On a certain date, Hongqi Chain (Chengdu Hongqi Chain Co., Ltd.) divested its non-performing assets for 100 yuan and exited from Gansu Hongqi (Gansu Hongqi Convenience Chain Co., Ltd.). The underlying changes have attracted attention.

Pursuant to the agreement, Hongqi Chain has exited Gansu, and its partners Lanzhou State-owned Limin (Lanzhou State-owned Limin Group Co., Ltd.) and Gansu Hongqi will no longer be able to use the words "Hongqi," "Hongqi Chain," or "Hongqi Convenience," including text and images. The Gansu partners have parted ways with the "Hongqi" name.

From the announcement released by Hongqi Chain, it can be seen that before its withdrawal, the financial situation of Gansu Hongqi deteriorated sharply. By the end of the year to the date, the total assets of Gansu Hongqi decreased from approximately 100 million yuan to approximately 50 million yuan; the net assets dropped from approximately 50 million yuan to approximately -50 million yuan; and the net profit fell from approximately -50 million yuan to approximately -100 million yuan.

Hongqi Chain stated that its initial entry into Gansu, in collaboration with Lanzhou State-owned Limin, was primarily motivated by the consideration of "supporting the development of state-owned enterprises in the retail industry." In other words, Lanzhou State-owned Limin was the proactive introducer, registering an investment of 100 million yuan and holding a 51% stake, inviting Hongqi Chain to join. Hongqi Chain, on the other hand, contributed its brand, systems, business model, management, and supply chain platform, without injecting actual funds, holding a 49% stake.

As originally planned, Hongqi Chain would establish and replicate its chain model in Gansu, after which the construction team would withdraw, leaving Gansu Hongqi to operate independently. However, following the partnership, Gansu Hongqi's business situation continued to deteriorate. The existing model was unable to support Gansu Hongqi's development. Facing this predicament, through friendly negotiations, Hongqi Chain transferred its % equity to Lanzhou State-owned Limin at a symbolic price.

For Hongqi Chain, the disposal of non-performing assets at a nominal price will not have a negative impact on Hongqi Chain, while for Lanzhou State-owned Limin, the clean exit of the partner can also be seen as support for future restructuring. Thus, Hongqi Chain's out-of-Sichuan initiative is declared a failure. Looking back on this out-of-Sichuan move, Hongqi Chain summarized it as: "This was a trial run for cross-provincial development and a new attempt in the retail industry." Implicitly, although the initiative did not succeed, there is still value in exploration.

The current collaboration between Hongqi Chain and Lanzhou State-owned Limin is driven by the nationwide push for digital economy and community economy. The society is undergoing a significant transformation, propelled by new forms of productive forces, aimed at upgrading and transforming the Chinese economy, achieving digitalization of the entire population's life, and thereby enhancing the standard of living for the people. This transformation spans from smart homes to smart communities, and further to smart cities, smart provinces, and ultimately a smart China, constructing a comprehensive digital living environment for the nation.

For cities, smart communities are key nodes. To break through this node, cooperation from multiple parties such as technology, government, businesses, and funding is required, as well as in-depth exploration of models. Since the nation advocated for smart cities, the construction of smart communities across various regions has been actively promoted. However, most of these efforts remain at a relatively elementary level, such as only addressing relatively easy aspects like smart security.

Lanzhou State-owned Limin is a "people's livelihood guarantee state-owned enterprise" in Lanzhou. Its starting point for cooperation with Hongqi Chain is also based on the actual needs of the people, exploring new business models with its own property service functions, which is the "new attempt in the retail industry." On the opening day of Gansu Hongqi, the roles of Gansu Hongqi were summarized as follows: a representative from Gansu Hongqi stated, "serving the public, facilitating the people"; a representative from State-owned Limin stated, "community service + smart retail," "online + offline"; a representative from the Lanzhou State-owned Assets Supervision and Administration Commission stated, "focusing on serving community residents, stimulating community consumption, revitalizing property resources, and fostering the development of the community economy, creating a new regional retail brand, new business model, and new industry."

The reason Lanzhou is considering the introduction of Hongqi Chain is also because it has noticed how Hongqi Chain serves local residents in Sichuan. However, the issue is not that simple. The competition in the new retail sector targeting the "last mile" of communities is a fiercely contested battlefield. While providing convenience, it is not easy to survive and profit in this field. The high losses experienced by Gansu Hongqi also reflect the current reality of the new retail format. To some extent, this failed cooperation is Lanzhou State-owned Limin paying tuition to solve new challenges.

For this reason, it is inappropriate for Hongqi Chain, as a commercial institution in Sichuan, to explore the issue of non-performing assets on behalf of the people of Gansu. This is another background for the amicable separation of the two parties. Although the separation has occurred, whether it is Lanzhou State-owned Limin or Lanzhou community economy, this game will continue after summarizing the lessons; Hongqi Chain is no exception.

It is noteworthy that Hongqi Chain's withdrawal from Gansu and refocusing on its Sichuan roots is, in fact, part of the same strategic move as Gansu's actions. Just before exiting Gansu, Hongqi Chain announced a major asset restructuring (approved in month and year)—Sichuan Commercial Investment (Sichuan Commercial Investment Co., Ltd.) took control of Hongqi Chain. The actual controller of Hongqi Chain was changed to the Sichuan Provincial State-owned Assets Supervision and Administration Commission. In tandem with this change, Cao Shuru, the founder of Hongqi Chain, announced that she would relinquish the voting rights of her remaining shares. In other words, Cao Shuru demonstrated with her actions that she handed over the strategic decision-making power of Hongqi Chain to Sichuan Commercial Investment—the future direction of Hongqi Chain is determined by Sichuan Commercial Investment (ultimately, it is the policy orientation that dictates).

Sichuan Commercial Investment's acquisition of Hongqi Chain, in collaboration with Lanzhou State-owned Limin, aims to achieve the same objectives. However, the positions of Sichuan Commercial Investment and Limin State-owned differ. Limin State-owned focuses on property management, thus entering from the micro perspective (community supermarkets). In contrast, Sichuan Commercial Investment is based in Sichuan and extends its influence across the national supply chain, hence it extends from the macro to the micro level. According to official statements, Sichuan Commercial Investment's control of Hongqi Chain is intended to "reach more people and connect more communities."

On the date before the acquisition of Hongqi Chain, a digital consumption platform named "Shuguang Hui" was officially launched. This platform was created by the parent company of Sichuan Commercial Investment Group. According to the introduction, "Shuguang Hui" relies on the supply chain system of Sichuan Commercial Investment Group, integrates resources from major third-party platforms such as JD.com, Tmall, and Suning.com online, and collaborates with merchants like Hongqi Chain, Yonghui Supermarket, Wangfujing, and Hema Fresh offline. It serves over ten thousand offline consumption service stores, meeting the needs of full-scenario consumption.

It can be seen that amidst the digital wave, a new form of integrated development is spreading to communities. Hongqi Chain recently stated clearly in response to public inquiries that it is committed to local development and has no plans to expand beyond Sichuan. Considering its already deep integration into the strategy of Sichuan Commercial Investment to develop Sichuan, this game is already large enough for Hongqi Chain at present.