Pang Donglai Trading Group, a Xuchang, Henan province-based retail chain, is giving its workforce a direct stake in the company's profits in a bid to enhance workforce motivation and operational performance.

On March 8, founder Yu Donglai disclosed on social media that the firm's 4 billion yuan ($580 million) in assets will underpin a new profit distribution plan: roughly 50 percent of annual profits will go to employees, and 50 percent to management. Yu said he himself accounts for about 5 percent, or 200 million yuan, of the distribution.

The distribution model actually follows what Pang Donglai has maintained for over two decades, he added.

In the future, half of these profits will be distributed as bonuses, while the remainder will be retained as shareholder earnings, said Yu. For instance, 12 store managers have been allocated 20 million yuan each, totaling 240 million yuan.

The move follows a track record of employee incentives. In June 2025, Pang Donglai's more than 8,000 employees earned an average post-tax monthly salary of 9,000 yuan, while management and technical staff received around 700,000 yuan annually per person.

On March 10, Yu replied on social media that profit-sharing is key to sustaining company health and employee satisfaction.

That day, Pang Donglai released the results of a vacation policy survey conducted in late February: 82 percent of staff preferred to maintain the current system, while the remainder chose options involving modest salary reductions in exchange for additional leave. Employees currently work seven hours a day and receive 40 days of annual leave.

The profit-sharing plan coincides with strong financial performance. Pang Donglai reported 23.53 billion yuan in revenue for 2025, up 38.7 percent from 17 billion yuan in 2024.

By category, its supermarkets remain the core business, generating 12.64 billion yuan, while jewelry and tea contributed 2.45 billion yuan and 1.06 billion yuan, respectively.

Founded in 1997, with a registered capital of 56.6 million yuan, Pang Donglai Trading Group operates across packaged and bulk foods, specialty foods, clothing and food processing. Ownership is shared among Yu Donglai and a group of partners.

Jason Yu, general manager of CTR Market Research, said Pang Donglai's model reflects a broader trend in Chinese retail: "Human capital has become the core competitive advantage. When employees share ownership, creativity and loyalty rise, boosting service quality and operational efficiency."

He said Pang Donglai shows that a people-oriented approach can drive sustainable growth and provide a model for the industry to break competitive deadlocks.