After 100,000 Guoquan stores: Doing wholesale in townships, cooking in communities

Listed for more than two years, Guoquan is now demonstrating new growth potential. In 2025, Guoquan achieved a revenue of 7.81 billion yuan, up 20.7% year-on-year, setting a new historical high. Core operating profit, excluding investment impact, reached 461 million yuan in 2025, with an actual growth of 48.2% year-on-year. Driven by scale advantages and expense control, Guoquan's core operating profit margin climbed to a historic high of 5.9% in 2025. Reviewing its development path, Guoquan initially expanded through terminal stores, then re-integrated its supply chain, gradually building a commercial closed loop from factories to stores to consumers. In recent years, as the proportion of self-owned production capacity has continued to rise, this "manufacturing retail" model is increasingly unleashing cost advantages. However, hotpot is inherently a low-frequency business, and with its store count already exceeding ten thousand, Guoquan's store numbers hovered near the ten-thousand mark over the past two years. Now, with the restart of expansion and the "second ten thousand stores" goal proposed, the company has shifted from simple store expansion to penetration of more complex scenarios. Xinfeng recently learned from Guoquan that various formats such as large stores and camping are expected to see rapid development in 2026, and internally regarded as having ten-thousand-store potential, "Guoquan Stir-Fry" may also officially be rolled out. Multiple challenges from scenario expansion, demand insight, and supply chain coordination may arrive together in the era of the second ten thousand stores. Channel Increments 2025 was Guoquan's first full fiscal year reinitiating expansion after the "dormancy" adjustment, with a net increase of 1,416 stores throughout the year, reversing the previous contraction. Notably, over 800 stores were added in net terms during the three months of Q4 alone, surpassing the sum of the first three quarters, marking a return to accelerated expansion. Unlike its early aggressive flag-planting in tier-one and tier-two cities, this round of new stores unanimously targeted lower-tier markets. In 2025, Guoquan had a net increase of 1,004 township stores, bringing the total number of township stores to 3,010, accounting for more than a quarter of all stores. This is not just to avoid intense competition in high-tier cities, but also because Guoquan's model is compatible with the supply shortcomings in townships. Compared to tier-one and tier-two cities, township markets have long relied on agricultural trade systems with fragmented and unstable food supply. Guoquan’s production and sales system centered on cold chain distribution and standardized SKUs makes it easier to establish an edge in supply-deficient areas. Huatai Securities estimates that Guoquan’s initial investment for a township store is about 150,000–200,000 yuan, with a payback period of about 1.5 to 2 years. Single-store operating profit margins and ROE are both higher than in high-tier cities, and superior to franchise models like bulk snack stores. Larger township store areas can accommodate more SKUs and large package products, enabling Guoquan, originally operating only in the consumer (C-end) segment, to conveniently develop "wholesale" business for small merchants (B-end) in townships. In 2025, Guoquan’s revenue from "other sales channels" dominated by B-end sales reached 1.417 billion yuan, up 63.4% year-on-year. The proportion of such revenue rose from 13.4% to 18.2%, and stores increasingly serve as both retail and distribution nodes. Besides adding new stores, efficiency improvements in existing stores were also an important driver of Guoquan's performance improvement in 2025. With intensified competition in instant retail, Guoquan launched 99 yuan ox tripe combo and 99 yuan hotpot meat combo since the second half of 2024, leveraging online customer acquisition to drive offline fulfillment. In 2025, Guoquan was exposed over 9.41 billion times on Douyin, helping stores achieve GMV of 1.49 billion yuan, up 75.3% year-on-year. By the end of 2025, Guoquan’s registered membership reached 64.9 million, up 57.1% year-on-year; prepaid card stored value reached about 1.2 billion yuan, up 22.3%. At the same time, the company continued promoting digital and unmanned transformation of stores. In 2025, Guoquan smartly upgraded over 3,000 stores, making some stores “micro-hubs” with warehousing, distribution, and fulfillment functions suitable for instant retail. Adjustments to channel and product structure exerted some pressure on gross margin; in 2025, Guoquan’s composite gross margin dropped 0.3 percentage points year-on-year to 21.6%. Yet under scale effects and expense controls, core operating profit margin rose to a historic high of 5.9%, with profit growth outpacing revenue growth. Looking ahead to 2026, the company expects total store count to exceed 14,500 (net increase over 2,900), store closure rate kept below 4%; single-store operational efficiency may achieve high single-digit growth, membership scale will surpass 95 million, and core operating profit is expected to grow faster than revenue. Combating Low Frequency Guoquan’s early development logic was distinctively vertical: using "hotpot ingredient supermarket" as the entry point, it precisely captured the home consumption boom, enabling rapid expansion. The scale of ten thousand stores established Guoquan's industry position but also revealed the ceiling for single-mode growth. Intrinsic low frequency and seasonality of hotpot further shrank the imagination space in the era of stock competition. To break through, Guoquan must transcend category limitations and pivot to the high-frequency “daily dining” scenario. Between 2023 and 2025, Guoquan added 339, 412, and 282 SKUs respectively—its shelves quietly expanded to include BBQ, drinks, frozen foods, and even breakfast items. Among them, standardized BBQ has become Guoquan’s second core category. Chairman Yang Mingchao revealed to Xinfeng in April 2025: “Of the two to three million yuan in single store sales, about 20% comes from BBQ.” After scene validation, Guoquan extended its reach