Yonghui Hints that Sam Coerces Suppliers into Choosing One or the Other; Industry Insiders: Suppliers Are "Avoiding" Yonghui

(Source: Caixin)

Manufacturers entering Sam’s supply chain are very cautious. Once Sam knows they have contact with a competitor, they may lose the opportunity to cooperate with Sam, even though the contract does not restrict this.

Recently, Yonghui Supermarket (601933.SH) issued a statement implying that Sam forces suppliers to choose only one partner, sparking heated discussion. Caixin sought confirmation from multiple Sam suppliers and industry insiders. They all stated that there is no such situation where Sam forces suppliers to choose only one. An industry insider told Caixin that it’s more about suppliers avoiding suspicion by not engaging with Yonghui, which relates to Sam’s current market position.

As a membership-based supermarket, maintaining product uniqueness is Sam’s core competitive advantage. If similar products appear in other supermarkets, it could threaten Sam’s core interests. Therefore, manufacturers entering Sam’s supply chain are very careful. Once Sam knows they have contact with a competitor, they might lose the cooperation opportunity, even though the contract does not restrict this.

Yonghui Supermarket has been continuously losing money in recent years. To turn around, the company is actively exploring a transformation towards the Pang Donglai model. This model, like Sam’s membership store model, requires cultivating private brands and maintaining product uniqueness. The latest results show that Yonghui’s transformation has not been very optimistic.

Multiple industry insiders deny the existence of a “choose only one” situation.

Yonghui’s public letter to Sam’s membership supermarket, which emphasized several initiatives, has sparked online discussion. The first point, which attracted public attention, is: “We should regulate our team’s conduct, focus on building our own quality, and avoid unfair competition behaviors such as forcing suppliers to choose only one partner.”

This point has been interpreted by the public as Yonghui implying that Sam forces suppliers to choose only one.

Regarding the controversy caused by this point, Caixin contacted both Sam and Yonghui on March 17. As of press time, no response was received from Sam, while Yonghui told Caixin that everything should be based on the content of the public letter, with no further comments.

However, many Sam suppliers Caixin interviewed stated that there is no such thing as only supplying Sam and not other supermarkets.

Fruit supplier Mr. Lin (pseudonym) told Caixin that their company’s fruits can be sold through different channels, including Sam. “Sam has high requirements for our quality,” he added. “Of course, the same products can also be supplied to other supermarkets, just not in the same packaging as for Sam.”

Industry insider Mr. Yin (pseudonym), who works in supermarket supply chains, told Caixin that the so-called “choose only one” online is related to Sam’s customized products. When a product that meets Sam’s standards is packaged exclusively for Sam, it can only be sold to Sam because it’s considered a co-developed new product, usually with a prior agreement.

Sam is not short of suppliers.

A senior industry insider, Mr. Zhong (pseudonym), told Caixin that for co-developed customized products with Sam, suppliers can generally improve their processes slightly to supply new products to other supermarkets. The contracts with Sam do not restrict this, as it involves serious legal risks. In practice, suppliers are very cautious and reluctant to risk collaborating with other supermarkets. The so-called “choose only one” implied by Yonghui is likely this phenomenon.

This situation is related to Sam’s current market position. Sam tends to prepare multiple suppliers for the same product, meaning they are not short of suppliers. On the other hand, maintaining product uniqueness is core to Sam’s membership store model. If similar products appear in other supermarkets, it could threaten Sam’s core interests.

Therefore, companies entering Sam’s supply chain are very careful to avoid losing orders from Sam.

Although there are plenty of suppliers in front of Sam, for traditional supermarkets like Yonghui, Sam’s suppliers are highly sought after. Establishing cooperation with these suppliers can send a message to the outside world: I am benchmarking Sam’s quality.

Suppliers in Sam’s supply chain essentially have Sam’s endorsement, although this endorsement is only within Sam’s review system as a relatively excellent supplier.

Yonghui Supermarket is still exploring.

Caixin noted that after Yonghui published the above public letter, online public opinion was not friendly. Many netizens believed Yonghui was copying Pang Donglai without understanding, and was trying to pick a quarrel with Sam. Some also questioned: if the same supplier can provide products to both Sam and other supermarkets, what is the point of Sam investing in exclusive private products? Why would consumers be willing to pay for a Sam membership?

Caixin learned that the Sam model and Pang Donglai model represent the main directions of domestic traditional supermarket transformation. Both focus on launching exclusive private products and cultivating own brands.

In recent years, Yonghui has faced continuous losses. To survive, the company is learning from Pang Donglai and has established the “Quality Yonghui” brand. By 2025, Yonghui plans large-scale store renovations nationwide. However, in its latest earnings forecast, Yonghui not only failed to turn a profit but also showed increasing losses, mainly due to the costs associated with store renovations.

In February 2026, Yonghui’s CEO Wang Shoucheng issued a company-wide letter, apologizing and reflecting on the past, and reaffirmed the continuation of renovation plans. The main goal remains the cultivation of own brands. Wang said Yonghui plans to build a “quality community” with 200 core production areas and factories, and create “100 billion-level reputation products,” strengthening the brand recognition of “Quality Yonghui” and “Yonghui Custom.”