Baiguoyuan said it would educate consumers — the consumers taught back

Baiguoyuan listed in Hong Kong on January 16, 2023 at HK$5.60 a share — China's first listed fruit retailer, market capitalisation around HK$10.3 billion on day one. The pitch was premium: graded fruit, own-brand standards, prices above the street. At the peak at end-2023 the chain ran 6,093 stores, H1 2023 brought ¥6.294 billion of revenue and ¥261 million of profit, and chairman Yu Huicheng spoke of 'educating consumers to maturity' and of 'not pandering to consumers'. The bet was that China would keep trading up on fruit.

The bet broke. FY2024 lost ¥386 million on ¥10.273 billion of revenue; FY2025 lost another ¥317 million as revenue fell 20.4% to ¥8.174 billion. Gross profit fell 21.9% to ¥597 million; H1 2025 took the worst of it, with gross margin at a record-low 5% and a ¥350 million half-year loss before H2 steadied at 10%. 6,093 stores at end-2023, 5,127 a year later, 4,468 by end-2025 — 1,625 doors closed in two years, more than a quarter of the chain. Franchise sales, 72.3% of revenue, fell about 20% and in October 2025 a HK$325 million placement went to paying suppliers and banks.

The pivot reads as a surrender of the old positioning: Baiguoyuan now calls itself the 'expert and leader of high-quality and high-value fruit', ran 22 'good fruit gratitude' promotions in 2025 (25 million orders, over ¥500 million of sales), cut the cost of opening a franchise store from ¥280,000–300,000 to ¥230,000, and is pushing a B2B second curve (direct sales ¥1.191 billion, Shenzhen Bango platform GMV ¥2.38 billion) with 95.3 million members as the base. H2 2025 reopened stores — a net gain of 82 — and management calls 2026 the year of expansion again, aimed at tier-3 cities and below.

Repositioned from premium to value: cut franchise costs, ran 22 promotions, pushed B2B — but the ¥703M loss and 1,625 closures show the cost.

Premium positioning met a price-sensitive turn: the chairman's 'educate, don't pander' stance became the epitaph of the model when consumers stopped trading up.

Franchising amplified the fall: franchisees carried the rents, and when their confidence broke, 1,625 stores vanished in two years — taking 72.3% of revenue down about 20% with them.

The capital structure followed: the October 2025 placement of HK$325 million went to trade payables and bank loans — dilution to keep the supply chain turning.

Baiguoyuan bet that consumers would keep paying up for graded fruit, and its chairman said the market needed educating. Two loss years and 1,625 closures later, the chain repositioned to value.

What remains is a chain of 4,468 stores that has stopped shrinking: H2 2025 reopened doors (net +82), gross margin recovered to 10%, single-store traffic and gross profit grew mid-single digits, and the loss narrowed 17.8%. But revenue still fell 20.4%, and the placement bought time, not a model. Management's 2026 push bets on tier-3-and-below cities — over 35% of China's fruit transaction value — and on the B2B arm. Whether an ex-premium chain can win a value fight it spent a decade arguing against is the open question.