---
title: "Bianlifeng | Why Is It Still Profitable in the \"Winter\"?"
description: "Bianlifeng, a convenience store chain, has achieved overall profitability for its over 500 stores in Beijing despite the industry's downturn. The company's success is attributed to strict store management, digital innovation, and the use of algorithms to replace human decision-making, enabling rapid expansion and profitability."
author: "可雅"
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published: "2020-11-22"
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# Bianlifeng | Why Is It Still Profitable in the "Winter"?

> Bianlifeng, a convenience store chain, has achieved overall profitability for its over 500 stores in Beijing despite the industry's downturn. The company's success is attributed to strict store management, digital innovation, and the use of algorithms to replace human decision-making, enabling rapid expansion and profitability.

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**Introduction: Will companies like Bianlifeng change the rules of the game in the industry and lead it onto another track?**
According to the laws of the convenience store industry, it generally takes seven years for a single store to become profitable, and for a convenience store company to achieve overall profitability, it may be even more distant. For example, many established convenience store companies have not yet announced overall profitability. Affected by the epidemic, many convenience stores have entered a business winter this year, and some have even closed down. Recently, news from Bianlifeng indicated that **over 500 Bianlifeng stores in the Beijing area have achieved overall profitability.** Notably, Bianlifeng's profitability is overall, not just at the level of individual stores or operations.
Since its birth more than three years ago, Bianlifeng has been on a fast track, now operating over 1,500 stores in 20 cities nationwide. How does Bianlifeng achieve rapid expansion and profitability through refined operations?
**-0****1-** **Strict Store Management**
Bianlifeng was established on December 21, 2016, and opened its first store in February 2017. The core founding team is almost entirely from Qunar. The founder of Bianlifeng is Zhuang Chenchao, former CEO of Qunar, known by the media as a "genius geek." He graduated from Peking University with a degree in Electronic Engineering and won a national math gold medal in junior high school. Zhuang Chenchao pointed out in an internal email: "The mathematical logic ability of every headquarters employee is particularly important for the convenience store business. The convenience store business requires a large number of small decisions based on mathematical logic evaluation every day." Most of Bianlifeng's internal systems are self-developed, and there is a dedicated architecture department for upgrades and maintenance.
Inside Bianlifeng, mathematical logic ability is strongly emphasized. In early 2019, the company was exposed to the news that "employees are required to take a math test, and those who fail are fired."
 ▲Founder Zhuang Chenchao
Zhuang Chenchao's response was, "The convenience store business requires a large number of small decisions based on mathematical logic evaluation every day. If mathematical logic is not good, performance is difficult to meet expectations." Under such rapid iteration, higher demands are also placed on store managers and staff.
Bianlifeng store managers generally hold biweekly meetings, with a major iteration every two weeks. The internal learning and communication software sends SOPs almost daily as learning tasks, and a dedicated department conducts assessments.
"Our operations head once said that if a store manager misses work during an iteration peak, they may fall behind in a few days," an insider said.
In addition, Bianlifeng selects several customers as mystery shoppers, asking them to visit stores and rate the service.
Taking "smile service" as an example, initially it included requirements like "how many teeth to show," but later iterations only required saying "thank you." "Many store managers left because of this factor," a convenience store employee revealed. However, he also mentioned that employees can appeal by retrieving video footage.
Based on various indicators, stores are ultimately classified into three grades: A, B, and C. If a store gets an A, it receives rewards such as high commissions; if it gets a B, there is no reward or punishment; if it gets a C for two consecutive months, the store manager is eliminated.
**-02-** **Digital Innovation**
The core reason Bianlifeng can respond to and meet market demands in a timely manner lies in the true capability behind the "internet celebrity maker"—**digitalization**. Bianlifeng founder Zhuang Chenchao once said bluntly that the responsibility of Bianlifeng engineers is to continuously model and program, while the only thing store managers and staff need to do is absolutely obey the computer's instructions. In this sense, **every Bianlifeng store is a "unmanned store"**. Here, "unmanned" does not mean no service, but no decision-making. The central brain analyzes input data, performs statistics, analysis, attribution, and calculation, and then outputs effective decisions. "Simply put, our approach is to analyze all processes in convenience store work, abstract them, find patterns, establish algorithms, and let computers make decisions." What prompted Bianlifeng to take this extreme path of dehumanization?
