“China’s leading leisure snack company, Laiyifen, once basked in endless glory, is now in deep trouble. In the first three quarters of 2025, this veteran snack enterprise saw its net losses nearly double year-on-year, while also closing nearly 500 stores. Against the backdrop of a persistently weak consumer market in China, Laiyifen’s struggles epitomize the difficult transformation faced by the traditional retail industry.
According to reports from media outlets such as Huaxia Times and Daily Economic News, Laiyifen’s latest financial report shows that the company’s revenue for the first three quarters reached 2.854 billion yuan, a year-on-year increase of 13.12%. However, the net loss amounted to a staggering 125 million yuan, a 194% increase compared to the 42.62 million yuan loss in the same period last year, leading to almost a doubling of losses.
The data for the third quarter is even more concerning. Despite a 25.15% year-on-year growth in income to 914 million yuan, the net loss reached 74.66 million yuan, not only showing a nearly 30% increase compared to the previous period but also expanding further from the 50.68 million yuan loss in the second quarter. This situation of “increasing income, increasing losses” exposes a severe deterioration in the company’s profit-making ability.
The continuous decline in gross profit margin is a major factor behind the losses. In the first three quarters, Laiyifen’s gross profit margin dropped by 9.16 percentage points to 31.58% year-on-year. The company attributes this to adjustments in its new business structure, but industry insiders believe it reflects the fierce price war that is eating away at the company’s profit margins.
Under the pressure of performance, Laiyifen is experiencing an unprecedented wave of store closures.
By the end of the first half of this year, the total number of company stores sharply decreased to 2,979, a reduction of 493 stores compared to the same period last year, with a high closure rate of 14.2%.
There have been significant changes in the store structure as well. The number of directly operated stores has decreased from being the main force to 1,395, falling below 50%; while franchise stores have increased to 1,584, accounting for 53%, surpassing for the first time. This shift highlights Laiyifen’s attempt to reduce costs through a “light asset” model as part of its strategic adjustment.
This stands in stark contrast to Laiyifen’s ambitions in the past. In 2017, the company had grandly launched the “Millions of Lights Strategy,” aiming to open ten thousand stores by 2023. However, against the backdrop of a continual downturn in the Chinese economy, Laiyifen’s store count reached a high of only 3,685 at one point and is now steadily shrinking, moving further away from the goal of ten thousand stores.
Laiyifen’s predicament is not an isolated case but a microcosm of the entire industry.
Among the 11 leisure snack companies listed on the A-share market, seven saw a decline in performance in the first half of this year. Liangpin Shop’s revenue plummeted by 27.21% year-on-year, resulting in a loss of 93.55 million yuan; former industry stars like Three Squirrels are also under pressure.
Industry analysts point out that the Chinese leisure snack market is entering a “low-profit era.” Laiyifen’s focus on the Yangtze River Delta region faces the challenge of soaring commercial rents, escalating management costs, high personnel wages, and distribution expenses. To maintain sales volume, companies are forced to frequently reduce prices for promotions, yet even with these efforts, revenue growth remains weak.
The impact of online channels, changing consumer habits, and an overall weak economic environment are squeezing the survival space of traditional snack chain enterprises. The growth model that relied on “expanding stores” in the past is now unsustainable.
What further dampens investor confidence is that while the company’s performance continues to worsen, the controlling shareholder is busy divesting to cash in.
According to mainland media International Financial News, in June this year, Laiyifen disclosed that its controlling shareholder, Ai Wu Holdings, planned to reduce its holdings by no more than 10.03 million shares, or 3% of the total share capital. During the reduction period, Ai Wu Holdings actually reduced 6.68 million shares, cashing in 82.43 million yuan, reducing its shareholding from 52.96% to 50.96%.
Ai Wu Holdings is the corporate holding 100% controlled by Laiyifen’s founders, couples Shi Yonglei and Yu Ruifen. Against the backdrop of the company’s 50.68 million yuan loss in the first half of the year, the substantial cashing out by the controlling shareholder undoubtedly sends a negative signal to the market, further adding doubts to investors about the company’s future development.”