---
title: "Ailingshi Takes Control of Local Chengdu Brand, Snack Retail Industry Enters Merger and Integration Mode"
description: "On August 9, 2023, Ailingshi, a snack retail chain based in Changsha, announced it had taken control of the local Chengdu snack retail chain Konglongheteddy, bringing its store count in Chengdu to over 300 and in Sichuan to over 350, making it the second-largest local snack retail brand in Sichuan. On the same day, Snacks Busy announced a strategic investment of tens of millions of yuan in Qiahuopuzi, and the two will jointly consolidate advantageous regions and develop the national market. This signals that the snack retail industry has entered a phase of merger and integration as competition intensifies."
author: "任文青Andy"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2023-08-09"
categories: "Brand Marketing, Consumer & Categories, Retail Formats"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/AROiUsi5YcO0fQtDDPjxlg"
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attribution: "New Distribution — https://xinjignxiao.com/en/articles/ailingshi-takes-control-of-local-chengdu-brand-snack-retail-industry-ent-d8ef76d2/"
citation: "任文青Andy. “Ailingshi Takes Control of Local Chengdu Brand, Snack Retail Industry Enters Merger and Integration Mode.” New Distribution, 2023-08-09. https://xinjignxiao.com/en/articles/ailingshi-takes-control-of-local-chengdu-brand-snack-retail-industry-ent-d8ef76d2/"
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---

# Ailingshi Takes Control of Local Chengdu Brand, Snack Retail Industry Enters Merger and Integration Mode

> On August 9, 2023, Ailingshi, a snack retail chain based in Changsha, announced it had taken control of the local Chengdu snack retail chain Konglongheteddy, bringing its store count in Chengdu to over 300 and in Sichuan to over 350, making it the second-largest local snack retail brand in Sichuan. On the same day, Snacks Busy announced a strategic investment of tens of millions of yuan in Qiahuopuzi, and the two will jointly consolidate advantageous regions and develop the national market. This signals that the snack retail industry has entered a phase of merger and integration as competition intensifies.

**Introduction: The future landscape of the snack retail industry will see new changes.**

**Author** | Ren Wenqing Andy
**Reviewer** | Gou Gou
**Layout** | Zhang Yuwei

On August 9, 2023, Ailingshi, a snack retail chain based in Changsha, announced it had taken control of the local Chengdu snack retail chain Konglongheteddy. With this, Ailingshi's store count in Chengdu reached over 300, and in Sichuan Province over 350, making it the second-largest local snack retail brand in Sichuan. On the same day, Snacks Busy announced a strategic investment of tens of millions of yuan in Qiahuopuzi, and the two will join hands to consolidate advantageous regions and jointly develop the national market.

In the first half of this year, there was a steady stream of financing news in the snack retail industry, followed by head enterprises accelerating cross-province expansion, while local players also entered the fray in various regions. Clearly, entering the second half of 2023, the pace of head brands' own expansion and store openings can no longer keep up with the pace of competition, and they have officially initiated a merger and integration model.

The overall scale of the snack industry exceeds one trillion yuan. According to the "2022 China Leisure Snack Industry Research Report," **over the past 7 years, the compound annual growth rate of China's leisure snack market has remained above 11%.** This is a large market. In 2017, Snacks Busy was established, and soon many players entered the snack retail sector. In the following years, **the development of snack retail stores can be described as meteoric.** In 2021, there were 2,500 stores with sales of less than 10 billion yuan. In 2022, there were 8,000 stores with sales of approximately 30 billion yuan. It is estimated that by the end of 2023, the number of stores nationwide will be between 22,000 and 25,000, with sales reaching 70-80 billion yuan. **Explosive growth will continue.** In the future, the total number of snack retail stores will exceed 100,000, and within two to three years, a single chain brand with 10,000 stores will emerge. This is also the reason why many capital and players are entering this track.

