Core Insights - The article discusses the challenges faced by the discount retail chain "Good Sale," which initially thrived on selling near-expiry products but is now experiencing stagnation in store growth and revenue growth slowdown [4][5]. Group 1: Business Model and Growth - Good Sale was founded in April 2020, leveraging a "near-expiry discount" model to attract consumers with low prices, achieving a valuation of $1 billion within three years [4]. - As of April 2023, Good Sale had over 500 stores across 32 cities, transitioning to a franchise model that nearly doubled its store count within a year [4]. - Revenue exceeded 3.6 billion yuan in 2023, with a year-on-year growth of over 50%, but growth slowed to around 33% in 2024 [5]. Group 2: Supply Chain and Inventory Issues - The "soft discount" model relies on the availability of near-expiry goods, but supply chain instability poses a significant challenge for sustained expansion [5]. - The reduction in available near-expiry products has led to a decrease in Good Sale's price advantage, with the proportion of such products dropping below 30% in 2023 [7]. Group 3: Quality Control and Regulatory Challenges - Good Sale has faced multiple quality control issues, including selling expired products, leading to seven administrative penalties for selling expired food [6]. - Reports of counterfeit products and quality complaints have surfaced, raising concerns about the company's procurement processes [6]. Group 4: Competitive Landscape - The discount snack market is becoming increasingly competitive, with major players like "Nanshen Mang" and "Beiman Chen" expanding rapidly, while traditional retail giants are also entering the hard discount space [7][8]. - Good Sale's reliance on first-tier cities for store locations has become a disadvantage as rental advantages diminish post-pandemic [8]. Group 5: Diversification Efforts - To counteract supply instability, Good Sale is diversifying its product offerings, increasing the share of beauty and personal care products from 10% to 14% between 2020 and 2024 [9]. - The introduction of trendy products like figurines and blind boxes has not significantly impacted sales, and the expansion into clothing and luxury goods faces supply chain complexities [10]. Group 6: Market Expansion Challenges - Good Sale's expansion into lower-tier markets is hindered by rising logistics costs and differing consumer demand compared to first-tier cities [11]. - The competitive environment in third and fourth-tier cities is also becoming saturated, affecting Good Sale's growth potential [11].