On 11 February 2026, Yu Donglai — the founder of the highly regarded Henan retailer Pangdonglai — announced that he would formally retire after the Lunar New Year, relinquishing his posts as chairman and general manager while remaining on the margins as an advisor. The statement was sparse but consequential: an explicit age-limit roster (chairman and general manager must step down at 50; branch managers at 45), a clear handover of daily operations to a newly empowered decision committee, and an instruction that Yu would no longer wield veto power. For a man who has loomed over his company since a 40-square-metre tobacco-and-liquor stall in 1995, and who oversaw Pangdonglai’s rise to RMB 235 billion in sales by 2025 (roughly $3.3 billion), the departure marks an unusual, planned transfer of authority at a company peak rather than amid crisis.
Yu’s notice reads like the end of an era and the start of an experiment in governance. Three years earlier he had made a symbolic farewell from a stage in Hangzhou, speaking as a weary idealist about becoming a disseminator of a lifestyle vision rather than an active CEO. That retreat proved temporary: in April 2024 he was back on the shop floor, personally reconfiguring shelves during a joint assistance mission to Changsha. This time, however, the retirement comes with institutional scaffolding. The decision committee moves from behind-the-scenes adviser to the organisation’s operational centre, and Yu’s role has been reduced to offering counsel rather than commanding outcomes.
The episode is worth noting beyond Pangdonglai because it illuminates a recurring pattern in Chinese business: founders formally step down only to be recalled — by markets, creditors, employees or by their own sense of responsibility — when a company falters. Recent years offer multiple examples. Wang Shi, Vanke’s founder, remained engaged even after his public retirement; Vanke posted heavy losses and ballooning liabilities in 2024. Jack Ma returned to the Alibaba campus in 2023; Liu Qiangdong reappeared at JD at the end of 2022 and took an activist role in 2025; Zhang Jindong’s association with Suning has likewise been hard to sever. These comebacks are not merely personal theatrics but symptoms of governance gaps: when strategic direction blurs, organisations and markets cry out for the familiar authority that once delivered results.
Two structural explanations account for this dynamic. First, the founder is often the company’s chief credit and credibility device. In many Chinese firms the founder’s name functions like collateral: banks, suppliers and customers often underwrite their trust to the founder rather than to abstract corporate procedures. That brand-founder fusion makes the disentanglement of personal authority from organisational processes painfully difficult. Second, the timing and quality of the handover matter. Handoffs executed amid strategic upheaval or at moments when successors are untested frequently fail; handovers executed from positions of strength, with institutional norms in place, are far likelier to stick.
Pangdonglai’s approach therefore reads as a case study in deliberate institutionalisation. Yu spent two decades embedding service routines — the muscle memory of the company — and the past three years constructing a governance skeleton. Turning a personal operating model into a rule book and a committee that can execute strategy without waiting for a founder’s signal is the textbook path corporate governance experts advocate. But institution-building is both technical and cultural: procedures can be written, yet the informal transmission of values — the founder’s speeches, crises he managed, idiosyncratic decisions — is harder to codify.
That tension is the central uncertainty. Pangdonglai’s decision committee now holds formal authority, but whether it can maintain the company’s exacting service standards, unusually high staff welfare and anti-internal-competition ethos without Yu’s magnetic influence is an open question. Value-driven cultures are resilient insofar as they are routinised; they are brittle where they remain tied to charismatic exemplars. The risk is not immediate collapse but gradual dilution: a slow drift from the founder’s principles toward routinised efficiency, or worse, a compromise of service standards under cost pressure.
Viewed more broadly, Yu’s exit at a corporate high point is the kind of voluntary succession that governance advocates have long urged in China. It signals that a founder can institutionalise authority without waiting for shock events — debt crises, market share erosion, or regulatory intervention — to compel a handover. That matters for capital markets, for employee morale and for suppliers. If other mid-size and large Chinese firms emulate a similar sequence — build routines, create decision bodies, set clear retirement thresholds and retain founders as advisors without veto rights — the aggregate effect would be a gradual modernisation of corporate governance across the economy.
Still, institutionalisation is not a panacea. The ultimate test will be whether Pangdonglai’s committee can preserve a culture that was largely diffused through Yu’s personality and example. The coming quarters will show whether the company can sustain customer loyalty, low staff turnover and the store-level rigor that became its competitive advantage. For now, Yu’s second farewell is both a management milestone and a reminder: turning a founder-driven firm into a system-driven one requires not just new rules on paper but time, steady leadership, and an unwavering focus on translating personal norms into organisational habits.