---
title: "A 30-Billion-Yuan Blue Ocean: What Kind of Business Are Expiring-Food Stores?"
description: "A bottle of French Perrier water, normally priced at 12.8 yuan, sells for 5 yuan here; a can of Lay's chips, usually over ten yuan, can be bought at half price. Expiring-food stores, represented by HotMaxx, are sweeping through first-tier cities like Beijing, Shanghai, and Guangzhou. According to iiMedia Research, China's total snack sales reached 3 trillion yuan in 2020, implying a potential market supply of at least 30 billion yuan. With such promising prospects, capital has poured in. In 2020..."
author: "李树烽"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2022-04-09"
language: "en"
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# A 30-Billion-Yuan Blue Ocean: What Kind of Business Are Expiring-Food Stores?

> A bottle of French Perrier water, normally priced at 12.8 yuan, sells for 5 yuan here; a can of Lay's chips, usually over ten yuan, can be bought at half price. Expiring-food stores, represented by HotMaxx, are sweeping through first-tier cities like Beijing, Shanghai, and Guangzhou. According to iiMedia Research, China's total snack sales reached 3 trillion yuan in 2020, implying a potential market supply of at least 30 billion yuan. With such promising prospects, capital has poured in. In 2020...

## 1 bottle of French Perrier water normally retails at 12.8 yuan, but here it sells for 5 yuan; a can of Lay's chips, usually over ten yuan, can be bought at half price.
Expiring-food stores, represented by HotMaxx, are becoming popular in first-tier cities such as Beijing, Shanghai, and Guangzhou. How large is the expiring-food market? According to iiMedia Research, China's total snack sales reached 3 trillion yuan in 2020. Even based on a minimum 1% market sedimentation, this implies a potential market supply of 30 billion yuan. With such bright prospects, capital has entered the fray. In 2020, Xiaoxiang Shenghuo was established in Nanjing, positioning itself as a "discount supermarket for household basic consumer goods." The same year, Boom Boom Mart appeared in Shanghai. Both have completed financing rounds of tens of millions of yuan. In January this year, Suning Xiaodian opened its first discount store in Anshan, proclaiming a goal of "subsidizing 10 billion or 20 billion yuan in the future." HotMaxx, an early entrant, is a retail brand launched in 2019 by Shanghai Xinguo Technology Co., Ltd. It has completed four rounds of financing in two years. Currently, HotMaxx has expanded from Shanghai to other first-tier cities, with as many as 75 stores operating in Beijing.
"Expiring food? Isn't it about to go bad? Can it still be eaten?" Many consumers likely have such doubts. Expiring food refers to products that are approaching their expiration date but are still within the shelf life. However, there is no unified national standard for defining the expiration date. Currently, two methods are commonly recognized: either based on the remaining specified days before expiration, or calculated as a proportion of the remaining time. Some foods with long shelf lives but poor sales are treated as expiring earlier by store owners. Others with short shelf lives but good sales may be discounted only on the last day. Within the shelf life, merchants guarantee that the flavor and texture match the product description. Beyond that period, merchants simply no longer "guarantee" quality, but the food is not spoiled. Therefore, expiring food is edible, but the timing of when it becomes "expiring" is quite flexible.
******Why Have Expiring-Food Stores Become Popular?** Why have expiring-food stores suddenly become popular and become darlings of capital? On one hand, products in the market are highly homogenized, leading to a large amount of unsold inventory. Take snack foods as an example: after "Daily Nuts" was launched by Wolong in 2016, brands like Baicaowei, Three Squirrels, and Bestore successively launched their own versions. According to incomplete statistics, over 300 companies are currently producing this product. Another example: Genki Forest's sparkling water, which emphasizes health and sugar-free, swept the market, prompting other new and old brands to imitate, crowding into the same track. Additionally, the pandemic has made more imported foods likely to become expiring. Imported foods already have long cycles—1-2 months of shipping, plus customs clearance and shelving, and about 3 months have passed. Many KA (key accounts) stop selling when one-third of the shelf life remains to ensure food quality. This means that for imported foods with a one-year shelf life, the effective selling time is only half a year. This is why a large number of imported foods appear in expiring-food stores. The large amount of unsold products provides supply support for the development of the expiring-food industry. On the other hand, with the promulgation and implementation of the Anti-Food Waste Law in 2021, saving food and opposing waste are not only moral advocacy but also legal constraints. In this context, both practitioners and capital believe that offline expiring-food stores are a track worth investing in.
******Who Are the Consumers of Expiring-Food Stores?** According to the "2020 China Expiring-Food Industry Market Analysis and Consumer Research Report" released by iiMedia Consulting, people aged 26-35 account for 48% of China's expiring-food consumers. Young people want to live delicately but have to save due to limited spending power, making expiring-food stores a choice that satisfies both. Based on the characteristics of the consumer group, the location of expiring-food stores is strategic. Taking HotMaxx as an example, it mainly opens stores in office parks, subway stations, and business districts to target young consumer groups like white-collar workers. This positioning has also received a response from young consumers. According to the author's observation, young people are promoting this new business format through social media platforms. For instance, on Douban, a platform popular among young people, there is a topic group called "Stingy Squad" where people often share their "stockpiling" experiences at expiring-food stores. Some KOLs on Xiaohongshu are also recommending HotMaxx through online "seeding." Currently, HotMaxx's business is booming, and its operations seem to have found the right direction. However, the author's research reveals that the current operation of expiring-food stores still faces significant challenges.
