Maison Solutions Inc., together with its subsidiaries, is a fast-growing, specialty grocery retailer offering traditional Asian food and merchandise to modern U.S. consumers, in particular to the members of Asian-American communities.
The company is committed to providing Asian fresh produce, meat, seafood, and other daily necessities in a manner that caters to traditional Asian-American family values and cultural norms, while also accounting for the new and faster-paced lifestyle of younger ge...
Maison Solutions Inc., together with its subsidiaries, is a fast-growing, specialty grocery retailer offering traditional Asian food and merchandise to modern U.S. consumers, in particular to the members of Asian-American communities.
The company is committed to providing Asian fresh produce, meat, seafood, and other daily necessities in a manner that caters to traditional Asian-American family values and cultural norms, while also accounting for the new and faster-paced lifestyle of younger generations and the diverse communities in which it operates. To achieve this, the company is developing a center-satellite stores network.
The company owns equity interests in four traditional Asian supermarkets in Los Angeles, California and three traditional Asian supermarkets in the greater Phoenix and Tucson, Arizona metro areas. The company has been operating these seven supermarkets as center stores, which it defines as a full-service store, similar to a traditional supermarket or grocery store covering a metro area, but with its own storage space to be used as a warehouse to distribute products to the satellite stores.
In addition to the company’s traditional supermarkets, in December 2021, it acquired a 10% equity interest in a new grocery store in a young and active community in Alhambra, California (the ‘Alhambra Store’). The company acquired its interest in the Alhambra Store from Grace Xu. The company intends to acquire the remaining 90% in the Alhambra Store. The company’s intention is that the Alhambra Store will serve as its first satellite store. The satellite stores in the company’s network will be designed to penetrate local communities and neighborhoods with larger and growing concentrations of younger customers.
The company’s merchandise includes fresh and unique produce, meats, seafood and other groceries that are not found in mainstream supermarkets, including a variety of Asian vegetables and fruits, such as Chinese broccoli, bitter melon, winter gourd, Shanghai baby bok choy, longan and lychee; a variety of live seafood, such as shrimp, clams, lobster, geoduck, and Alaska king crab; and Chinese specialty groceries like soy sauce, sesame oil, oyster sauce, bean sprouts, Sriracha, tofu, noodles and dried fish. With an in-house logistics team and strong relationships with local and regional farms, the company can offer high-quality specialty perishables at competitive prices.
The company’s customers have diverse shopping habits based on, among other factors, their age and lifestyle. Along with creating an exciting and attractive in-store shopping experience, customers can choose to place orders on a third-party mobile app ‘Freshdeals24’, and an applet integrated into WeChat for either home delivery or in-store pickups offering the company’s customers the option of a 100% cashier-less shopping experience. The company’s flexible shopping options are designed to provide customers with convenience and flexibility that best match their lifestyles and personal preferences. The company is working closely with JD.com to improve and update its online apps to continue to specifically target and attract a wider variety of the company’s customer base.
While the company’s main focus is on targeting Asian-American communities and catering to both established Asian-American family values and the shifting needs of the younger generations, the company also plans to opportunistically address other demographics and populations.
The success of the company’s business is supported by a strong core team that brings deep knowledge and experience in supermarket operations, supply chain, warehouse management and logistics, as well as e-commerce. The core team members all come from leading market players such as Freshippo (known as “Hema Shengxian” in China), Yonghui Superstores, H-Mart and other similar industry leading supermarket retailers.
The company is exploring multi-channel solutions to customers by leveraging its strategic partnership with JD.com, a leading online retail business in China.
On April 8, 2024, AZLL, LLC, a wholly owned subsidiary of the company (‘AZLL’), acquired 100% of the equity interests in Lee Lee Oriental Supermart, Inc. (‘Lee Lee’), a three-store supermarket chain operating under the name Lee Lee International Supermarkets in the greater Phoenix and Tucson, Arizona metro areas.
Many products the company sells include ingredients such as wheat, corn, oils, milk, sugar, cocoa and other commodities.