outdoors, partnering with parks, scenic areas, and guesthouses to launch "Guoquan Camping" stores, offering one-stop products including hotpot, BBQ, Chinese and Western cuisine, drinks, and a full suite of outdoor cookware. But right now, Guoquan is betting heavily on the most common, highest frequency, and “smokiest” category—Chinese stir-fry. In August 2025, Guoquan invested tens of millions of yuan in intelligent kitchen provider "Xiong Miao Master" and soon launched the new brand "Guoquan Stir-Fry," entering the fast-food track with machine-cooked dishes. In 2026, the first “Guoquan Stir-Fry” store of about 60 sqm opened in Zhengzhou, Henan. The store has no dine-in or delivery; customers order via mini-program, then pick up meals in-store. Operationally, two staff can operate three to four devices—by scanning the QR code on refrigerated cabinets with pre-packed clean vegetables, the fryer will automatically execute the corresponding program. One device can finish a dish in as little as 2-3 minutes, with serving time compressed to one minute. Internally, price is seen as a core competitive advantage of Guoquan Stir-Fry. Dishes are priced at 50% of comparable traditional restaurant prices: e.g., 19.9 yuan for Chopped Pepper Fish Head, 13.9 yuan for Yu Xiang Rou Si, 9.9 yuan for Tomato Egg Stir-Fry. Xinfeng learned from sources close to Guoquan that the cost per store landing is about 200,000 yuan; 700 digital menu items out of 9,000 dishes have been transformed, and 50 items have completed testing. Currently, Guoquan does not plan to install stir-fry machines in existing stores, but views "Guoquan Food Hub" and "Guoquan Stir-Fry" as two complementary brand dimensions. Manufacturing Retail Chairman Yang Mingchao once explained the company’s positioning to Xinfeng: “We are a community dining retail enterprise, identical to others selling hotpot and BBQ, except Guoquan sells to communities through offline stores, and via third parties sells on Douyin.” He also noted, such a model can only be born in China, where dense communities and population exist. The reason is that the low-price, high-turnover model relies not only on visible store expansion, but also on the hidden supply chain integration. In 2019, Guoquan helped incubate "Huading Cold Chain Technology" to build integrated warehousing and distribution capabilities. Stable large-scale orders empowered the supply chain with pricing, and provided the underlying foundation for cold chain operation. In 2022, Guoquan topped ten thousand stores; by the end of 2023, Huading Cold Chain’s GMV surpassed ten billion yuan. In July 2024, Guoquan’s controlling shareholder, Guoquan Industry, achieved 100% ownership of Huading Cold Chain. By then, Huading had established a nationwide warehousing and distribution network and digital dispatch system, ranked in the top three in China’s cold chain logistics industry, and served over 400,000 terminal points. A longtime consumer investor commented in hindsight: “Guoquan’s early expansion was indeed aggressive, but both the front-end store network and back-end supply chain capabilities were truly ‘lifted up’ as a result.” In recent years, Guoquan has continued upstream extension through self-building and investment, now owning seven food factories covering core categories such as fish balls, meatballs, seafood, and hotpot bases. “We already self-produce 20% of our products. From our first year, Guoquan has promoted all products as self-owned brands, because we calculate for supply chain efficiency and total cost leadership,” said Yang Mingchao. Even in newly tested dining stir-fry formats, Guoquan avoids high-loss fresh categories, supplying only factory-standardized semi-finished goods to franchisees. From the view of the above investor, the biggest attraction for franchisees in this retail business is “peace of mind”: “Compared to foodservice, which relies on chefs, on-site processing, and complex management, the standardized retail process is much simpler. Multi-store franchisees can replicate more easily and are more willing to follow the system’s expansion long term.” A supply chain model centered on frozen foods and semi-finished products has built specific regional advantages in the current competitive landscape. Due to infrastructure constraints, instant retail and fresh-food discount formats mainly focus on tier-one and tier-two cities; while in the north and deeper-tier markets, modern cold chain food retail still has vast penetration gaps. That’s also why Guoquan promotes large store mode upgrades—attempting to seize opportunities to become the "Sam's Club" in townships and the "Xiaoxiang Supermarket" in county towns. According to plans, Guoquan will, in 2026, upgrade 3,000 existing stores and add 3,000 new large stores—doubling store area and SKUs, aiming for full coverage of “four meals a day” scenarios, boosting customer flow and single-store efficiency. At the end of 2025, adjusted stores accounted for about 26% of current scale. However, with expansion of store area, SKU increase, and exploration of multi-scenario formats, inventory management and franchise system complexity are significantly elevated compared to the early hotpot ingredient phase. Once franchisee willingness declines or store expansion slows, upstream production capacity and cold chain utilization may also be impacted. Meanwhile, supply gaps in lower-tier markets are not static. Snack discount stores are transforming, instant retail is sinking, and supermarkets are renovating—the gaps once filled by a single channel are now turning into multi-format competition. For Guoquan, how to maintain scale expansion while ensuring the supply chain system’s fulfillment stability and cost competitiveness under high complexity will be its key challenge on the journey to its second ten thousand store goal. Risk Warning and Disclaimer The market has risks, investments should be made cautiously. This article does not constitute personal investment advice, nor does it take into account individual users’ specific investment goals, financial situations, or needs. Users should consider whether any opinions, views, or conclusions in this article are appropriate for their circumstances. Investing based on this is at your own risk.