Qian Dama IPO: The "deconstructed" daily fresh model and the vanishing proximity dividends

Once regarded as the most successful example of community fresh food chain stores, Qian Dama is moving toward the capital market.

Recently, the leading community fresh food chain enterprise "Qian Dama" submitted a prospectus to the Hong Kong Stock Exchange, planning to list on the main board in Hong Kong via IPO.

As the leading Chinese community fresh food chain, Qian Dama was founded in 2012, pioneering the "discount daily clearance" sales model and is well-known for its promise of "not selling overnight meat."

During its most favored stage by capital, Qian Dama underwent a period of rapid expansion.

After completing its Series D financing in 2019, the company officially launched a nationwide strategy, with revenue rapidly growing to over 7 billion yuan. The combination of high-density store openings and a high turnover model quickly propelled it into the ranks of community fresh food chain leaders.

However, compared to the expansion phase, the company's growth pace in recent years has obviously slowed down.

From 2023 to 2024, Qian Dama's revenue basically remained at around 11.7 billion yuan, without any significant breakthrough, and income declined year-on-year in the first three quarters of 2025.

The scale of the stores has also entered a plateau period. Since the end of 2022, the total number of stores has hovered at around 2,900, with expansion nearly stagnant.

Qian Dama's changes also reflect the industry-wide path shifts in community fresh food over the past decade.

From starting out as a highly anticipated community chain, to the rise of fresh food e-commerce, front warehouses, and instant retail, the ways consumers buy produce have constantly been reshaped, and some of the demand originally concentrated in small community stores has been diverted to other business formats.

What Qian Dama may need to convince investors is: when community retail enters a stage of multiple formats coexisting, does the first-generation fresh food chain model with "daily clearance" as its core still have room for continuous expansion?

The boundaries of the “Daily Clearance” model

Qian Dama was able to rapidly expand early in the community fresh food track largely due to its unique "daily clearance model."

Daily clearance means that products delivered to the store must be sold out the same day, with discounts used to clear inventory, thereby fulfilling the promise of "not selling overnight meat."

"Daily clearance" is not an industry first, but for high-loss fresh food retail, once inventory cannot be cleared, profits are quickly eroded, which is why few chain brands can maintain it long-term.

Qian Dama's specialty lies in its evolved tiered "discount daily clearance" mechanism.

As business hours come to an end, items are gradually discounted in fixed intervals, leading consumers to a game of "waiting for a lower discount" versus "early purchase."

If you wait till the last discount or even free distribution, there’s a high chance your preferred item has already been bought by another customer. This psychological mechanism, similar to the "prisoner’s dilemma," ensures most inventory is cleared early in the evening, reducing reliance on late-night clearance.

But this mechanism also cultivates a low-price consumption habit among customers, objectively raising the requirements for operational efficiency.

To address this, Qian Dama developed a support system on two fronts.

One front is SKU simplification and standardized product selection. Compared to the thousands of SKUs at large supermarkets, Qian Dama is closer to a standardized community marketplace, lowering complexity in exchange for turnover speed.

The other front is a high-density delivery network to support frequent replenishment and rapid turnover, maintaining overall operational efficiency.

As of early 2025, Qian Dama operates 16 integrated warehouses nationwide. Most fresh products have a warehouse turnover time of less than 12 hours, and core pork products usually travel from slaughterhouse to store in only 6 to 8 hours.

Another challenge of the "daily clearance" model is execution. If franchisees intervene in the discount rhythm or stash overnight goods, the whole system fails.

To address this, the company introduced an ERP automatic discount system early on to ensure prices follow unified rules, supplemented by video surveillance and audit mechanisms, penalizing violations in real time.

Meanwhile, Qian Dama uses a data system to recommend replenishment for stores, controlling the proportion of discounted clearance within tolerable limits to reduce losses at the source.

As of the end of September 2025, the company had 2,938 stores in 14 provinces and Hong Kong/Macau, with more than 98% being franchisees.

But as the scale expands, this high-density, high-turnover dependent model faces constraints in markets outside of its home base in South China.

Replicating the supply chain in other regions is a major difficulty.

Long Zhen, founder of Jameng Data, told Xinfeng: "Qian Dama appears to be expanding nationwide, but the fresh food business is essentially about the local supply chain."

Long Zhen explained that fruit procurement can rely on a few core production regions for a national system, but vegetables lack stable core production areas, and meat depends heavily on local slaughter and distribution.