Center-Satellite Stores Model
The company’s seven traditional retail supermarkets are set up and operated as center stores. The company intends to acquire the remaining 90% equity interest in the Alhambra Store, which it intends to have serve as its first satellite store. The center stores mainly serve traditional family-oriented customers with a variety of fresh produce and daily necessities at competitive prices. The satellite stores in the company’s Center-Satellite store network will be designed to penetrate local communities and neighborhoods with larger populations of younger customers, such as ‘Millennials’ and ‘Generation Z’.
Products
Traditional Supermarkets/Center Stores
All the company’s traditional supermarkets offer perishable and non-perishable items. The company puts a significant focus on perishable product categories which include vegetables, seafood, fruit and meat. In 2024, the company’s perishable product categories contributed approximately 54.0% to its total net revenue in alignment with the space occupancy of perishables.
Vegetables: All the company’s stores receive daily deliveries of vegetables and are required to sell out all vegetables on a three-to-five-day basis. The company discounts its vegetables after three days, which significantly lowers the storage cost and worn-and-torn rate and improves profitability. In addition, to lower the worn-out rate of green-leaf vegetables, due to customer rummage, the company usually packs and sells such vegetables in bags. The company also displays and sells different kinds of vegetables according to their characteristics. For example, Chinese yams need to be displayed on wood shreds to keep them fresh, while watermelons are typically sold in pieces due to their large size.
Fruit: Almost all the company’s unique fruits are seasonal offerings in which quality and price are decisive to customer traffic during peak season. These fruits are sold at higher unit prices and generally offer higher profit margins. The company benefits from its long-standing relationships with farm vendors to stay competitive during peak seasons and enjoy better sourcing price and higher profit margin from fruit sales. The company adopts different storage technologies based on characteristics of different fruits and vegetables. All vegetables and fruits are delivered and sold on a three-to-five-day basis, to lower worn rate, lower human cost and keep up the high quality.
Meat: Since the company can sell more animal body parts than other mainstream grocery stores, the sales it generates from a whole pig, chicken or cow are much higher than those of mainstream groceries, resulting in higher margins on meat and meat products sales. For example, pork liver, intestines and feet, chicken hearts and feet and beef tripe, are all staples of Asian cooking that would not be offered in typical grocery stores allowing the company to capture more of the value of a whole animal and leading to an increased margin on the sale of these products. The company also cuts and packages meats for various specific purposes to cater to Asian cooking habits and styles. For example, the company slices different kinds of meat specifically for hot pot cooking and then package and freeze them for quick pick-up and easy storage and use by customers. In addition, the company sells meats prepared with Asian seasonings, which are ready to cook after purchase. Meats cut for specific purposes or prepared with Asian seasonings generally result in higher margins.
Seafood: As an established procedure, the company’s in-house merchants collect live seafood from wharfs and markets at midnight daily. Purchased seafood is immediately distributed to all retail stores via the company’s in-house cold chain systems in which hibernation technology keeps seafood alive and ensures its freshness and quality. For different species, the company maintains different water temperatures and oxygen density in their tanks and containers. Hibernation technology is widely used in the in-house cold-chain system for long distance distribution to best ensure freshness and quality. As with what the company does with meats, it fillets fish for specific purposes or preseason the seafood for Asian cooking.
With respect to non-perishables, the company has over 13,000 grocery products on its shelves ranging from cooking utensils, canned foods, Chinese and Asian seasonings and spices, to domestic and imported snacks. Many of the company’s imported groceries are sourced from China, Thailand and Taiwan to meet the diverse demand of not only Chinese Americans but targeted customers originating from east and south-east Asia. In the year ended on April 30, 2024, the non-perishable grocery category contributed approximately 45.97%, to the company’s total net sales and realized a markup of 35.13%.
Lee Lee Oriental Supermart, Inc.
On April 8, 2024, AZLL, LLC, a wholly owned subsidiary of the company (‘AZLL’), acquired 100% of Lee Lee Oriental Supermart, Inc. (‘Lee Lee’).
