---
title: "重磅丨新经销独家发布《中国零食硬折扣白皮书（快消行业洞察2023）》"
description: "On October 9, the 5th China FMCG Conference officially opened in Shenzhen. On the morning of October 10, at the 'Snacks and Discount Stores' sub-forum, Ren Wenqing, COO of New Distribution, Dean of the New Distribution Digital Research Institute, and Chief Expert on Hard Discount Industry, released the 'China Snack Hard Discount White Paper (FMCG Industry Insights 2023)'. The following are the key points of the speech."
author: "任文青Andy"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2023-10-10"
language: "en"
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---

# 重磅丨新经销独家发布《中国零食硬折扣白皮书（快消行业洞察2023）》

> On October 9, the 5th China FMCG Conference officially opened in Shenzhen. On the morning of October 10, at the 'Snacks and Discount Stores' sub-forum, Ren Wenqing, COO of New Distribution, Dean of the New Distribution Digital Research Institute, and Chief Expert on Hard Discount Industry, released the 'China Snack Hard Discount White Paper (FMCG Industry Insights 2023)'. The following are the key points of the speech.

On October 9, the 5th China FMCG Conference officially opened in Shenzhen.
At the **'Snacks and Discount Stores'** sub-forum held on **the morning of October 10**, **Ren Wenqing, COO of New Distribution, Dean of the New Distribution Digital Research Institute, and Chief Expert on Hard Discount Industry, released the 'China Snack Hard Discount White Paper (FMCG Industry Insights 2023)'.** The following are the key points of the speech:
Over the past period, the New Distribution team has conducted extensive surveys, visits, and research, all to present this white paper to the industry and everyone today—the 'China Snack Hard Discount White Paper (FMCG Industry Insights 2023)'. When you see this title, you might wonder: 'Snack hard discount', 'FMCG industry insights', 'white paper'—each word is familiar, but what do these three terms together mean? I think I should start with the more familiar concept of bulk snack stores. Regarding bulk snack stores, I summarize them with three 'too's. **The first 'too'—growth is too fast.** How fast? Let me show you a chart. By the end of this year, we estimate the industry will have 22,000-25,000 stores, with sales scale of 70-80 billion yuan. Compared to 2020, that's a more than tenfold increase in three years. Frankly, no one can give exact numbers at present; this is our estimate, but the order of magnitude won't be far off. **The second 'too'—impact is too great.** Wherever snack stores appear, two roles are inevitably affected. First, traditional retail stores. As long as a bulk snack store opens nearby, whether it's a supermarket or a mom-and-pop store, related category business drops by at least 30-40%, and some even go out of business. Second, distributors are affected. In our survey, more than half of distributors said snack stores caused their business to decline. Additionally, another important role affected is brand owners. Many brands that previously looked down on snack stores are now entering snack store systems despite the risk of destabilizing traditional channel pricing. Why? Such an important incremental channel cannot be ignored. Now, the procurement teams of snack store systems should be the busiest, with a queue of big brands waiting to see them. **The third 'too'—too many doubts.** There are too many doubts accompanying the explosion of bulk snack stores. **'How can low-priced snacks sustain a business?'** **'Isn't this just a capital bubble that will burst sooner or later?'** **'This is actually just cutting the leeks of franchisees.'** As a media outlet, we actually like these doubts because such topics easily attract traffic. But friends familiar with New Distribution know that New Distribution is a media outlet, but at the same time, it is a deep observer and researcher of the industry. Delving into the industry and researching it is what we have always done. We must figure out what is really happening. What did we do? We communicated with people in different roles: founders of snack store systems, franchisees, store managers and staff, consumers, investors, brand owners, distributors, and upstream factories; we conducted extensive desk research, comparing the development of foreign retail formats... We wrote articles and did live streams, aiming to help everyone multi-dimensionally understand what the hot bulk snack stores are all about. In fact, all our research and reports revolve around these three questions. **First, will snack stores be a flash in the pan?** **Second, how do snack stores take away business?** **Third, what is the real impact?** Today, I will share our research and thinking on these three questions.
