Sun Art Retail, the operator of the ubiquitous RT-Mart hypermarkets and a former crown jewel in Alibaba’s 'New Retail' portfolio, has slumped back into the red. The company’s fiscal year 2026 results reveal a net loss of 319 million yuan, a jarring reversal from the 405 million yuan profit recorded only a year prior. This financial erosion is compounded by a double-digit slide in revenue, which fell 11.3% to 63.4 billion yuan as consumer traffic continues to migrate toward digital platforms and specialized membership warehouses.
Beyond the balance sheet, a crisis of leadership has paralyzed the organization’s ability to pivot. The board recently terminated CEO Li Weiping after just three months on the job, citing his failure to perform duties and a period of unannounced absence. This marks the fourth change at the helm in just two years, a rate of turnover that signals deep-seated strategic misalignment and internal instability. Hua Yuneng, a co-founder of the private equity firm DH Capital which now controls the group, has stepped in as the fifth CEO to attempt a stabilization.
RT-Mart’s struggle is emblematic of the broader obsolescence of the traditional 'big box' model in the Chinese market. Once the dominant force in grocery and household goods, hypermarkets saw their market share collapse from 19% to 13% as they were squeezed by two opposing forces. On one side, instant retail platforms leverage rapid delivery to capture daily convenience shopping; on the other, high-end membership clubs like Sam’s Club and Costco have siphoned off the lucrative middle-class family segment.
While Sun Art has attempted to modernize through its 'M-Member' stores and private label expansion, the progress remains sluggish. Private label sales grew by 60% but still represent a negligible 3.2% of total revenue, far below the industry benchmark of 30% required to sustain margins in a low-growth environment. With liquidity tightening and leadership in flux, the group faces a grueling uphill battle to convince both investors and consumers that the traditional hypermarket still has a place in China's digital-first economy.