Yonghui Superstores’ CEO Li Guo resigned from his position and will be replaced by CTO Li Songfeng, the company announced on Thursday, in a move to improve the supermarket chain’s digital retail capabilities.
Li Guo first joined Yonghui the year it was founded in 2001 and led the company to open more than 1,000 stores throughout China. He will move on to an executive role at Fuping Yunshang Supply Chain Management. On August 5, Li Songfeng’s appointment was approved by the company’s board of directors with only one vote in opposition from JD.com’s chief strategy officer Liao Jianwen, who cited Li’s lack of retail industry and management experience. Li Songfeng joined Yonghui as CTO in January after nearly a decade in research and development at e-commerce giant JD.com.
Founded in 2001, Yonghui’s supermarket business has suffered since the entrance of internet giants like Meituan and Pinduoduo into the grocery sector in Q3 2020. While Yonghui’s annual revenue in 2020 totaled RMB 93.2 billion (USD 14.42 billion), up 9.8% year-on-year, the company’s net profit attributable to shareholders before non-recurring gains and losses was just RMB 580 million (USD 89.8 million), down 45.35% YoY. In the last year, the A-share listed company’s share price has plummeted, wiping out 56% of its market value.
With a more technology-oriented Li Songfeng at the helm, Yonghui is looking to claw back some of its lost market share in the grocery sector. As of July 2021, Yonghui counted over 100 million users through its various digital sales channels with over 75 million users on its Yonghui Life app. In May, the company began opening stores with a new warehouse format to combat the community group buying model’s of internet giants, with more than 35 such locations already in operation.
KrASIA Connection features translated and adapted content published by 36Kr. This article was originally written by Yang Yafei for 36Kr.