion, but has become a constraint in the capital market, which requires regulatory transparency and high compliance.

In addition, the withdrawal from the New Third Board also involves considerations of cost and benefits. During its listing on the New Third Board, Wallace Foods hardly engaged in large-scale equity financing; the funds for expansion mainly came from employee shareholding, self-operating accumulation, and debt. The company may believe that the limited liquidity of the New Third Board makes it difficult for Wallace to further finance through this market, while still having to bear compliance costs such as auditing and information disclosure, making it an unprofitable deal.

Detailed annual report data shows that Wallace cut 20 million in advertising expenses during the reporting period, while management expenses increased by over 7 million, used for improving organizational structure and management levels. Reports indicate that Wallace's stores have decreased from a peak of 20,065 to 19,571, with a continuing downward trend. The scale expansion phase of Wallace has temporarily come to an end, relying on its overwhelming store advantage for "stock optimization," closing inefficient stores, and strengthening control.

The once minimalist menu that supported Wallace's rapid expansion is also frequently being expanded. Recently, Wallace has been continuously launching new products in high-profit and high-tolerance categories such as desserts and beverages, providing higher-priced consumption scenarios: for example, the French puff chocolate pie was priced at 6.9 yuan for 2 pieces during the launch period, but the regular price was set at 12 yuan.

By the end of 2024, Kudi announced a partnership with Wallace to establish "in-store shops" within Wallace stores. A year later, Kudi withdrew from the 9.9 price point, while Wallace confirmed the consumption scenario for low-priced coffee, successfully stealing the market: Wallace launched WA coffee, claiming a monthly subscription of 9.9 yuan, with a single cup costing less than five cents. The monthly card requires consumers to place orders near the store and pick them up in-store, not only to attract foot traffic for conversion at low prices but also to further strengthen its dominance in the low-price segment, covering all possible consumer demands in this market. Image source: Wallace official Xiaohongshu

Overall, Wallace's subsequent route is very clear: on one hand, continue to enhance the profitability of its B2B business, and on the other hand, improve the overall brand quality through store restructuring, SKU optimization, and marketing strategies, while developing emotional value increments as much as possible within a limited budget "Shanzhai KFC," "the Mixue Ice City of the hamburger world"... these joking names actually represent the vision that Wallace wants to capture: KFC is a wealthy IP collaboration expert in the fast-food industry, "McDonald's" is an emotional support for workers, while Snow King symbolizes profits in the sinking market. Wallace's ideal may be to combine these elements and become the "Huamen" of county towns.

Wallace's marketing ability may be in place, but the food safety issues at various stores that are out of control will always be a ticking time bomb for the brand. Nowadays, the claims of "spraying" have become untraceable in the frenzy of memes, but more tangible issues like health certificate forgery and foreign objects found in food cannot be avoided.

To elevate to "Huamen," Wallace must complete the shortest board in the barrel—after all, whether in towns or cities, which worker doesn't hope for an affordable and trendy canteen?

This article is reproduced from Spicy (ID: ylwanjia) with authorization. All rights belong to Spicy, and translation or reproduction without permission is prohibited.

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