Through the acquisition of Lee Lee, the company expanded its operations beyond California into the growing Arizona markets. The company has opted to retain Lee Lee’s brand name for the three acquired stores as a strategic move to maintain the existing, loyal customer base.
With the addition of Lee Lee’s three profitable store locations, the company’s store portfolio was expanded from four to seven operating stores. The Lee Lee acquisition offers evident synergies, as the three Lee Lee stores cater to the same target demographic and offer similar product lines as its four Hong Kong Good Fortune stores. The company intends to implement certain operational improvements, including the enhancement of store operations and supply chain centralization.
Store Renovation Program
From time to time, the company conducts maintenance and renovations on its stores to enhance customer shopping experiences and optimize store designs.
In January 2024, the company began renovating its HK Good Fortune supermarket in El Monte, California. The renovations to the El Monte store include exterior and interior upgrades as well as product offering adjustments. Additionally, the store will use updated logos and banners, which will be used throughout Maison’s store network, for enhanced brand awareness and consistency.
The company intends to continue to upgrade its stores to provide a more meaningful shopping experience for the company’s customers.
Vertical Supply and Distribution Chain
The company’s business model features a vertically integrated structure covering upstream supply and downstream retail supermarkets. In December 2021, the company acquired a 10% in Dai Cheong, a wholesale business, which mainly supplies foods and groceries imported from Asia. To support its import trading business, Dai Cheong has an integrated ecosystem of import, customs clearance and wholesale services.
The company works with three primary suppliers. These primary suppliers accounted for approximately 48.0%of the company’s total purchases in fiscal year 2024. The company also has established, long-term relationships with local and regional farms which grow Asian specialty vegetables and fruit and supply the most popular yet hard-to-source vegetables and fruits directly to its supermarkets. Working with the company’s vendors, it is able to provide fresh seasonal vegetables and fruits. Produce, live seafood and groceries are delivered to the company’s supermarkets daily from its farm partners and external vendors as directed by the company’s in-house logistics system.
The company’s in-house logistics team is committed to fast and reliable delivery for customers who place online orders for delivery. The company’s center-satellite store network gives it the ability to set up in-store, mini-warehouses to achieve fast order fulfillment and speedy delivery. The company is able to provide same-day delivery for orders placed before noon within a five miles radius of the closest store.
Integrated Online and Offline Services
The company started a series of online initiatives soon after it acquired its first supermarket in 2019. The company undertook this initiative and designed these apps based on its awareness of the predominance of WeChat in both the Chinese American and broader Asian-American communities and extensive research into the habits of the younger generation of customers. the company is working closely with JD.com to improve and update its online apps to continue to specifically target and attract a wider variety of the company’s customer base.
The company integrates its online and offline retail capabilities and use the company’s center stores as warehouses to fulfill online orders. By managing inventory and offline resources effectively, its stores satisfy consumers’ demands in-store, as well as online. The company offers multiple shopping channels through integrated online and offline operations. Customers can place orders through the third-party mobile app and applet and for either home delivery or in-store pickups. The company’s flexible shopping options are aimed to provide customers with convenience and flexibility that best match their lifestyles and personal preferences.
JD.com is developing a new mobile app for the company’s future stores.
Marketing and Advertising
In addition to word-of-mouth, the company advertises its brand using in-store tastings, in-store weekly promotion signage, cooking demonstrations and product sampling. The company also promotes its stores on the company’s official website and an electronic newsletter, and/or inserts and sales flyers in local Chinese newspapers, magazines and local radio stations on a monthly or weekly basis. The company’s business is also marketed mainly on its official website, a third-party Mobile App ‘Freshdeals24’, and an applet integrated into WeChat. Overall, the company has utilized mixed marketing and advertising strategies to enhance its brand recognition, to regularly communicate with the company’s target customers, and to strengthen its ability to market new and differentiated products.