When Zhuang Chenchao decided on his next entrepreneurial direction in 2016, he conducted an in-depth study of China's convenience store industry. After extensive research, he found that there were two main reasons why players in the convenience store industry found it difficult to scale up. First, the standardization of store architecture was low, with each store looking different, leading to high design costs, long lead times, and the inability to replicate designs on a large scale. Second, the revenue scale of convenience stores was small, making it difficult to afford high-level, highly educated franchisees. Traditional convenience stores rely heavily on the experience and ability of store managers. What products should be stocked? How much to order each day to have enough for the next day without waste? How to schedule the limited staff to handle peak periods without having too many during off-peak times? How to adjust the schedule if someone takes leave to avoid gaps? Should hot dishes be replenished when they are almost sold out? Should meat or vegetable dishes be replenished? These trivial issues test the store manager's judgment and affect the survival of the convenience store. Because there are not enough good store managers and training takes time, it is difficult for convenience stores to expand rapidly. To change the status quo, Zhuang Chenchao believed there was only one solution: to use algorithms extensively to replace people in the entire convenience store operation process. Because "every node with a person leads to a decrease in efficiency," it is better to use an efficient central brain to replace the store manager's thinking and decision-making, letting humans simply serve and machines simply calculate and decide. At Bianlifeng, this data-driven, algorithm-based automated decision-making system is interlocking, like a set of closely fitting flywheels. They are applied in various modules, including store location selection, design and decoration, store manager training, product selection, ordering, pricing, employee scheduling, as well as self-produced product manufacturing, logistics, and sales, together driving the high-speed operation of the Bianlifeng machine. Digitalization is also reflected in long-term monitoring of external data and refined internal data operations. Long-term monitoring of external data ensures that Bianlifeng can detect market trends in a timely manner. During the R&D process, the collection and analysis of user preference data ensures that Bianlifeng can more accurately judge market feedback. On the basis of digitalization, the methodology for creating internet-famous products actually lands on two core capabilities: **one is the ability to develop and select products, and the other is the ability to control the supply chain. Both capabilities are built on digitalization.** Market trends and user preferences change rapidly; what is hot today may be forgotten tomorrow. But in offline retail, whether it is R&D or product selection, it is not a task that can be completed overnight. This requires the retail team to have the predictive ability to see the big from the small, to capture key products or elements early when trends are emerging, so as to leave sufficient time for subsequent product selection and R&D. This is inseparable from a team's data mining and analysis capabilities. Similarly, to have control over the supply chain, the sales channel's own insight into the market is one aspect, and past sales performance is also a source of confidence. This requires channels like Bianlifeng to be able to accurately select products and precisely target suitable distribution areas to achieve higher conversion efficiency. These points actually all rely on a digital foundation. Even in SKU (stock keeping unit) management, there is a big difference from traditional convenience stores. First, subjectivity is greatly reduced, and it can more directly reflect market changes. In the past, SKU management in convenience stores, although supported by sales data, ultimately left the decision in the hands of experienced store managers. In digital convenience stores, this decision-making power is completely handed over to algorithms. **The fundamental reason for automated, algorithm-based decision-making is that Bianlifeng's algorithms themselves can produce better results.**
**-03-** **Using Algorithms to Replace People**
Removing subjective factors from decision-making is not something Bianlifeng proposed first. Traditional convenience store brands like 7-Eleven also try to reduce the arbitrariness of personal subjective judgment in product selection and R&D by quantifying taste scores. But today's digital convenience stores go further: **they directly hand decision-making power to data, using big data to completely remove "personal" factors from the decision-making process. This makes the entire decision-making more reliable through technical means.