Analysis Report on Qian Dama's Daily Clearance Model and Business Sustainability

Based on the information collected above, I now present to you the

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Qian Dama is a leading community fresh food chain enterprise in China, famous for its “no overnight meat” and unique “daily clearance model” [1]. Founded in Dongguan in April 2012, the company achieved rapid expansion after launching its franchise program in 2014, reaching a historical peak of 3,700 stores in February 2021 [2]. As of September 30, 2025, the company operates 2,938 stores nationwide (including 2,898 franchise stores and 40 self-operated stores). In 2024, it recorded operating revenue of RMB 11.788 billion and GMV of RMB 14.8 billion, ranking first in GMV in the community fresh food industry for five consecutive years [1][3].

On January 12, 2026, Qian Dama officially submitted a prospectus to the Hong Kong Stock Exchange (HKEX) to initiate its listing process, with CICC and ABC International serving as joint sponsors [3]. This milestone marks the company’s entry into a new development phase, while also subjecting its business model to strict scrutiny from the capital market.

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Qian Dama’s daily clearance model is the source of its core competitiveness, with the following specific mechanisms [2][4]:

• Scheduled Discount Mechanism
  : Starts offering a 10% discount at 7 PM, increasing the discount by an additional 10% every half hour until all remaining products are given away for free at 11:30 PM
• Zero Inventory Commitment
  : Ensures all fresh products are cleared on the same day, with no overnight products sold
• Supply Chain Support
  : Relies on a logistics system with 16 integrated warehouses, over 120 logistics partners, and more than 800 cold chain trucks in daily operation

From a positive perspective, the daily clearance model addresses the core pain point of the fresh food retail industry:

[2]:

Indicator	Qian Dama	Industry Average
Fresh Product Turnover Time	≤12 hours	2-4 days
Loss Rate	Extremely Low	Relatively High
Sales per Square Meter	Approximately RMB 14,000/store/day	About 6x that of supermarkets, 3x that of convenience stores

This high-turnover model has enabled Qian Dama to build a strong competitive barrier in the South China market, with its GMV in South China reaching 2.8 times that of the second-place player in the region [3].

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According to the exposure by CCTV Finance in September 2021 and subsequent investigations, the loss issues of Qian Dama’s franchisees mainly stem from the following mechanism flaws [4][5]:

1. Pricing System Restrictions
   : Qian Dama categorizes stores into four tiers based on the average foot traffic during non-discount hours each month, with each tier subject to a maximum pricing limit [4]
2. Aggressive Discount Mechanism
   : Consumers have developed the habit of waiting specifically for discount periods to make purchases, reducing foot traffic during regular hours
3. Cost Transfer Conflict
   : The brand mandates a minimum daily purchase volume and strict price control, leading franchisees to offer discounts at all costs to attract foot traffic in order to upgrade their pricing tier
4. Loss Bearer
   : When franchisees communicate loss issues with the brand, they receive the response that “franchisees bear losses on their own” [4]

Data Dimension	Specific Information
Typical Loss Case	Some franchisees reported annual losses of over RMB 500,000 [4]
Store Closure Scale	After the issue was exposed in 2021, a large number of franchisees closed their stores, reducing the total number of stores from 3,700 to over 2,900 [2]
Initial Investment	Minimum threshold of RMB 236,800 + RMB 70,000 franchise fee + 13 paid services ≈ RMB 306,800 [4]
Brand’s Capital Precipitation	Based on 3,000 stores, the brand has precipitated approximately RMB 900 million just from initial fees [4]

In response to the CCTV exposure, Qian Dama issued an emergency statement in the early morning of September 2, 2021 [4][5]:

“The situation of ‘franchisee poor operation’ mentioned in the report is not a common phenomenon. For a newly opened store, the first 3-6 months are usually referred to as the ‘ramp-up period’, during which the company and franchisees jointly cultivate the market, and each store is provided with support ranging from tens of thousands to over 100,000 RMB; according to recent data, the profitability rate of stores that have passed the ramp-up period exceeds 90% in South China and over 80% in other regions.”

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According to prospectus data, Qian Dama’s financial performance in recent years is as follows [1][2][3]:

Financial Indicator	2023	2024	First 9 Months of 2025
Operating Revenue (RMB 100 million)	117.44	117.88	83.59
Gross Profit Margin (%)	9.8	10.2	11.3
Net Profit (RMB 100 million)	1.69	2.88	-2.88 (book value)
Adjusted Net Profit (RMB 100 million)	1.16	1.93	2.15
Number of Stores	2,891	2,938	2,938

1. Highly Concentrated Revenue Structure
   : 97% of revenue comes from product sales to franchisees [2]
2. Gross Profit Margin Significantly Lower than Peers
   : The 10-11% gross profit margin is much lower than that of Hema (20-30%) and Pupu/Dingdong Fresh (15-20%) [2]
3. Adjusted Net Profit Margin
   : Approximately 2.6% in the first 9 months of 2025 [3]
4. Reason for Book Loss in 2025
   : Mainly caused by non-operating factors such as changes in the fair value of convertible redeemable preferred shares [1]

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• Leading Supply Chain Efficiency
  : 12-hour turnover, far lower than the industry average, supports the operation of the daily clearance model [2]
• Strong Brand Recognition
  : The “no overnight meat” positioning has established strong consumer awareness in the South China market
• Significant Scale Effect
  : Ranked first in the industry in GMV for five consecutive years, reaching RMB 14.8 billion in 2024 [3]
• Outstanding Sales per Square Meter
  : Daily sales of approximately RMB 14,000 per store, 6x that of the supermarket industry and 3x that of convenience stores [3]