As the company intends to establish more satellite stores and with its new mobile app being developed, the company foresees a significant increase in advertising in the future, with a focus on social media promotion.
Strategy
The company strategy is to continue building center satellite stores network. The company is exploring its multi-channel initiatives including improving the company’s in-store shopping experience, increasing and enhancing its mobile ordering with at-home delivery and in-store pickup and broadening the company’s social media presence.
Partnership with JD.com
In April 2021, the company entered into a series of agreements with JD E-commerce America Limited (‘JD US’), the U.S. subsidiary of JD.com, including the Collaboration Agreement and Intellectual Property License Agreement.
Collaboration Agreement
On April 19, 2021, JD E-commerce America Limited (‘JD US’), the U.S. subsidiary of JD.com, and Maison entered into a Collaboration Agreement (the ‘Collaboration Agreement’). Under the Collaboration Agreement, JD US has agreed to provide the following services to the company for fees:
Stage 0 — the Consultancy Services including: (i) consideration and assessment of the company’s business nature; (ii) information and standards, and analysis and study of feasibility of omni channel retailing of its business; and (iii) preparation and delivery of feasibility plan of omni channel retailing of the company’s stores;
Stage 1 — the Initialization Services, including initializing the feasibility plan, digitalization of the company’s stores, delivery of online retailing and e-commerce business and operational solutions for the stores with omni channels;
Stage 2 — the Implementation Services, including product and merchandise supply chain configuration, staff training for operation and management of the digital solutions, installation and configuration of hardware, customization of software, concept design and implementation; and
Stage 3 — the Platform Services, including providing actual operation and management of the store upon delivery and necessary support services.
Intellectual Property License Agreement
Simultaneously with the effectiveness of the Collaboration Agreement, JD US and Maison entered into an Intellectual Property License Agreement (the ‘Intellectual Property License’) outlining certain trademarks, logos and designs, and other intellectual property rights used in connection with the retail supermarket operations outlined in the Collaboration Agreement. Under the Intellectual Property License, JD US granted the company a ten-year limited, non-exclusive, non-transferable, non-sublicensable license in the state of California to:
Use the brand consisting of a combination of certain marks of JD.com (the “JD.com Marks”) and certain marks of the company in such forms to be agreed upon by mutual written consent of the company and JD US (the “Co-Brand”);
Use the JD.com Marks, but only as incorporated into the Co-Brand; and
Use, copy and distribute any design or embodiment of the brand image or visual identity by which the Co-Brand will be known to the public, including any design of store layout, signage, advertising and marketing materials, consumer communications, artworks, webpages, mobile app content, and other materials that JD US may provide to the company, in all cases solely in connection with its operation and promotion of the company’s retail supermarket stores in the state of California as approved by JD US, and the products and goods and the related services offered and sold in such stores.
Trademarks
‘HK GOOD FORTUNE SUPERMARKET’ and the stylized wording of ‘GOOD FORTUNE’ is the company’s self-owned trademark and was registered with the United States Patent and Trademark Office on December 20, 2022. Such trademark is the brand of the company’s four retail supermarkets located in California.
Competition
The company’s principal competitors include 99 Ranch Market and HMart for traditional supermarkets and Weee! for online groceries.
Regulation
The company is subject to regulation by various government agencies, including the U.S. Food and Drug Administration (the ‘FDA’), the U.S. Department of Agriculture (the ‘USDA’), the Federal Trade Commission (the ‘FTC’), the Occupational Safety and Health Administration (‘OSHA’), the Consumer Product Safety Commission (the ‘CPSC’), the Environmental Protection Agency (the ‘EPA’), as well as various state and local agencies.
In addition, under the FSMA, the FDA has the authority to inspect certifications and therefore evaluate whether foods and ingredients from the company’s producers and suppliers are compliant with the FDA’s regulatory requirements.
History
The company was founded in 2019. It was incorporated in 2019. The company was formerly known as Maison International, Inc. and changed its name to Maison Solutions Inc. in 2021.
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