**Will snack stores be a flash in the pan?**
**Keyword: Cycle**
To understand where a thing comes from and where it goes, we need a cyclical perspective. Standing in the present and looking at the present, you can never see clearly. Let's look at this chart. The landmark events of each stage and the reactions of different roles in the industry chain are written on it. What is our conclusion? **Since 2021, with capital injection and franchisee promotion, bulk snack stores have shown explosive growth.** **But bulk snack stores are not new; they have been around for 13 years since 2010 and are a proven business model.** Without a cyclical perspective, looking only at the current moment, many things are unclear. It's like standing in a forest, not knowing where you are or where you can go, but if you climb a mountain peak and gain a broader view, everything becomes clear. This chart is the mountain we need.
Currently, the industry is in a growth period. Everyone is racing to occupy blank markets, and head players are attacking each other's core regions. Why? **In the growth period, sales volume is key; with sales volume comes scale. In homogeneous competition, scale is the moat.** We judge there are still 2-3 years of dividend period. After that, it will enter maturity and decline, though the exact timing is hard to predict now, but it will definitely go through such stages. Of course, this refers to the cycle of the thing itself. Combined with the economic cycle, we can see more clearly. Under the macroeconomic cycle, consumption power undergoes structural differentiation. The public's demand for more cost-effective goods increases, and new channels will inevitably emerge to meet new demand. Bulk snack stores are a hard discount business model vertical to the snack category, deeply embedded in communities, relying on efficient supply chains to provide consumers with more cost-effective goods. **Whether from the perspective of the thing's own development cycle or the trend dividend under the economic cycle, snack stores will not be a flash in the pan.** After discussing the first question, let's look at the second.
**How do snack stores take away business?**
**Keyword: Hard Discount**
Snack stores have taken away business from traditional formats and distributors. Why? Many think it's because of low prices. If you stop there, you'll naturally conclude that low prices mean no good goods, and low prices cannot last. But we need to ask further: How can they achieve low prices? And sustained low prices? This brings us to another keyword today: **hard discount.** Friends who often read New Distribution articles may notice that compared to bulk snack stores, we more often use the term: **snack hard discount.** What is the difference between the two? On the surface, they both refer to the current hot snack collection store format, but their connotations are different. Bulk snack stores is a term for the external form, conveying information about its products, prices, and audience; snack hard discount is a term for the inner core, conveying information about its costs, efficiency, and model. The hard discount model is a business model that can be traced back to ALDI in Germany. **It achieves cost reduction through extreme product selection, compressing supply links, and reducing all unnecessary actions, serving mass consumers.** Why emphasize the difference in concepts? Concepts are tools for thinking; they frame our perspective and direction. By emphasizing hard discount, we hope everyone can see the core of things. Snack hard discount is the product of combining the hard discount business model with the snack category. To explain this clearly, I drew a chart. **'Low gross margin — high turnover — large scale'** These three elements are the flywheel of snack hard discount success. They correspond to the core modules: system profit setting, supply chain, operations, site selection, and franchise expansion model. Seeing snack stores are hot, many rush in to do it themselves, but if your understanding stays at the level of 'low price', 'product assortment', 'decoration', 'atmosphere', etc., without studying the core model, it's very dangerous.
**What is the real impact of hard discount?**
**Keyword: Efficiency**
In the business world, we must understand the meaning of efficiency. Products are produced and ultimately sold to consumers. In between, there are roughly two segments. **Factories and brands are the value creation segment**; they need to think about how to make good products and build brand premium. **Distribution and wholesale to terminal retail are the value delivery segment**; they need to think about how to provide consumers with low-priced products and create a good consumption experience through extreme efficiency. We often talk about efficiency, but the question is: What exactly is efficiency? The concept of hard discount can help you gain a deeper understanding of efficiency. Why? The English for hard discount is 'hard discount', where 'hard' means 'strong, resolute, strict', and 'discount' originally means 'not to count in', with its etymology pointing to reducing or subtracting a part from something. The meaning is: resolutely and strictly remove all unnecessary parts. This corresponds to the connotation of efficiency: **express the greatest content with the fewest actions and the least energy.