Bulk snack stores are taking over community entrances "The same sugar-free drink costs 1.5 yuan less here than at 7-Eleven." Zhou Heng, who lives nearby, quickly developed a new habit: after work, he takes a detour from the south gate of his residential complex to buy drinks at the newly opened Haoxianglai store at the entrance. He usually returns home via the east gate, where there is a 7-Eleven. But since discovering that this bulk snack store sells drinks cheaper, he rarely goes to the convenience store anymore. "I come here almost every day, mainly to buy drinks, sometimes snacks, and occasionally a blind box for the kids." This store opened just before the Spring Festival, previously operating as a fresh food store. It is located at the entrance of a residential community within the South Fifth Ring Road in Beijing, just a few steps from the residential area, with two primary schools and one middle school nearby. Such a location is almost ideal for bulk snack stores—it is close to living areas and has steady foot traffic. Stepping inside, it is easy to see that the business logic here differs from traditional snack stores. The most prominent spot next to the cash register is not snacks but egg tarts and grilled sausages. The refrigerated cabinets at the entrance are stocked with drinks, and many customers head straight there upon entering. Compared to bulk snacks, more people buy water and drinks, and cooked foods like sausages and egg tarts sell quickly. A staff member said that business has improved significantly since school started. During midday and early evening, students are the main customers, while office workers returning home come later. In terms of product composition, these stores are no longer like traditional snack shops. On the shelves, besides bulk snacks and drinks, there are laundry detergent, laundry beads, body wash, soap, and other daily cleaning and personal care products. Near the entrance, two display racks are specially set up to showcase blind boxes, anime merchandise, and children's toys, aiming to attract children to stay. On a weekend evening at 8:30 PM, the author visited the store and found nearly 20 customers browsing the aisles, many of them families or couples shopping together, more like a leisure activity after work or dinner. In the surrounding community, the elderly and children make up the majority of customers, with the occasional middle-aged person usually being a parent dragged in by their child. The customer profile is clear. This consumption scenario is also diverting some business from convenience stores. On the demand side, water and drinks have always been the most important traffic-driving products for convenience stores. Many consumers enter a convenience store to grab a bottle of water or a drink, and then pick up some snacks before checking out. Bulk snack stores attract this demand with lower prices. Such stores are rapidly increasing in Beijing. Bulk snack stores actually entered the Beijing market two years ago. In 2023, Zhao Yiming opened its first store in Fangshan; by October 2024, Haoxianglai opened its first store in Changping. But the expansion pace has accelerated noticeably in the past year. According to the author's check on Dianping, Zhao Yiming currently has nearly 80 stores in Beijing, while Haoxianglai has close to 200. Similarly, in Shanghai and Guangzhou, Haoxianglai has nearly 300 stores each, with denser distribution, and the store locations are gradually expanding from beyond the Fifth Ring Road to more urban areas. As the number of stores increases, these bulk snack stores are increasingly appearing near community entrances, directly competing with convenience stores and community supermarkets. In first-tier cities, what bulk snack stores are competing for is not just the snack business but also the entry point for daily community consumption. Many customers initially come just to buy a drink that is one or two yuan cheaper, but after entering the store, they often pick up a few packs of snacks as well. Why the collective push into first-tier cities Over the past two years, the bulk snack business has continued to grow rapidly. Take Mingming Henmang as an example. According to its prospectus data, as of December 31, 2024, the proportion of stores in first-tier and new first-tier cities, second-tier cities, and third-tier and below cities was 17.6%, 13.5%, and 68.9%, respectively. Nearly 70% of stores are still in third-tier and below markets. Bulk snack stores first proved their model in lower-tier markets. The eye-catching colorful storefronts, larger store areas, dense SKUs, and significantly lower prices easily attract consumers. In some county town commercial streets, it is common to see more than one bulk snack store on the same street, with boxes of drinks or snacks piled at the entrance for promotions, and most customers are nearby residents and students. In county towns and third- and fourth-tier cities, rent and labor costs are lower, and consumers are more price-sensitive, which further amplifies the cost-effectiveness advantage of bulk snack stores, naturally accelerating their expansion. However, as the number of stores grows, some changes have begun to emerge. On social media platforms, some franchisees have said that while their business was initially good, after a competitor opened nearby, foot traffic was quickly diverted. Sometimes, two stores are only a hundred meters apart, and if the new store is slightly farther from an intersection or school, business can be noticeably worse. In many second- to fifth-tier cities, competition is no longer about "whether there is a market" but "whether you