HotMaxx went from $1B unicorn to closing stores — China's discount retail fad faded fast

HotMaxx (好特卖) was founded in 2020 as a discount retailer of close-dated and overstocked consumer goods. The model was simple: buy distressed inventory from brands at steep discounts and pass the savings to shoppers. In an economy where consumers were tightening spending, the concept took off fast.

Between 2019 and 2021, the company raised five rounds of funding from investors including 5Y Capital and GSR Ventures. Its 2021 valuation hit $1 billion, making it a unicorn. By 2024, it operated 960 stores across China and reported ¥4.85 billion in annual sales. The first store in Shanghai made ¥90,000 on opening day.

The cracks appeared in 2025. Daily revenue per store had fallen to around ¥10,000 — an 88% decline from the first store. The supply of close-dated goods proved unreliable, as major brands tightened their inventory management. Competition from hard-discount chains like Mingming Hen Mang and from internet giants entering the discount space squeezed margins. Stores in Beijing, Guangzhou, Hangzhou and Changsha began closing, and some cities stopped accepting new franchisees.

HotMaxx tried to pivot from close-dated goods to surplus stock and new products, but the pricing advantage was gone. Its Hong Kong expansion, which opened 11 stores in six months starting in 2024, saw its Kwai Fong location close in early 2026. The company's valuation fell sharply and expansion stalled.