** Hard discount selects SKUs carefully and omits all unnecessary links, bringing about an efficiency revolution. This efficiency revolution will inevitably impact the current channel system, affecting brand owners, distributors, and terminals along the chain. In our white paper, there is an important section: the survey summary of brand owners and distributors. We conducted questionnaire surveys with over 100 brand owners. Among them, 82% have established cooperation with snack stores, of which 41% are direct supply, 34% through distributors, and 25% use both methods. The biggest problem encountered in cooperation is price conflict with existing channels, followed by product selection and logistics distribution issues. We categorized and summarized brand owners' response strategies and current status. Based on two dimensions—brand power/market share and category/SKU richness—different brand owners are in completely different states in the snack store channel. We collected over 100 distributor questionnaires. 52% of distributors said snack stores caused their business to decline. From the dimension of agency brands, distributors representing first-tier brands are more affected; among distributors representing first-tier brands, 72% saw business decline. What should distributors do? We summarized distributors' response strategies from two dimensions: the breadth of distributor channels and the density of snack store openings, and gave our suggestions. For brands and distributors, how should they view the current situation? Let me show you a chart. This is the channel structure 10 years ago. This is today's channel structure. Adding hard discount chains, you can see it at a glance. We have been talking about channel fragmentation; what is its essence? **It is the squeezing of inefficient models by efficient models. The trend of inefficient being squeezed and replaced by efficient is irreversible.** What we can do is follow the trend. Of course, behind this change, we also see something deeper: the progression from product sovereignty to brand sovereignty, and further into the era of consumer sovereignty. Upstream overcapacity, consumers placing more importance on products, cost-effectiveness, and experience, matches the rise of hard discount chains. Not only snack hard discount, but also hard discount businesses with different category combinations and forms are just beginning to develop in the Chinese market. From the perspective of the industry chain, what does this mean? The discourse of the era will gradually shift from channel reform under brand sovereignty to supply chain revolution under consumer sovereignty.
**1. Severe upstream overcapacity; factories OEM for channel brands**
> 1. Traditional offline sales points lose sales to hard discount; factories without product cost-effectiveness advantages find it hard to survive
>
> 2. High-quality factories, including some major brands' own factories, become OEMs for channel products/brands
**2. Hard discount becomes a strong channel; brand premium effect weakens**
> 1. Sales volume determines bargaining power; head brands must cooperate with channel adjustments, lowering brand premium
>
> 2. Some small and medium brands/quality white-label products rely on mainstream hard discount channels to rise
>
> 3. Offline retail has limited shelf space; more small and medium brands/white-label products will form a symbiotic relationship with regional hard discount stores
**3. Distributors accelerate reshuffling; local supply chains become more efficient**
> 1. Hard discount impacts local trading systems; distributors have fewer terminals to supply, and those whose break-even point is breached exit the market
>
> 2. Regional retail terminals still exist, but price levels are pulled down, requiring matching efficient local supply chain platforms
**Efficiency beats inefficiency**
The above are the core points of our white paper. The full version is nearly 80 pages, divided into five parts:
> **I. Background Analysis: The background of the rapid outbreak of snack hard discount**
>
> **II. Model Deconstruction: The hard discount model of low gross margin and high turnover**
>
> **III. Landscape Interpretation: The industry landscape and evolution of snack hard discount**
>
> **IV. Survey Summary: Impact and responses of brand owners and distributors**
>
> **V. Trend Insights: Supply chain revolution under consumer sovereignty**
Through detailed data, rich charts, and concise text, we enable you to understand the past, present, and future of snack hard discount in the shortest time. The questions you care about, such as the current competitive landscape and future evolution of snack stores, snack store operating models, franchisee profitability, and brand and distributor response strategies, are all explained. It can be said that **this is currently the most comprehensive and deepest interpretation of snack hard discount.**
The FMCG industry is an evolving species, and in recent years it has been accelerating change, making practitioners increasingly anxious—because they don't know where it will go! Business keeps declining; can new models work? How to do them? Everyone says to transform, but how exactly? For each company and each person, it's a personalized issue. But compared to specific problems, we must first ask: **What is the direction of industry evolution? What is the trend that, after stumbling, we will eventually head towards?** Specific forms may change in a thousand ways, but the core of efficiency beating inefficiency will not change—this is the underlying logic we must firmly grasp to cross cycles and move towards the future.
Add WeChat to obtain the white paper.
Attachment: Outline of the full version of the 'China Snack Hard Discount White Paper (FMCG Industry Insights 2023)'
 _PS: Friends interested in the on-site speech content can follow the recent push of the 'New Distribution' WeChat official account. We will organize and publish all guests' speeches for readers._
 _Click **Read Original** to see more of the 5th China FMCG Conference and the 1st China FMCG Distributor Conference..._


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