Core Viewpoint - The article discusses how Dongfang Zhenxuan managed to recover from significant losses and operational challenges following the departure of its key figure, Dong Yuhui, and explores the company's strategic shifts towards self-operated products and diversification of sales channels [2][6][20]. Financial Performance - In the first half of the 2025 fiscal year, Dongfang Zhenxuan reported a net loss of nearly 100 million yuan, a stark contrast to a net profit of 160 million yuan in the previous year when Dong Yuhui was still with the company [2][6]. - The company's gross merchandise volume (GMV), revenue, and net profit saw declines of 40%, 32.7%, and 97.5% respectively in the previous fiscal year [6]. - By the second half of the 2025 fiscal year, the company managed to turn a profit of 44.71 million yuan, indicating a recovery from the initial losses [2][14]. Stock Market Reaction - The stock price of Dongfang Zhenxuan experienced extreme volatility, with a single-day fluctuation of 20% before the annual report release in August [2][14]. - The company's market capitalization reached a peak of 40 billion yuan, comparable to major retail players like Yonghui Superstores and Dazhongdian [14]. Strategic Shifts - Following Dong Yuhui's departure, Dongfang Zhenxuan focused on expanding its self-operated product line, increasing the number of self-operated SKUs by 50% within a year [7][8]. - The company also sought to diversify its sales channels, moving beyond Douyin to platforms like Xiaohongshu and Pinduoduo, and investing in its own app to enhance customer engagement [8][20]. Market Positioning - Dongfang Zhenxuan aims to position itself as a "Chinese Sam's Club," adopting a membership model similar to that of Sam's Club, with a focus on high-quality, low-cost products [17][20]. - The company has established a membership fee of 199 yuan, with a current membership base of 264,200, although the renewal rate is only between 40% and 50% [17]. Challenges Ahead - The article highlights the difficulties faced by Dongfang Zhenxuan in replicating the success of Sam's Club, noting that the Chinese retail market is fragmented and dominated by smaller players [28]. - The company must navigate a competitive landscape where larger retailers hold significant market share, making it challenging to achieve economies of scale [28].