In 2022, leisure snack sales channels included supermarkets, mom-and-pop stores, e-commerce, hypermarkets, and convenience stores, accounting for 39.7%, 16.6%, 15.5%, 12.6%, and 7.7% respectively. Before 2023, as a new channel model, snack retail store brands were competing for market share in the above channels. **Entering 2023, while competing with other channels, internal competition within the industry is also accelerating. From self-expansion to merger and integration, this reflects the intense competition.**

According to information from New Distribution, many local chain brands with 100-200 stores are already seeking cooperation with head brands. From a development trend perspective, this may be a good outcome. With the crazy expansion of snack retail stores, good locations and stores are scarce, which inevitably leads to price wars. In many places, different brands are opening stores next to each other, and C-end price wars have already begun. Head brands are expanding, and some small and local brands find it hard to withstand, because they lack self-sustaining capabilities. A large brand can ship 10 million yuan a day and use one month's profit to fight; small brands simply cannot hold up. **Without economies of scale, investors, suppliers, and franchisees will not support them, and they will inevitably be eliminated.**

Regarding the competitive landscape of the industry, New Distribution believes: **As head brands accelerate expansion, the incremental market shrinks, market friction intensifies, and the industry enters a stage of same-industry competition earlier. C-end price wars lead to declining net profit margins for stores, and what players truly compete on is the scale and efficiency of the backend.** Currently, the snack retail industry is in a period of accelerated growth. Land grabbing and merger integration are ostensibly to lock in advantageous regions, but **in essence, it is for sales volume, for scale, and to win on efficiency in the future.**

At the end of last year and the beginning of this year, many players entered the market with local resources, the ability to quickly imitate, and enthusiasm to catch the trend. They quickly opened 100 to 200 stores. But in reality, many people, when they rushed into the battlefield, had no idea what kind of battlefield it was, how big the future war would be, what competitors they would face, and what resources they needed. The channel transformation brought by snack retail stores is essentially a victory of scale and efficiency. New Distribution predicts: **In the coming period, there will be more news of mergers and integrations in the snack retail industry.**

Ailingshi, which took control of Konglongheteddy this time, was founded in 2020 and has been deeply rooted in the Hunan and Hubei markets. Since this year, it has accelerated its national layout and currently has over 1,000 stores nationwide.

Founder Tang Guangliang worked in supermarkets for 9 years in his early years, then started the convenience store business Kuailehui, which at its peak had 8,000 stores. Later, he founded the FMCG B2B platform Xingaoqiao and the community group buying platform Kaola Selection. In 2020, Tang decisively withdrew from community group buying and entered the snack retail industry. As a frontline participant, he has his own thoughts and judgments about the industry: around 2020, it was the stage of natural growth for local brands; starting from the end of 2022, several major head brands began cross-province development. After about a year and a half of land grabbing, C-end price wars are inevitable; from August to the end of 2024, the market landscape will be initially set. **"By the end of 2023, if you haven't reached 800 stores, you basically have no future,"** Tang said. According to Tang's judgment of the market landscape, a province will have three strong players. Sichuan currently has Snacks Youming, and the head brand Snacks Busy has also entered. But the Sichuan market is large enough to accommodate three brands, each with 1,000 stores. Hunan and Hubei are Ailingshi's base, and Yunnan, Guizhou, and Sichuan are the rear. Sichuan is a must-fight place, and 1,000 stores in the province is its goal. This takeover of Konglongheteddy will accelerate the realization of its strategic goals. We will closely monitor how the future landscape of the snack retail industry develops.


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## Citation metadata

- Publisher: New Distribution
- Author: 任文青Andy
- Published: 2023-08-09
- Canonical: https://xinjignxiao.com/en/articles/ailingshi-takes-control-of-local-chengdu-brand-snack-retail-industry-ent-d8ef76d2/
- Original source: https://mp.weixin.qq.com/s/AROiUsi5YcO0fQtDDPjxlg

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