China’s Retail Shuffle： Supergiants lost a total of 4.9 billion a year. Why？ Behind the end of retail myth

Gaoxin Retail, the parent company of this well-known retail enterprise, recently released the financial year 2024 performance report, which shows that the company is facing enormous challenges. In the fiscal year ending March 31, although the revenue reached 72.567 billion yuan, it decreased by 13.3% year-on-year. What is more striking is that the net profit returned to the mother recorded a huge loss of 1.668 billion yuan. RT Mart, as a star brand of Gaoxin Retail, had a brilliant retail legend in its development. Since landing in China in 1997, it took only 12 years to reach the peak of the retail industry in mainland China, and won wide acclaim from consumers with the record of not closing a store for 19 consecutive years. However, times have changed, and Gaoxin Retail pointed out in the performance warning that factors such as store losses, asset impairment and goodwill impairment, together with changes in customer consumption habits, have led to the current predicament. According to statistics, since the beginning of 2023, at least 13 RT Mart stores have closed for various reasons.

In the face of difficulties, Gaoxin retail executives did not flinch. Chairman Huang Mingduan stressed that the company’s primary task is to increase revenue and reduce costs, turn losses into profits, adhere to the essence of retail, and return to the original intention of creating value for customers. The joining of the new executive director and CEO, Shen Hui, indicates that the company is actively adjusting its strategy and rebuilding market confidence, with the goal of making RT Mart regain its growth momentum.

Looking back, since it was acquired by Alibaba in 2017, the performance of Gaoxin Retail has fluctuated significantly, especially in the context of the impact of e-commerce and the rapid evolution of retail formats, the traditional hypermarket model in RT Mart has encountered severe challenges. Although Alibaba helped its online transformation, the effect did not meet expectations, which aggravated the financial pressure. At present, RT Mart is seeking a breakthrough in transformation through innovation of business format, renovation of stores and strengthening of online services.

The whole retail industry is also actively exploring ways to change, including developing discount formats, improving shopping experience, deepening community management and accelerating digital transformation to cope with the cold winter of the market. Yonghui Supermarket, Box Horse Fresh Life, CR Vanguard and other enterprises have adopted different strategies to show the self-help and innovation of industry giants.

Although the road ahead is still full of challenges, the resilience and innovative spirit of retail enterprises indicates that the industry is expected to usher in a turning point in constant adaptation and change.