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- After 8 years of entrepreneurship, opening 1,000 convenience stores—what has this veteran Mengniu employee accomplished?
- Adding 400 stores in one year—how did this convenience store company achieve such rapid growth?
- As a middleman who doesn't earn product margins, what is his underlying logic for doing B2B?
The entry of internet giants like Alibaba and JD.com has brought increasing capital attention to traditional retail stores, a primitive business format. Beyond the long-standing interest of traditional internet companies in 6.8 million small retail shops, more traditional retail enterprises are also turning their gaze toward these small shops. RT-Mart and Meiyijia are representative examples, but the company we're discussing today is the retail chain enterprise located in Xi'an—Every Day.
Public data shows that Xi'an Every Day was founded in June 2010 as a convenience store enterprise based in Shaanxi with a nationwide outlook. To date, it has covered more than 1,000 stores across Shaanxi, Henan, and Inner Mongolia, with annual revenue exceeding 1 billion yuan. At the same time, Every Day has developed into an innovative retail enterprise integrating convenience stores, fresh food supermarkets, the Bangbianli B2B supply chain platform, Weikerun Logistics, unmanned smart retail, and private label brands.
1 A Veteran Mengniu Employee Ventures into Convenience Stores
When mentioning Every Day convenience stores, one cannot avoid its founder Zhang Peiyan and the deeply rooted Mengniu culture within the company.
Zhang Peiyan graduated from university in 2003 and, through a stroke of luck, joined Mengniu. He stayed at Mengniu for eight years, rising from a promotional staff member to the position of regional deputy general manager for the Xi'an market. During this period, Zhang also acted as a distributor for Mengniu products from 2006 to 2007. Over eight years, Zhang developed an inseparable relationship with Mengniu, and his experience there honed his deep insights into the FMCG industry and market channels.
In 2010, Zhang officially left Mengniu to start his own business. At that time, the convenience store format had not yet gained traction nationwide, but the development momentum in first-tier markets like Beijing, Shanghai, Guangzhou, and Shenzhen was beginning to show. In contrast, Xi'an had no formal convenience stores, which presented an opportunity for Zhang, who came from the FMCG industry. He gathered a few partners and plunged into the convenience store entrepreneurial wave.
Although both belong to the broader FMCG industry, the logic of opening stores is vastly different from selling goods, which left Zhang, with his 8 years of FMCG experience, at a loss.
But hasn't he seen a pig run before eating pork? Zhang stubbornly transplanted the store standards he had learned from 7-Eleven and FamilyMart into Xi'an's busiest night market street, and imitated the stocking methods of large supermarkets by putting a large number of imported goods on the shelves.
Opportunity favors the prepared mind. Despite being clueless about convenience store operations, Zhang relied on his past sales experience at Mengniu to run the first store successfully, maintaining a monthly gross profit of over 20,000 yuan after deducting all operating costs. From then on, Every Day officially entered the fast track of development.
The breakthrough from 0 to 1 is certainly difficult, but in the process of enterprise development, blind market misjudgment can become the last straw that breaks the camel's back. This crisis for Every Day appeared in 2014.
"In 2014, we had basically become the number one convenience store brand in Xi'an, and we also thought about going out and expanding into external markets. But as we developed external markets, problems followed, mainly in two aspects: first, the supply chain; second, a lack of professional talent. This led to our service not keeping up, customer satisfaction not improving, and directly tarnishing our brand," Su Hong, deputy general manager of Every Day, told New Distribution. "Later, after much deliberation, we decided to close all branch companies in other markets, focus on the Shaanxi market, and only operate in areas our supply chain could reach."
Every Day's focus brought explosive store growth. Su Hong told New Distribution that in the early years, Every Day added only about 100 stores annually, but after several years of careful market cultivation, in 2017 alone, the number of stores increased by more than 400. By then, the total number of stores nationwide had exceeded 1,000.
2 The Convenience Store Operator 'Dabbling' in B2B
On May 24, the 2018 China Convenience Store Conference, hosted by the China Chain Store & Franchise Association, was held in Beijing. Every Day's 'Bangbianli' won the 2018 China Convenience Store Newcomer Award, less than a year after the Bangbianli brand was first exposed to the media. The rapid development of Bangbianli is not only due to Every Day's brand effect and high product richness but also closely related to its development strategy.
