Core Insights - Yonghui Supermarket aims to focus on its private label strategy, targeting the development of 15 major products with annual sales of 1 billion yuan each within five years [3][5]. Group 1: Private Label Strategy - Yonghui has officially announced a renewed focus on its private label products, emphasizing the need for a national brand that resonates with consumers [3][4]. - The company plans to increase the number of private label products from 60 in 2025 to 500 by 2029, with a target of achieving a penetration rate of 40% by 2029 [5][6]. - Yonghui's private label strategy includes the introduction of "Yonghui Preferred," which encompasses various product lines such as snacks, daily groceries, and personal care items [2][8]. Group 2: Major Product Strategy - Yonghui's strategy includes the development of "major products," defined as items that can generate over 10% of total store sales, with a goal of having 15 such products by 2029 [3][4]. - The company aims to learn from successful models like "Pang Donglai" to create products with over 100 million yuan in sales, focusing on high turnover rates and customer value [6][7]. - Yonghui emphasizes the importance of unique value propositions (UVP) and high-quality standards in product development, ensuring that products are both competitively priced and of superior quality [4][6]. Group 3: Supply Chain and Operational Improvements - Yonghui is transitioning its supply chain strategy from a focus on key accounts (KA) to a customer value (CA) approach, fostering long-term, transparent relationships with suppliers [5][9]. - The establishment of Zhejiang Huilian Supply Chain Co., Ltd. aims to enhance the development and operation of Yonghui's private label products, with a commitment to integrity and quality control [5][9]. - The company has already formed partnerships with 101 manufacturers and established 19 self-owned breeding bases to strengthen its supply chain [9].

Core Viewpoint - The discussion highlights the need for regulatory changes in China's retail sector to ensure fair competition between private labels and third-party brands, particularly through the introduction of a "shelf fairness ratio" indicator [1][2]. Group 1: Market Dynamics - Supermarkets prioritize their private labels on shelves due to higher profit margins, which limits the survival space for third-party brands [1][7]. - When the revenue share of private labels in fresh categories reaches 35%, supermarkets enforce differentiation requirements on third-party brands, further squeezing their market presence [1][7]. - The physical space dominance of private labels in retail environments creates a more insidious form of market unfairness compared to online platforms [1][2]. Group 2: Regulatory Environment - Current regulations, such as the Anti-Unfair Competition Law, do not specifically address shelf space allocation, leading to a lack of enforcement against unfair practices [2]. - Recommendations include setting a cap on the shelf space allocated to private labels and establishing a rapid arbitration mechanism for supplier complaints [2][7]. Group 3: Development of Private Labels - Domestic private labels are growing, driven by consumer demand for quality and health, as well as digital technology [3][4]. - The market share of private labels in China is currently between 10% and 20%, significantly lower than the over 30% share in developed markets [4][5]. - Factors contributing to the lower share include an underdeveloped supply chain and consumer skepticism regarding the quality of private labels [5][6]. Group 4: Consumer Trust and Marketing Strategies - Enhancing consumer trust in private labels can be achieved through transparent marketing, authoritative certifications, and risk-reducing return policies [6]. - Successful international strategies, such as Costco's unconditional return policy and ALDI's streamlined product offerings, can serve as models for Chinese retailers [6][8]. Group 5: Competitive Landscape - The promotion of private labels can lead to a disadvantage for third-party brands, as evidenced by sales declines for smaller brands when private label shelf space increases [7][9]. - Retailers often impose longer payment terms on third-party suppliers compared to their private labels, creating cash flow pressures for smaller brands [9]. Group 6: Future Outlook - The development of private labels in China may evolve into a dual-track system, with higher shares in first-tier cities and traditional brands dominating in lower-tier cities [10]. - If supply chain maturity improves, leading retailers could see private label revenue share exceed 40% in the long term [10].