Pagoda, China’s first listed fruit retail chain, has released its 2025 annual results, revealing a challenging year marked by declining revenue and store closures, though with signs of recovery in the second half.
The company reported full-year revenue of RMB 8.17 billion, a year-on-year decline of 20.4%. Loss attributable to owners was RMB 317 million, narrowing 17.8% from the previous year.
Loss reduction driven by operational improvements
Pagoda attributed the narrowed loss primarily to operational improvements in the second half of 2025. The company encouraged franchisees to relocate or close stores with high rental costs, high labor expenses, or poor operating performance, while redirecting more resources to better-performing outlets. This effort helped optimize the store network.
As of December 31, 2025, Pagoda operated 4,468 offline stores, a reduction of 659 from the end of 2024. Compared with the peak of 6,093 stores at the end of 2023, the company has closed more than 1,600 stores over the past two years — a contraction of nearly one-quarter.
Pagoda acknowledged that there were market concerns about the large-scale store closures in the first half of 2025. However, with the network optimization largely completed by the end of June, the company said the “closure wave” had officially ended. In the second half of the year, Pagoda resumed expansion, adding a net 82 stores to reach 4,468, returning to a growth trajectory.
Lowering franchise barriers to accelerate recovery
To accelerate the recovery of its store network, Pagoda significantly lowered its franchise entry barriers. The single-store investment cost was reduced from RMB 280,000–300,000 to RMB 230,000. The company also introduced a series of support policies, including opening subsidies and phased fee waivers on royalties, effectively reducing the capital threshold and early-stage operating pressure for franchisees.
Franchise sales decline amid weak consumer sentiment
Despite these measures, total sales revenue from franchised stores fell approximately 20% year-on-year in 2025. Against a backdrop of persistently weak consumer spending, low confidence among franchisees remains a pressing challenge that Pagoda cannot ignore.
Diversified revenue structure
Pagoda’s revenue is primarily derived from two segments: consumer-facing sales through franchised and self-operated stores, and B2B distribution to wholesale channels. In 2025, the revenue contribution breakdown was as follows: franchised stores 72.3%, self-operated stores 0.3%, regional agents 10.5%, direct sales (B2B) 14.6%, and online channels 0.7%.
Strategic shift toward value and affordability
Notably, Pagoda’s latest earnings report showed a clear shift in messaging from earlier comments by Chairman Yu Huiyong, who had spoken about “educating consumers” and “not catering to consumers.” The company has now established a new core strategy as a “high-quality and high-cost-performance fruit expert and leader.”
This strategic adjustment has manifested in large-scale promotions and price concessions. In 2025, Pagoda launched 22 “Gratitude for Good Fruit” themed campaigns featuring high-cost-performance items such as ponkan and lychees. These campaigns generated a total of 25 million orders and drove over RMB 500 million in sales.
Additionally, in response to weak consumer demand, Pagoda has continued to optimize its product mix, increasing the proportion of lower-margin, high-value items to better align with consumers’ price expectations. However, this has directly compressed profit margins. The company reported gross profit of RMB 597 million for 2025, down 21.9% year-on-year.
B2B business gains momentum
With pressure on its consumer-facing business, Pagoda is stepping up its focus on B2B operations, seeking new growth drivers through deeper supply chain integration. According to the financial report, revenue from the company’s fruit and other agricultural product direct sales business reached approximately RMB 1.191 billion in 2025.
The company’s B2B procurement platform, Shenzhen Banguo, performed strongly, achieving gross merchandise volume (GMV) of RMB 2.38 billion for the year. By building out a nationwide network of urban warehousing and distribution systems, the platform has further expanded its coverage and penetration among small and medium-sized fruit merchants.
Outlook: retail expansion and supply chain integration
Looking ahead, Pagoda said it will steadily advance store expansion and performance improvement while promoting shared benefits across the upstream and downstream industry chain. On the retail side, following a two-year strategic adjustment, the company has completed a phased optimization of its store network. In 2026, Pagoda will focus on large-scale retail expansion, pursuing greater product refinement, more complete category offerings, and more personalized services, with the fundamental goal of broadening end-customer coverage.
