Pangdonglai, a retail phenomenon in the Central Chinese city of Xuchang in Henan province, has become something of a Disneyland for shoppers.
The privately owned retailer has grown beyond a supermarket chain into one of the city's biggest tourist attractions, drawing consumers, business executives from home and overseas eager to understand the secret behind its success. The interest has spawned a niche industry of retail study tours, with consulting firms regularly bringing visiting groups to experience the stores firsthand.
At Pangdonglai's flagship Angel City mall, which opened for trial operations in January 2023, around 30,000 people visit on an average day. During this summer's holiday season, daily foot traffic exceeded 100,000.
One such tour begins at the mall's gift shop before moving past its tea stores and descending by escalator into the supermarket. The first thing visitors notice is a long row of service counters, each with more than 6 to 10 people waiting. Warm orange lighting, more reminiscent of a restaurant than a grocery store, softens the atmosphere.
Beyond the counters, the supermarket remains packed even on an ordinary weekday afternoon. Freshly baked bread continuously emerges from ovens. Nearby, water tanks filled with live lobsters, crabs and shellfish line the seafood section. Shelves of Pangdonglai's own private-label products dominate the grocery aisles.
The retailer's reputation rests as much on service as on merchandise. Employees routinely walk customers directly to the products they are searching for instead of simply pointing them toward an aisle.
"On one hand, the company has very strict quality control, with fresh and healthy food products," said Wei Xiaopang, a tourist guide in Xuchang and founder of a local travel agency. "On the other hand, Pangdonglai treats customers like family while also showing genuine care for its employees."
Consumers appear to be rewarding that approach.
As of Aug 31, Pangdonglai's cumulative sales for 2026 reached 19.51 billion yuan ($2.91 billion), up 26.98 percent from a year earlier. August alone generated 2.65 billion yuan in revenue, a 33.62 percent increase from the previous year and above the company's average monthly sales in the first half.
Supermarkets remained the company's largest business, generating 10.74 billion yuan during the first eight months, accounting for more than 55 percent of total sales. Department stores contributed 2.41 billion yuan, while home appliances and jewelry each generated more than 1.8 billion yuan. Tea has also emerged as a fast-growing category, with sales reaching 938 million yuan during the period. Restaurants, pharmacies, apparel, entertainment and cinemas also made steady contributions.
The strong performance comes despite founder Yu Donglai's pledge earlier this year to slow expansion and focus on improving service quality rather than opening new stores.
Its influence now extends well beyond Henan.
Industry recognition has followed consumer enthusiasm. The China Chain Store & Franchise Association ranked Pangdonglai's supermarket business ninth nationwide in its 2026 Top 100 Supermarket ranking, based on 2025 sales of 12.64 billion yuan. So far this year, the company's total sales have already exceeded 19.5 billion yuan, with supermarkets contributing more than 10.74 billion yuan.
Yu attributes much of the company's culture to an employee profit-sharing system introduced in 2000. By distributing profits across different positions, he said, the company aims to ensure employees feel respected and trusted, encouraging initiative, creativity and a shared pursuit of what he describes as "a better and more fulfilling life."
However, for many retailers visiting Xuchang, that culture — not simply the crowds — may be Pangdonglai's most difficult competitive advantage to replicate.
