---
title: "2017 China Convenience Store Industry Development Trends and Market Size Forecast [Chart]"
description: "Consumption upgrading and demographic shifts have driven demand for convenience, with convenience stores leading industry growth. Rising incomes have reduced price sensitivity and increased demand for quality and convenience. Trends such as the rise of the post-90s consumer group, accelerated pace of life among young people after the full second-child policy, and an aging population have created needs like 'homebody, lazy, craving, urgent, busy, old'. Convenience stores, being close to consumers, align with these new consumption trends and have broad prospects. In 2015, convenience store sales grew 7.6% year-on-year, the highest among all retail formats (department stores -2.4%; supermarkets +3.9%; electronics chains +0.5%); it is expected that from 2016 to 2020, convenience store sales will grow at 8%-10%, significantly higher than other formats."
author: "New Distribution"
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published: "2017-01-05"
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# 2017 China Convenience Store Industry Development Trends and Market Size Forecast [Chart]

> Consumption upgrading and demographic shifts have driven demand for convenience, with convenience stores leading industry growth. Rising incomes have reduced price sensitivity and increased demand for quality and convenience. Trends such as the rise of the post-90s consumer group, accelerated pace of life among young people after the full second-child policy, and an aging population have created needs like 'homebody, lazy, craving, urgent, busy, old'. Convenience stores, being close to consumers, align with these new consumption trends and have broad prospects. In 2015, convenience store sales grew 7.6% year-on-year, the highest among all retail formats (department stores -2.4%; supermarkets +3.9%; electronics chains +0.5%); it is expected that from 2016 to 2020, convenience store sales will grow at 8%-10%, significantly higher than other formats.

Consumption upgrading and demographic shifts have driven demand for 'convenience', with convenience stores leading industry growth. Rising incomes have reduced price sensitivity and increased demand for quality and convenience. Trends such as the rise of the post-90s consumer group, accelerated pace of life among young people after the full second-child policy, and an aging population have created needs like 'homebody, lazy, craving, urgent, busy, old'. Convenience stores, being close to consumers, align with these new consumption trends and have broad prospects. In 2015, convenience store sales grew 7.6% year-on-year, the highest among all retail formats (department stores -2.4%; supermarkets +3.9%; electronics chains +0.5%); it is expected that from 2016 to 2020, convenience store sales will grow at 8%-10%, significantly higher than other formats.

**Forecast of Sales and Growth Rates for Department Stores, Supermarkets, Electronics Chains, and Convenience Stores in China, 2016-2020**

Low concentration, divergent profitability. China's convenience stores are mainly distributed in the Yangtze River Delta, Pearl River Delta, developed coastal provinces, and provincial capitals in the interior. Foreign convenience store leaders, such as 7-Eleven, FamilyMart, and Lawson, are mainly located in Beijing-Tianjin, the Yangtze River Delta, Pearl River Delta, and some key cities; domestic convenience stores are mainly located in their respective advantageous provinces and regions, such as Meiyijia mainly in Guangdong Province, and Hongqi Chain entirely in Sichuan Province. The convenience store industry is highly fragmented, with CR4 only 31.4%, while Taiwan and Japan have CR4 as high as 92.1% and 90.5%, respectively. **The profitability of domestic convenience stores is generally better than that of foreign convenience stores, mainly because:** 1. Domestic convenience stores are densely distributed in regions, while foreign convenience stores are more dispersed; 2. Domestic convenience stores generally adopt a 100% self-operated or franchise-based model; in the case of 100% self-operation, the company has complete control over stores, making it easy to coordinate management and reduce operating costs; under the franchise model of domestic convenience stores, profit sources are diversified, such as franchise fees (deposited funds), management fees, and supply price differences.

**Capital is actively entering, and traditional retail leaders are expected to 'catch up from behind' in convenience store layout.** Zhongbai Group, Tianhong Mall, Yonghui Superstores (member experience stores), Suning Cloud Commerce (Suning Xiaodian), Bubugao (iBBG convenience store alliance), EAS, SF Express, and other industrial and financial capital from different fields have increased investment in the convenience store sector. Traditional commercial leaders started late in convenience store layout, but are expected to 'catch up from behind': 1. They already have product supply chains, logistics, and membership resources, and the convenience store layout can synergize with existing formats; 2. They mainly adopt direct operation and close franchising (revenue sharing, cost sharing) models, with standardized management and easy replication.

**Industrial capital increases layout in the convenience store format**

**Main operating models of convenience stores**

**Outlook for the convenience store format:** With the rise of community O2O, the entrance value of convenience stores is highlighted. Both convenience stores and O2O satisfy the six major needs of 'homebody, lazy, craving, urgent, busy, old'. The characteristics of high density, short radius, and immediate convenience determine that convenience stores are an important entrance for community O2O. At the same time, convenience stores and O2O have prominent synergies in supply chain/logistics/big data: the convenience store's supply chain and logistics system strengthens or compensates for the O2O operator's control over goods, and undertakes terminal warehousing and distribution functions; the high overlap of customer groups and big data sharing are conducive to achieving economies of scale, precision marketing, and expanding financial business.

**The monetization methods of convenience stores' 'Internet + community': price difference + traffic monetization + big data + finance.** 1. Price difference: supply chain and logistics systems for FMCG supply franchise stores or stores outside the system, earning price differences and service fees; 2. Traffic monetization: two-way traffic diversion between the system and partners; the system can gather customer flow, promote cross-selling, and drive advertising fees, service fees, etc.; directing traffic to partners can earn commissions, deductions, etc.; 3. Big data: provide data support for the system, suppliers, brand owners, etc., for precision marketing, C2B, etc.; 4. Finance: private banks, third-party payment, consumer credit, micro-loans, etc., with models including deposited funds, commissions, interest spreads, etc.

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