Fat Donglai's net profit last year was 140 million, surpassing Yonghui and RT-Mart

Interface News

2024-04-24 18:14Posted on the official account of Beijing Jiemian News

Interface News Reporter | Zhao Xiaojuan

Interface News Editor | Ya Han Xiang

Yu Donglai, the founder of Fat Donglai, rarely revealed his profitability to the outside world.

On April 23, the video of Yu Donglai, the founder of Fat Donglai, was continuously spread on Weibo, in which he said that Fat Donglai originally planned to earn 20 million last year, but he did not expect to earn 140 million by the end of the year. In March 2024, the minimum income of Fat Donglai employees after deducting social security is more than 7,600 yuan, and the salary of employees is generally more than 8,000 yuan, and it will continue to rise, "It will continue to rise, because we don't dare to send too many ......"

If what he revealed is true, then such a net profit has exceeded many well-known listed companies in the retail industry.

According to Yonghui Supermarket (SH:601933) disclosure of the 2023 annual results pre-loss announcement, it is expected that the net profit attributable to the parent company in 2023 will be -1.34 billion yuan, while Yonghui's annual operating income will be at the scale level of 90 billion yuan, and the operating income of Sun Art Retail (HK:06808), the parent company of RT-Mart, will be 83.6 billion yuan and the net profit will be 109 million yuan in fiscal 2023. The net profit of Jiayue (SH:603708), a smaller retail entrepreneur in Shandong, is close to that of Fat Donglai, with an operating income of 17.7 billion yuan and a net profit of 136 million yuan in 2023.

Although Fat Donglai did not announce its 2023 operating income, at the end of last year, Yu Donglai estimated to the outside world that Fat Donglai's annual operating income was about 10 billion yuan. In this comparison, Fat Donglai's profit margin also exceeds that of Jiajiayue, and also exceeds that of Yonghui and Sun Art Retail.

Part of the growth driver of Fat Donglai's performance comes from "traffic".

To a large extent, Fat Donglai cannot be regarded as a regional retail enterprise in the full sense.

Especially after 2022, Fat Donglai was once again posted on social platforms by netizens for its services, its own brand liquor, Donglai moon cakes and other self-operated products, and with the full recovery of tourism in 2023, Fat Donglai has also become a "check-in place" for many tourists In December 2023, the Zhengzhou Airport to Xuchang Municipal Railway will start its initial operation, and the special line has four carriages, and it takes nearly three hours to sit from Zhengzhou to Xuchang.

Taking the passenger flow during the New Year's Day holiday in 2024 as an example, according to Henan Radio, the average daily passenger volume of the Zhengxu line is about 80,000 people, and more than 85% of the passengers are destined for Fat Donglai, and during the New Year's Day holiday, 7 stores in Xuchang Fat Donglai received a total of 318,000 tourists, of which 75% were foreign tourists.

In January this year, "Fat Donglai" was even written into the Henan Government Work Report for the first time, reporting that it supported the development of traffic supermarkets such as Fat Donglai, and the splashing wealth caused by this wave of traffic is still continuing.

In March 2023, customers queuing outside the Fat Donglai store. (Image source: Visual China)

The development of Fat Donglai, like most regional supermarkets in the country, is full of common factors of the general environment and the efforts of the founder. Yu Donglai was a member of the entrepreneurial wave in the 1990s, catching up with the opportunities of the times, when the booming consumption gave birth to the vigorous supermarket.

In March 1995, Yu Donglai borrowed 10,000 yuan from his brother and 4 other employees to set up 60,000 yuan to establish the "Mochizuki Lou Fat Shop", which mainly sells tobacco, alcohol, and food. In 2002, Yu Donglai set foot in the supermarket format, and the 23,000-square-meter "Fat Donglai Life Plaza" was opened, which was the largest large-scale comprehensive supermarket in Xuchang at that time.

Up to now, Fat Donglai has a total of 13 stores and 2 logistics industrial parks in Xuchang and Xinxiang.

It is better known that the modest level of profit was willing to invest in employees many years ago, and broke the year-round retail rules.

As early as 2007, Yu Donglai required the cooperative supplier to raise the salary of the promoters stationed in it to the same level as the sales staff of Fat Donglai, otherwise the cooperative relationship was terminated. In the same regional market, the labor cost of Fat Donglai is more than 30% higher than the average salary level of its peers, which directly stimulates the doubling of the labor cost of the retail industry in Xinxiang and Xuchang.

Since April 2012, Fat Donglai has also announced a rule that is difficult to implement in the retail industry - "closing stores every Tuesday for rest", with the aim of breaking the year-round practice of retail enterprises and allowing employees to get rest.

A person in the retail industry told Jiemian News that Fat Donglai is an excellent representative of private supermarkets in third- and fourth-tier cities, and their product selection ability, refined management degree, and employee quality are all at a very advanced level, but this is also inseparable from the salary and emotion invested by enterprise managers themselves in employees.

Yu Donglai. (Image source: Visual China)

In the book "The Beautiful Road" written by Yu Donglai in January 2024, he wrote that compared with Costco, Sam's, Aldi, Ito-Yokado, etc., there is a very big gap between Fat Donglai and Costco, Sam's, Aldi, Ito-Yokado, etc., but it is far better than these companies in terms of culture and system, which is reflected in the healthy development of enterprises, employee compensation and benefits, and the achievements and happiness they bring.

The high salary and generous welfare system implemented by Fat Donglai are the envy of peers. Yu Donglai revealed in the book that the salary system of Fat Donglai's employees is about 50,000 yuan per month for store managers, 40,000 yuan for store assistants, 25,000 yuan for division directors, 18,000 yuan for assistant directors, 1.2-13,000 yuan for section chiefs, and 5,500 yuan for front-line employees (cleaning, cashiers, etc.). Each employee works 40-42 hours per week and one month of paid annual leave per year.

Yu Donglai also has many classic quotes about respecting employees, for example, at the 2023 China Supermarket President Summit, Yu Donglai said, "In Fat Donglai, overtime is not good." Working overtime is depriving others of their time and taking advantage of their growth opportunities. This is unethical. ”

Fat Donglai even has a "grievance award" for employees, which is intended to encourage employees to do the right thing, and the bonus will range from 500 yuan to 5,000 yuan according to different situations.

This makes Fat Donglai a "dream emotional enterprise" for migrant workers.

However, the expansion speed of this dream emotional company is not fast, and there are not many recruitment opportunities. From 2022 onwards, Yu Dong has been sending personnel and experience to other small retail enterprises in the form of "Business School President Class" and "Supermarket President Summit" to help and play a helping role.

This kind of help not only needs manpower, but also needs financial resources, Yu Donglai disclosed at the backgammon sharing meeting on April 20 that in order to help Jiabaile, Fat Donglai spent nearly 50 million yuan in half a year, and so far we have ten people in Jiabaile, and said, "According to the current state, Jiabaile earns 10 million a year is not a problem." I suggest that all the 10 million yuan be taken out, continue to raise the wages of employees, motivate the team, and make the team willing to work. ”

The latest example is that after the former retail giant BBK in Hunan fell into a restructuring crisis, Yu Donglai and his team were asked to help rectify it. He pointed out at the sharing meeting that it may take a while for the transformation of supermarket stores, commodities, and policy changes to see results, at least half a year to a year. "At least half a year is guaranteed not to lose, there may be a profit in the second half of the year, and it will take at least three years to mature."

View original image 1.13M

• 

•