However, stores in new regions are more scattered, requiring new cold chain and warehouse distribution systems, increasing per-store supply chain costs, and making daily clearance requirements for sales and turnover stricter.

In the first three quarters of 2025, Qian Dama's gross margin in South China was 12.5%, more than double that of other regions in the mainland.

"Qian Dama couldn’t make it work in Chengdu and Shanghai. The root issue was procurement," said Long Zhen. "As a chain brand, its purchase prices couldn’t beat mom-and-pop stores next door, so it lacked cost advantage, and naturally, no one wanted to join."

Differences in consumption habits also hinder the model's replication.

Unlike South China, with its humid climate and focus on freshness, some northern and non-first-tier cities see higher household stocking rates, making it hard to form the high turnover base that daily clearance relies upon.

When foot traffic is insufficient or turnover drops, store-end operational pressures rise quickly, new cities experience longer ramp-up periods, and headquarters’ investments in site selection, delivery, and franchise management all increase, making it hard to sustain expansion speed.

From 2023 to Q3 2025, the company opened 908 new stores and closed 916, with South China stores always making up about 70%, and nationwide expansion still hasn’t succeeded.

The dissolving "near-field" dividend

If we rewind to around 2018, the community fresh food chains represented by Qian Dama were once seen as one of the most reliable directions in offline retail.

Fresh food was still one of the few categories driven mainly by offline consumption and frequent necessity, according to industry consensus back then.

Compared to large supermarkets, which are heavy on location and slow to replicate, small community stores require less investment, are more embedded in residents' living circles, and thus can build stable repeat purchase patterns; and compared to pure e-commerce, community fresh food stores can fulfill the last mile centered on storefront, balancing cost and timeliness.

Against this backdrop, community franchise chains like Qian Dama were believed that, even without unified national procurement, as long as they could achieve sufficient density in a single region, relying on high turnover and centralized distribution, they could still form a stable profit model.

From a financial perspective, there was some backing for this model.

In 2024, the company's overall gross margin was 10.2%, with product sales gross margin to franchisees and direct retail at 8.1%.

With fresh food making up a large share, this level is close to the "fresh food and processing" segment of Yonghui Superstores during its transformation.

Category-wise, pork and vegetables combined accounted for nearly half of Qian Dama's sales, meaning profits came more from turnover efficiency than high value-added products; as long as store density could continue to rise, supply chain efficiency could still be improved.

But this judgment is based on the premise that most near-field consumption demand remains handled by offline stores.

The real change in the community fresh food ecosystem isn’t just a single company’s expansion faltering, but a fundamental shift in near-field retail competitiveness in a short period.

While Qian Dama pushed nationwide expansion, much fresh food consumption shifted online under the pandemic. Instant delivery systems quickly built their infrastructure, with front warehouses, warehouse-store hybrids, and platform flash sales booming; habits that used to take years to nurture were completed early.

By around 2025, China's instant retail market neared one trillion yuan, with over 500 million monthly active users, and micro-fulfillment networks built around front and lightning warehouses reached tens of thousands in scale.

Front warehouses and platform systems offer thousands of products, use algorithms to cut loss rates and boost inventory turnover, and increase overall efficiency through fulfillment networks instead of store density.

The community fresh food model relying on regional density and high turnover hasn't entirely failed, but its market space is constantly shrinking.

Qian Dama's next-phase strategy is no longer just replicating stores, but trying to shore up gaps in supply chain, digitalization, and category structure.

Funds raised from this IPO will mainly be used for expanding store networks, enhancing supply chain capabilities, upgrading digital systems, and developing proprietary brands.

The plan for the next five years includes opening about 1,300 new franchise stores and 100 self-operated stores, building integrated warehouses and processing capabilities, increasing direct procurement and order farming/breeding ratios, and investing more in high-margin prepared dishes and cold processed food.

Additionally, the company plans to invest in or acquire fresh food retail and supply chain enterprises with regional networks or processing capabilities to accelerate entry into new markets.

It should be noted that the urgency of this IPO also comes from redemption clauses in previous financing agreements.

Qian Dama agreed with multiple rounds of investors that if listing is not completed by January 1, 2027, preferred shares will be redeemed at principal plus 8% annual compound interest, and the latest round stipulates a 15% simple interest return.

At the end of September 2025, about 1.58 billion yuan of redeemable preferred shares were counted as financial liabilities, raising the asset-liability ratio to 196.6%.

As near-field dividends fade and nationwide expansion keeps stalling, this IPO seems more like vying for the last capital window before the old model completely loses effect.

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