Traditional Chinese supermarkets are currently facing a severe financial crisis, evidenced by a dramatic decline in profits during the first quarter of 2021. This struggle stems from a failure to compete with tech giants like Alibaba, whose "new retail" models seamlessly integrate online and offline shopping experiences. While industry leaders like Yonghui attempted to adapt by launching delivery services, they focused too heavily on product logistics rather than the consumer-centric data utilized by tech firms. Furthermore, the rise of community group buying has undercut prices by eliminating traditional wholesale costs, further eroding the customer base of physical stores. In contrast, successful examples like Taiwan’s PxMart demonstrate that digital transformation must prioritize customer behavior to bridge the gap between generations. Ultimately, the survival of these retailers depends on shifting from a merchandise-focused mindset to a sophisticated, data-driven strategy.