Going forward, I doubt any company will want to emulate Pang Donglai (胖东来)

What happened

Pang Donglai (胖东来), the privately held Henan retail chain, has reportedly moved to formalize a profit‑sharing model that its founder Yu Donglai (于东来) said turns nearly RMB 3.8 billion of assets into company equity and splits future returns roughly 50/50 between management and employees. It has been reported that the plan—posted on social media—allocates large share parcels to store managers and even small equity stakes to frontline staff, with more than 10,000 employees said to become shareholders under the scheme. The company’s executives say this is not a sudden gesture: the firm has run a version of employee distribution for two decades, and the latest step merely converts informal gifts and trust arrangements into clear, institutionalized share capital ahead of a new Zhengzhou store.

Why other firms struggle to copy it

On paper, the model looks replicable. In practice, it isn’t. Many Chinese retailers rushed to “learn from Pang” after the chain’s strong shop‑level performance, but several—Yonghui (永辉), Meitehao (美特好) and Zhongbai (中百), among others—have reportedly slid into losses and store closures after trying similar reforms. The gap? Culture. Pang Donglai pairs generous reported benefits—average take‑home pay reportedly above RMB 9,000/month, sub‑7‑hour workdays, 30 days paid annual leave plus 10 days of unconditional “free leave,” and in‑store “employee homes” for rest and recreation—with a longstanding trust culture that predates the corporate‑level share plan. That culture, managers and scholars note, is the hard part; institutional rules without the relational trust can look like a one‑off PR program, not a durable organizational shift.

Bigger picture

Analysts frame the contrast with Douglas McGregor’s X‑ and Y‑theories of management: do you assume workers must be controlled, or enabled? Pang’s approach assumes the latter and embeds profit sharing into governance; many other firms still default to tighter control, especially under margin pressure. Why does this matter beyond retail? As China and global competitors race to deploy AI, human creativity and discretionary effort are becoming a rarer, more valuable corporate asset—particularly as geopolitical pressures and trade frictions push firms to squeeze more innovation from internal teams. Institutionalizing generosity sounds attractive. But can it be engineered at scale, or must it grow from long‑cultivated culture? That, observers say, is the real lesson—and the real reason many companies may choose not to try.