• Excessively Low Gross Profit Margin
  : The 10-11% gross profit margin limits profit margins [2]
• Excessive Regional Concentration
  : 69% of stores are concentrated in South China, making cross-regional replication difficult [2]
• Rigid Consumer Habits
  : The discount mechanism leads consumers to wait for discount periods, affecting full-price sales [4]
• Franchisee Interest Conflicts
  : The headquarters profits from product sales and franchise fees, while franchisees bear the main operational risks [4]

• Market Scale Growth
  : The community fresh food track reached a scale of RMB 1.7 trillion in 2024, with an expected compound annual growth rate of 15.5% over the next five years [3]
• IPO Financing Support
  : After listing, the company can obtain funds to expand its store network and supply chain capabilities [3]
• Product Structure Upgrade
  : Expand into high-margin refrigerated processed foods and private labels [2]

• Intensified Competition
  : Players such as Hema, Pupu, Dingdong Fresh, and Duoduo Maicai continue to expand their efforts [6]
• Impact of Instant Retail
  : Platforms such as Meituan, JD.com, and Taobao Flash Purchase divert demand with their “30-minute delivery” services [6]
• Industry Restructuring
  : Meituan Optimal Selection and Taocaicai have successively scaled back, leading to drastic changes in the community group buying landscape [6]

Dimension	Current Status	Dilemma
Growth Logic	Relies on store expansion	High-quality locations are scarce, single-store growth is sluggish
Franchisee Willingness	Relies on single-store profitability	Rigid consumer discount habits limit profitability
Regional Expansion	South China market is saturated	“Acclimatization” challenges in northern markets, with all Beijing stores closed
Gross Profit Margin	10-11%	Lower than peers, compressing profit margins

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In 2025, the fresh food e-commerce and community group buying industry entered the “quality improvement and efficiency enhancement” phase, with competition shifting from traffic subsidies to supply chain efficiency and sustainable profitability [6]. Key changes include:

• Meituan Optimal Selection Shut Down
  : Officially announced the nationwide shutdown of its community group buying business in December 2025 [6]
• Taocaicai Exit
  : Replaced by a home delivery model on March 25, exiting the community group buying market [6]
• Duoduo Maicai Dominant
  : GMV approached RMB 300 billion in 2025, becoming the only national giant [6]

Enterprise	Business Model	Gross Profit Margin	2024 GMV	Profitability Status
Qian Dama	Community Fresh Food Store	10-11%	RMB 14.8 billion	Slight Profit
Hema	New Retail Supermarket	20-30%	Approximately RMB 60 billion	Near Profitability
Pupu	Front Warehouse	15-20%	Approximately RMB 20 billion	Regional Profitability
Dingdong Fresh	Front Warehouse	15-20%	Approximately RMB 25 billion	Near Profitability
Duoduo Maicai	Community Group Buying	10-15%	Approximately RMB 300 billion	Profitable

Qian Dama does not have an advantage in terms of gross profit margin or GMV, but its differentiated positioning as a community fresh food store gives it a regional advantage in the South China market.

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Assessment Dimension	Conclusion
South China Market	The model has been validated, the profit model is sustainable, and competitive barriers are solid
Cross-Regional Expansion	Significant difficulty, with “acclimatization” challenges in northern markets proving that model replication is challenging
Profit Margin	The 10-12% gross profit margin belongs to the “hard-earned money” model, with limited but stable profits
Franchisee Relationships	Structural conflicts exist; the interest distribution mechanism needs continuous optimization
Long-Term Growth	Relies on single-store efficiency improvement and product structure upgrade, rather than mere expansion

1. Stagnant Revenue Growth
   : Revenue remained basically flat in 2024, and fell 4.2% year-on-year in the first 9 months of 2025 [1][2]
2. High Regional Concentration
   : 69% of stores are in South China, concentrating market risks [2]
3. Gross Profit Margin Pressure
   : The low 10-11% gross profit margin limits risk resistance capabilities [2]
4. Franchise Management Challenges
   : Improper handling of franchisee loss issues may affect brand reputation [4]
5. Intensified Competition
   : Hema’s affordable community supermarkets and Elephant Supermarket continue to expand [2]

According to the prospectus, Qian Dama’s key strategic focuses for the future include [2][3]:

1. Store Network Optimization
   : Add 1,300 franchise stores, deepen presence in South China and expand to lower-tier cities
2. Supply Chain Upgrade
   : Improve procurement efficiency and upgrade the logistics capabilities of integrated warehouses
3. Product Structure Optimization
   : Develop high-margin private labels and processed foods
4. Digitalization Construction
   : Strengthen intelligent infrastructure and improve operational efficiency

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[1] Sina Finance - “Over 1,700 Franchisees Support Billion-Yuan Revenue, Qian Dama Races for HKEX Listing” (https://finance.sina.com.cn/tech/roll/2026-01-13/doc-inhheqfm8983455.shtml)

[2] 36Kr - “Qian Dama’s IPO Journey: Earning ‘Hard-Earned Money’, Lacking New Stories” (https://m.36kr.com/p/3638692361899145)

[3] Sina Finance - “Qian Dama Submits Prospectus to HKEX – Five Consecutive Years of GMV Championship in Community Fresh Food” (https://finance.sina.com.cn/jjxw/2026-01-14/doc-inhhhhqr8390999.shtml)

[4] Securities Times - “Franchisee Loses Hundreds of Thousands a Year! Qian Dama, Valued at Ten Billion Yuan, Issues Emergency Response” (https://www.stcn.com/article/detail/435414.html)

[5] CCTV Finance - September 1, 2021 exposure report on Qian Dama franchisee losses

[6] 100EC - “Review of Major Events in 2025 Fresh Food E-Commerce & Community Group Buying” (https://www.100ec.cn/detail--6655195.html)