can still grab a good location." Some franchisees describe that finding a storefront is often harder than opening the store itself. By the end of 2025, Mingming Henmang and Wanchen Group had over 22,000 and 19,000 stores respectively, with a combined market share of nearly 80%. As store density increases, lower-tier markets are becoming crowded. Against this backdrop, expanding into first-tier cities has become a new direction for growth. Now that the marginal returns in lower-tier markets are gradually declining, high-tier cities have become one of the few markets with remaining growth potential. Although the proportion of stores in first-tier cities is still low, the pace of store openings shows that leading brands have clearly accelerated. Another practical factor is rent. Bulk snack stores operate on thin margins and rely on inventory turnover. The cautious approach to first-tier cities in the past was largely due to high rent and labor costs. But over the past year, retail property rents in Beijing have dropped significantly. According to JLL data, effective first-floor rents in Beijing fell by 9.5% year-on-year in 2025, cumulatively down 28% from the 2019 peak. At the same time, a number of community tobacco and alcohol stores are exiting the market. According to the China Tobacco and Alcohol Circulation Association, the number of tobacco and alcohol stores nationwide decreased by about 19% in 2025, equivalent to a reduction of approximately 320,000 stores in one year. These stores were originally located at community entrances, close to residents, with stable surrounding foot traffic. Many people would pop in to buy small items like drinks, snacks, or tissues. As rents fell and vacancies appeared, bulk snack stores gradually took over these locations. On the other hand, consumer shopping habits are also changing. In previous years, many people valued brand or shopping environment when making purchases, but now many people check prices first. As long as the products are not too different, they hesitate to spend a few extra yuan. The fact that bulk snack stores have expanded from county towns to high-tier cities is also related to this trend of emphasizing cost-effectiveness. Why they are starting to become "discount supermarkets" While accelerating entry into first-tier cities, bulk snack stores are also undergoing changes, and the products they sell are no longer just snacks. Take Haoxianglai as an example. In the past, stores mainly sold bulk snacks, drinks, and dairy products, but now shelves include tissues, daily chemicals, sausages, baked goods, and more. Some stores have added stationery, blind boxes, and trendy toys, and the proportion of private label products is also increasing. Some Zhao Yiming stores have made similar adjustments, adding daily chemicals, fresh food, low-temperature frozen products, and baked goods alongside snacks. As a result, the role of the store has shifted slightly. In the past, they were more of a place to buy snacks; now they are beginning to serve the function of daily community replenishment. Some of these products are aimed at increasing purchase frequency. Snacks are often bought on a whim or in bulk, not particularly high-frequency. Products like tissues, personal care, drinks, and instant food are different—they are everyday necessities. If stores can capture this demand, customer visits will naturally become more stable. Other products are related to profit, such as stationery, blind boxes, and private label items. Bulk snack stores have always emphasized low prices, but low prices also mean limited profit margins. In first-tier cities with higher rent and labor costs, if stores only sell low-margin snacks, operating pressure will increase significantly. Adding products with higher margins and higher average transaction values also creates room for the store. For leading brands, this expansion is not entirely unfamiliar. In the past few years, the rapid expansion of bulk snack stores has largely relied on direct factory connections, compressing intermediate links, and gradually building warehousing and logistics systems. Now extending into daily chemicals and paper products, although the span is larger, the existing supply chain can still partially support it. However, the operating environment in first-tier cities differs from lower-tier markets. Communities, schools, subway entrances, and office areas all have foot traffic, but consumer demands vary greatly. Community stores are closer to family replenishment scenarios, small-pack snacks and stationery sell faster near schools, and office areas lean toward immediate consumption. Currently, many bulk snack stores do not have significant differences in product structure. Some stores sell almost the same products as those in lower-tier markets. In small cities, this standardization facilitates replication; but in Beijing, Shanghai, and Guangzhou, demand is more fragmented, and if the same product selection logic is still used, problems will gradually emerge. With the increase in categories, store management becomes more complex. When only snacks were sold, replenishment, display, and inventory were relatively simple; now with low-temperature, daily chemical, and daily necessities, turnover efficiency, out-of-stock rates, loss control, and staffing become more sensitive. After entering first-tier cities, bulk snack stores are competing not only on price but also on location selection, product selection structure, and store operation levels. The stores may still look like snack shops, but in first-tier cities, they are transforming from "snack stores" into new community retail entry points.