In a world obsessed with growth, he chose joy.
You won’t find Yu Donglai in typical business school cases. This stocky, plainspoken entrepreneur from Henan province of China never finished junior high, yet he has built what many call “the best supermarket in the world.” While other retailers squeeze every ounce of profit, Yu pours his energy into making employees and customers genuinely happy. Yu’s true success lies not in revenue, but in the radiant smiles of his staff and the heartfelt loyalty of his customers.
His company, DL (or Pang Dong Lai), has become a retail phenomenon that defies conventional business logic. With more than ¥17 billion (the equivalent of 2.4 billion USD) revenue from 13 local stores, this “retail miracle” draws shoppers from all over the country. During one holiday in 2025, DL stores received over 3 million visitors per day, surpassing the total number of tourists to the top five scenic tourist sites in their province combined.
The Humble Beginning
Yu Donglai’s path to business enlightenment was paved with hardship and poor choices. Born into poverty in 1966, he disliked school and dropped out after 7th grade. He tried his hand at various small businesses—selling popsicles, fruit, and movie tickets—but struggled to find his footing.
His early business ventures ended disastrously. While selling tobacco and alcohol, he once fell for a scam and purchased counterfeit cigarettes, losing everything. By 1991, he had accumulated ¥300,000 in debt—a massive sum at the time—and even served jail time for his business missteps. Hounded by debt collectors, he fled his hometown in shame, working low-paying jobs like guarding mines in a remote area.
This rock-bottom moment became the turning point. Returning home after four years, Yu decided to try again, this time with a radically different approach. In 1995, he borrowed money from his brother to open a 40-square-meter variety store called “Fat Donglai’s Store”—the humble beginning of what would become DL today.
He made a simple promise to customers: “Use genuine products to exchange for genuine hearts.” In an era when counterfeit goods flooded the market, this commitment to authenticity resonated deeply. Word spread, and by 1996, Yu had not only earned his first million but, more importantly, paid off every cent of his crushing debt.
Emerging From a Fire
Just as business flourished, tragedy struck. On March 15, 1998, arsonists set fire to Yu’s store, reducing it to ashes and claiming eight lives, including one of his employees. The catastrophe left Yu with nearly one million yuan in new debt and plunged him into despair.
What happened next became the defining moment in Yu’s life and business philosophy. Rather than demanding refunds for prepaid shopping vouchers, the local customers rallied to support him. An elderly woman approached him and said, “Child, don’t let this defeat you. If you need money, I have ¥20,000 in savings that I can give you.”
This outpouring of community support revealed a profound truth to Yu: “Money is easy to repay, but human kindness is not.” He realized DL didn’t belong to him alone—it belonged to the community. This insight transformed him from a businessman seeking profit to a custodian of community wellbeing.
A Different Business Approach
Yu Donglai built DL on a revolutionary business philosophy centered on “Freedom & Love.” Unlike traditional corporations focused solely on shareholder value, DL’s business decisions are always centered on people. His business became “a humane community that serves humanity”.
Putting employees first. While other retailers struggle with 30% employee turnover rates, DL maintains a remarkably low turnover – less than 2%. The secret? Yu treats employees as family rather than expenses. Upon joining the company, every employee receives a “Happy Life Handbook.” This isn’t a corporate rulebook, but a guide to living well. It covers diverse aspects of life, from home organization to caring for elderly parents. The company invests in well-being with high salaries, a 7-hour workday, Tuesday closures, and extra paid vacations. It reflects the company’s belief that a happy, balanced life outside of work is essential for an employee’s well-being.
Once, a customer loudly reprimanded an employee. After careful investigation, the company published an 8-page report acknowledging shortcomings in their management, demoted the management team for 3 months and paid ¥5000 to the employee involved in “psychological compensation“ for the public humiliation. DL offers a unique “unhappy leave”, allowing employees to take time off to manage their emotional state without any justification. DL’s reputation as a dream employer has made it one of the most desirable retail companies to work for in China. This investment in people pays remarkable dividends and leads to outstanding customer service.
Customers as extended family. Founder Yu instructs his staff, “Don’t treat customers as God, treat them as family.” This philosophy shifts the dynamic from one of servitude to one of genuine care and mutual respect. It empowers employees to provide heartfelt service and underpins the feeling many locals express, that Yu Donglai and his store feel like a beloved family member in the community.
In a bold move against common retail practices, DL’s private label products not only show selling prices but also cost and gross margin. This level of transparency builds immense trust, allowing customers to feel confident they are getting a fair deal. DL has a refund policy. If a customer is unsatisfied with a product, the company will offer a refund with no questions asked. To encourage feedback and hold themselves accountable, DL rewards customers ¥500 each time they offer valid service complaints.
DL proactively helps customers in need. If a product is out of stock, staff will help find it elsewhere, even from other retailers. Their service extends to tasks like free clothing alterations, even for garments not purchased in their stores. This transforms a simple transaction into a supportive community relationship. In a gesture of deep respect for the logistics chain that supports its business, DL’s warehouse provides a fully equipped rest area for delivery truck drivers. This includes not just a place to sleep, but also hot showers, food, and drinks–all free. This practice acknowledges the hard work of suppliers’ drivers and ensures they are well-rested and safe.
Participation in management. The company fosters a sense of ownership and fairness. Managers are subject to biannual anonymous evaluations by their staff, and those with satisfaction ratings below 80% face training or even demotion. They also have a system of rewards for employees to contribute to management improvement, such as an “Innovation and Creation Award” and a “Brave Dispute Award,” having distributed up to a million yuan in such rewards annually.
Purpose Before Scale
One of his most radical business decisions, Yu deliberately limits DL’s expansion despite its massive success. With ¥4.1 billion in cash reserves and no debt, he could easily finance nationwide expansion. But he questions whether endless growth truly serves his mission of spreading happiness. In his mind, relocating his experienced staff to other cities disrupts their work-life balance. This reflects a core Teal principle: prioritizing purpose over blind growth. Instead, he generously shares his business philosophy, operating model, and management experience with all who seek to learn. He has even guided the turnaround of a struggling national chain with 450 stores, which adopted his ‘kindness, beauty, and love’ model to return to profitability.
Yu Donglai built a retail paradise not through aggressive expansion, but through generous compassion. His story demonstrates that business success and human values aren’t just compatible—they can be powerfully synergistic. When a company’s purpose is fully aligned with the collective interest of the eco-system, every member within the eco-system conspires to make the company healthy and sustainable. A business is a vehicle not only for making profit but also for learning, spiritual practice and self-growth. From the ashes of his burned store emerged not just a better business, but a blueprint for enterprises rooted in mutual care rather than exploitation.