"Convenience store enterprises doing B2B is different from internet companies like Zhongshang Huimin and Zhanghe Tianxia doing B2B," Su Hong told New Distribution. "Because our enterprise itself operates convenience stores, the gene of a convenience store enterprise is to improve the selling power of a single store and then open more stores. So whether it's rebranding or supplying goods to stores, our purpose is to establish contact with small stores through products, and then gradually convert these stores into our direct-operated stores. The core viewpoint of new retail is to use technology to reconstruct people, goods, and scenes, but no matter how these three elements are reconstructed, the offline consumption scene is fixed, and what we want to do is to open stores closest to consumers."
In external media interviews, Zhang Peiyan summarized the dual model of Every Day (direct-operated) and Bangbianli (franchise) as a four-step process:
- First, supply goods to mom-and-pop stores through the Bangbianli B2B platform;
- Provide standardized tools and invite mom-and-pop store owners to join Every Day as franchisees;
- If, after joining, the owners' mindset hasn't changed and operations are poor, take the stores back as direct-operated;
- Promote internal franchising within direct-operated stores, i.e., open franchising to excellent employees, making the chain system more platform-based.
Most participants in the FMCG B2B industry base their store-opening logic on this: first, supply goods to small stores through B2B, gradually establish connections, and then through service penetration, slowly convert stores into franchise and direct-operated stores. New Distribution believes the benefits of this approach are mainly as follows:
- B2B and convenience store brands promote each other, bringing more bargaining power upstream. B2B can create brand effects through convenience stores, while convenience store enterprises can quickly increase purchase volumes through B2B, striving for greater pricing space with upstream brands and distributors;
- Traditional retail enterprises doing B2B can share existing warehousing and logistics costs, optimize product delivery routes, and thereby improve the fulfillment efficiency of unit orders;
- From Every Day's own perspective, Bangbianli is positioned for mid-to-low-end stores, with relatively low franchise thresholds and relatively lower requirements for store location and operations, which can to some extent buffer store owners' resistance to franchising and prepare for future conversion to direct-operated stores.
Although it's a loose franchise, Every Day does not engage in meaningless rebranding. Su Hong told New Distribution that currently, Bangbianli franchise stores account for about 50% of their purchases on the platform. Only when small store owners truly see the value of franchising will they gradually build trust in the company and possibly join.
3 As a Middleman, Not Earning Product Margins
Currently, most B2B platforms derive their profits from price differences between products. To gain greater profit margins and shorten the product circulation chain, various B2B platforms have signed direct procurement agreements with brand owners for direct product purchasing. However, Bangbianli does not earn platform commissions or supply price differences, and does not charge upstream suppliers channel fees, which constitutes another major difference from other B2B platforms.
"Because the Bangbianli supply chain platform uses collective procurement, prices are quite competitive. If we set the product price difference too high, it would be detrimental to our store conversion. Moreover, because Every Day has a complete revenue system, with main profit sources being store franchise fees and service fees, it does not rely on product price differences," Su Hong said. "This also constitutes the main difference from traditional distributors."
The rapid expansion of Every Day convenience stores relies not only on the natural growth of its own brand but also on Bangbianli as a core element. In the face of competition from traditional distributors and many B2B platforms, Bangbianli must identify its core competitiveness beyond product completeness and service. From this perspective, it's not hard to understand why Every Day does not earn platform commissions or product price differences.
Besides the three foreign convenience store brands—7-Eleven, FamilyMart, and Lawson—convenience store brands nationwide have shown a full-scale explosion. With the competitive entry of internet giants like Alibaba and JD.com and various capitals, convenience stores have entered the fast track of development.
In this situation, how to break through has become an unavoidable issue for convenience store enterprises. Whether it's companies like Meiyijia and Every Day expanding upward from original retail into the B2B field, or companies like Zhanghe Tianxia and 1 Life expanding downward from B2B to chain convenience stores, both are bold innovations and attempts.
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