******What Challenges Do Expiring-Food Stores Face?** **Supply chain is the primary issue.** Many products in expiring-food stores come from channel diversion or surplus stock, causing extreme uncertainty in supply. A friend from a new consumer brand told the author that their new product had been diverted to expiring stores due to lack of supervision. Because the selling price in expiring stores is far below market price, it had a negative impact on the brand image. The brand then took measures to strictly prevent channel diversion. This means it becomes difficult for expiring-food stores to restock this product. Some expiring-food stores also source from surplus stock. Distributors often have to overstock to meet manufacturers' sales targets or earn sales rewards. What do they do with unsold goods? Some distributors choose to offload them to expiring stores. In both cases, product supply is extremely unstable. Besides diverted and surplus goods, many products sold in expiring-food stores are from second- and third-tier brands. These brands choose to list in expiring stores because they cannot afford the management fees of traditional channels. Additionally, some poorly managed brands cannot pay suppliers and use goods to offset debts, which eventually end up in expiring stores. "Selling whatever is left" is a characteristic of expiring stores, **but this unstable supply and the tendency toward low-end products greatly affect the consumer experience.** Many young people buy well-known brands they are passionate about, but whether these products are available in expiring stores is a matter of luck. This leads to poor consumer experiences and affects their willingness to return. The abundance of unknown brands in expiring-food stores also raises concerns about food safety and quality, influencing purchase decisions. A mother with a child told the author: she is very cautious when choosing snacks for her child; she would buy a few well-known brand products after confirming the expiration date. Compared to low prices, she values food safety more. Seeing many unknown brands, she has obvious concerns and said she is unlikely to shop at expiring-food stores.
******What Are the New Trends in Expiring-Food Stores?** Expiring-food stores are certainly aware of these issues. For example, HotMaxx is working hard to solve supply chain problems. HotMaxx's project cooperation document shows that the company has signed exclusive inventory distribution cooperation agreements with over 200 well-known brands, including P&G, Nestlé, and COFCO, to ensure the supply of well-known brand products. Optimizing the upstream supply chain can stabilize supply and also means an increase in the quantity and variety of first-tier brand products, thereby reducing consumer concerns and boosting sales. **Additionally, HotMaxx is actively expanding its offline market.** It is rumored that at HotMaxx's annual meeting, management proposed a goal of achieving profitability in 500 stores this year. Profitability requires high inventory turnover, high foot traffic, and a larger market scale. In March this year, HotMaxx opened its first stores in new first-tier and second-tier cities like Suzhou and Huizhou. Amid the pandemic, consumers are increasingly focused on value for money. With stagnant incomes and most money going toward down payments, mortgages, and tuition, the burden is growing, forcing consumers to "trade down." Shopping at expiring stores at low prices is a selective compromise. This may be an opportunity for the development of expiring-food stores. **In addition, expiring-food stores are also expanding online channels.** Among many well-known offline expiring-store brands, HotMaxx recently took the lead in launching O2O services via a mini-program: consumers choose the nearest store, select items from that store, and delivery is available for orders over 50 yuan. Moreover, HotMaxx is also building private domain traffic. Cashiers at HotMaxx ask customers if they want to become members to enjoy new-user discounts. Customers can also easily join nearby communities through online entry points (official account/mini-program). Expiring-food stores are essentially retail; whether offline or online, the key to retail is foot traffic. Currently, young consumers have a certain level of interest in this new format, but can expiring stores continuously lock in this consumer group? It must be said that the private domain direction is correct, but the effect remains to be seen.
**Final Thoughts:** "There is no waste in the world, only treasures in the wrong place." Expiring-food stores, on one hand, allow consumers to buy needed products at lower prices; on the other hand, they help merchants reduce losses and increase profits. They have their value. How to solve upstream supply issues and effectively acquire and manage downstream consumers is a challenge for practitioners. After all, expiring-food stores are essentially a form of retail store, and relying on capital support will not last long. Of course, we should also be patient and give this new format time to explore, try, and develop. We will continue to watch where expiring-food stores ultimately go.
Do you think the expiring-food industry is promising? Feel free to leave a comment below.
**Are you "watching" me?**


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