** In addition, the advantages of digitalization are also reflected in more agile operations. Traditional convenience stores update products on a monthly or even quarterly basis. Under the digital approach, Bianlifeng can achieve a 20% turnover rate weekly: the system automatically retains high-selling items and eliminates low-selling items within the same category based on the sales of each store's various products. New products include those independently developed by Bianlifeng based on data from the entire network, as well as those actively recommended by suppliers. Similar to small-scale traffic testing for internet products, new products are first launched in small batches in some Bianlifeng stores, and then the promotion intensity is adjusted based on sales feedback. This operation also allows Bianlifeng to quickly discover and list internet-famous products, quickly test their performance in different stores, and respond quickly to market trend changes. Agile operations are also one of the core competitiveness for creating an "internet celebrity maker." At the same time, the value of digitalization is also reflected in improving management and operational efficiency and reducing cost losses. In digital convenience stores, automated product selection and ordering reduce the loss of short-shelf-life products, especially in the fresh food category. Convenience stores have a large number of short-shelf-life products, and all products need to be ordered according to different times, weather changes, regions, and climate needs. Fresh foods like fast food and hot meals need to be produced in advance; too much is waste, too little is a pity. In Bianlifeng's backend ordering interface, each store has about 2,000 types of products, with over 300 daily distribution items. The data is very complex, and it is basically impossible for an individual to accurately analyze and input/output data for over 300 items every day. Especially when other environmental factors are added, judgment becomes even more difficult. The simplest example is that on rainy days, sales of fast food and fresh food in street-facing stores decline; but for stores in office buildings, because office workers find it inconvenient to go out and delivery is more difficult, sales of fast food and fresh food actually increase. This is just a simplified case. With more complex environmental factors, even experienced store managers face great challenges in making judgments based on data, and it is even more difficult for grassroots employees to make decisions based on comprehensive considerations. Therefore, Bianlifeng's ordering decisions are completely left to data, which actually reduces the requirements for personnel capabilities—during rapid expansion, this also allows Bianlifeng not to be limited by the major hurdle of hiring. The data performance of products also has an important impact. Bianlifeng uses its own historical data, as well as data from social media and food review websites, to identify the most popular dishes among consumers. After this data is synchronized to the fresh food R&D department, R&D personnel then consider factors such as fresh food production processes, freshness, and price to determine which products are most likely to achieve better results in terms of sales, profit, and other indicators, and then conduct R&D based on the predicted data performance.
**-04-** **Innovation Driving Traffic**
Sales are not the only indicator for judgment. Different products actually play different roles in attracting new customers, activating existing ones, and converting. Creating such a seasonal limited-edition innovative product is certainly not for sales, but more to bring freshness to consumers, provide them with novel and diverse choices, and stimulate them to visit stores. From the final results, consumers are also willing to try these innovative products. The somewhat "weird" spicy hot pot latte sparked considerable discussion on social media, became a hot topic, and ultimately boosted product sales beyond expectations. Behind these "internet-famous" limited-edition coffees at Bianlifeng is not just a complete methodology for discovering and creating "internet celebrities," but also the result of digital transformation in product selection and R&D in convenience store operations. The previously lengthy process of planning, R&D, product selection, and testing feedback has become a digital, automated process that can quickly capture market dynamics, quickly produce and select products, and then quickly test market feedback, truly different from traditional SKU management solutions, forming new competitiveness. And only such new-style "internet-famous" product creation solutions can truly keep up with consumers' ever-changing preferences, moving from passive following to active leadership of consumption trends. Will companies like Bianlifeng change the rules of the game in the industry and lead it onto another track? However, Bianlifeng's official view is this: "Our goal is certainly not to open a few hundred stores in Beijing, make some money, and be done. We hope to become a big refrigerator in people's life scenes, from the doorstep to the office door. We hope that density can increase frequency and loyalty. From this perspective, you can understand that Bianlifeng hopes to become a high-density infrastructure."
Source: Consumption Circle (ID: xiaofeijie315) Author: Ke Ya


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