Chinese food and beverage giant Master Kong Holdings Co., Ltd. recently released its performance report for the first half of 2025, revealing profound changes in the Chinese consumer market. The data shows that the company’s revenue in the first half of the year declined by 2.7% compared to the same period last year, marking the first negative revenue growth in nearly five years. Of particular note is the unprecedented contraction of Master Kong’s distribution network.
According to the report, Master Kong Holdings Co., Ltd. (referred to as “Master Kong”) is facing growth challenges in its two core businesses. The convenience noodle business had a revenue of 13.465 billion yuan in the first half of the year, a 2.5% decrease compared to the same period last year, accounting for 33.6% of total revenue; beverage business revenue was 26.359 billion yuan, down 2.6% year-on-year, accounting for 65.7% of total revenue. This performance is highly consistent with the overall sluggish trend in the current Chinese consumer market.
Furthermore, the high-end product lines promoted by Master Kong, such as “Royal Feast,” “Instant Noodle Collection,” and “Express Noodle House,” saw a 7.2% decline in revenue to 5.092 billion yuan. Sales of tea, water, and fruit juice declined by 6.3%, 6.0%, and 13.0% respectively.
The price increase strategy implemented multiple times by Master Kong this year has been a significant driver behind the revenue decline. Against the backdrop of “consumption downgrading” and “internal competition” becoming the main themes in various industries, this counter-trend pricing strategy clearly underestimated consumers’ sensitivity to price changes.
At the same time, Master Kong’s debt level continues to rise, with the company’s total debt increasing by 4.3 billion yuan to 39.882 billion yuan in the first half of the year, pushing the debt-to-asset ratio to 71.3%, highlighting increasing financial pressure.
Faced with declining sales volume and compressed channel profits, Master Kong’s distribution network is undergoing an unprecedented contraction. The semi-annual report shows that as of the end of June, the number of Master Kong’s distribution network points decreased by 3,409 compared to the beginning of the year, with nearly 1,500 fewer company-owned retail terminals.
It is worth noting that in the entire year of 2023, 9,660 distributors had already chosen to exit, with a cumulative loss of over 13,000 distributors in two years.
While Master Kong explains this as “actively eliminating low-productivity network points,” industry insiders generally believe that the continuous price increase strategy has severely squeezed the profit margins of distributors, making it difficult for many small and medium distributors to sustain their businesses.