---
title: "Bulk Snack Retail Enters the '10,000-Store Era': Where Does the End of Retail Industry Involution Lie?"
description: "This article first explains the essence of the bulk snack retail business, then analyzes why Maiming Henmang became the first to reach 10,000 stores, and finally discusses the profound impact of this milestone on the retail market structure, predicting a transformation towards discount supermarkets and a reshaping of the industry."
author: "戚特"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2024-06-14"
language: "en"
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# Bulk Snack Retail Enters the '10,000-Store Era': Where Does the End of Retail Industry Involution Lie?

> This article first explains the essence of the bulk snack retail business, then analyzes why Maiming Henmang became the first to reach 10,000 stores, and finally discusses the profound impact of this milestone on the retail market structure, predicting a transformation towards discount supermarkets and a reshaping of the industry.

******First, let me lay some groundwork: what is the essence of the bulk snack retail business?** Every time I go to county towns for research, the most frequently asked questions are three: 'Can I franchise a Bawang Chaji?', 'Can I franchise a Tastien?', and 'Can I franchise a Snacks Busy?'. Actually, when asked these questions, I am quite surprised. Because the bulk snack retail business is completely different from milk tea, but I find that many people have no understanding of this, thinking that franchising a bulk snack store is the same as franchising a milk tea shop—both are hot commodities, with similar store construction costs, and both are the most eye-catching on the street. The biggest difference between snacks in the retail industry and milk tea in the catering industry is: one has a gross margin below 20%, the other above 50%. What is the difference? Taking tea drinks as an example, due to the difference in gross margin, tea drinks only need to make 4,000 to break even, but bulk snack stores need 8,000 to break even. Even with the same 10,000 yuan in sales, the profitability of bulk snack stores cannot compare with that of tea drinks. A tea shop making 10,000 a day can earn tens of thousands a month, but a bulk snack store making 10,000 a day can only just break even. The biggest misconception many people have about bulk snack stores is not understanding it as a retail industry. When the Snacks Busy model came out, I was shocked. A standard 150-square-meter store averaging 15,000 yuan in daily revenue—this sales per square meter is extremely rare in the global retail industry. More importantly, it only does snacks as a single category. For a single-category retail store to achieve such data, based on my understanding, I can only define it as 'phenomenal'. But how long this 'phenomenon' can last, I think, requires continuous observation. **So from my perspective, the success of bulk snack retail can only be attributed more to seizing the 'right timing'. This 'right timing' I believe is a series of dividends, including the contraction of consumer spending due to the macroeconomic environment, and channel changes driven by overcapacity, etc.** I have discussed this in my previous articles, so I won't repeat it. Because of this, as more competitors enter the industry, and as more new comprehensive discount formats emerge, a single-category new discount snack store will inevitably face pressure. Therefore, we can see snack store brands continuously increasing investment in marketing, constantly making new moves for more attention-grabbing marketing, including Snacks Big, Snacks Spicy, sponsoring Hunan TV, etc. Their approach is very close to the branding strategy of tea drinks, which is unprecedented in the entire retail industry. Why do such heavy marketing moves? In my view, the reason is that the category is too single. So in the long run, you must continuously do marketing to attract consumers to the store, so that most stores can at least support revenue above 10,000. All the moves Snacks Busy is making today, I call it 'internet-famous retail', which is a good thing but also a bad thing.
******What did Maiming Henmang do right? Why was Maiming Henmang the first to break 10,000 stores?** Of course, first is the team of President Yan and President Zhao, who have many unique advantages compared to other competitors. Henmang is clearly superior to peers in efficiency and store refinement.
But these 'tactical' aspects are not the core reason for Maiming Henmang breaking 10,000 stores. The real core reason is still 'right timing'. At the 'tactical' level, Maiming Henmang becoming the first to break 10,000 stores is definitely not due to refined operations. In this track, who becomes the first to reach 10,000 stores and becomes the industry leader is just 'racing against time, racing against scale, racing against capital'. Whoever opens the most stores and raises the most capital in the fastest time, the war in this track is already over. In the long run, the space for the third to tenth players in this track will be greatly compressed.
******From an industry perspective, what is the profound impact of Maiming Henmang breaking 10,000 stores on the retail market structure?** The emergence of the bulk snack retail industry has had the biggest impact of stirring up a pool of stagnant water, and breaking 10,000 stores means the retail industry will undergo more profound changes. **We know that the circulation of consumer goods generally falls into three types. The first is manufacturer to distributor to retailer to consumer. The second is manufacturer to retailer to consumer, bypassing the distributor. The third is manufacturer directly to consumer, bypassing both distributor and retailer. This is generally called DTC (Direct to Consumer) abroad.** Due to China's national conditions and historical reasons, the mainstream circulation method is the first. But the drawbacks of this method are obvious: **the circulation path is too long, with too many profit distribution links, leading to excessive product markups, and further, the final pricing to consumers is relatively high.** The core value of distributors as an intermediate link is reflected in breaking bulk, discounts from large-volume purchases, helping complete inventory and warehousing transportation, and providing capital credit terms. But when a new retail format suddenly appears downstream, which increases single-item purchase volume by streamlining SKUs, you will find that the three major functions of distributors—breaking bulk, discounts from large-volume purchases, and helping complete inventory and warehousing transportation—are all transferred to the retailer. If this retail format also purchases directly from manufacturers with cash, the distributor's capital credit function is also transferred to the retailer. So breaking 10,000 stores means the retail industry will undergo more profound changes. This change means that part of China's consumer goods circulation will shift from the first to the second method. **Specifically, my prediction for the industry is as follows:** In my previous article, I mentioned: 'Today's bulk snack stores, although called snack stores, have a category width very close to convenience stores, only lacking cigarettes and cooked food, the two core profit items. So if bulk snack stores continue to expand into wider categories in the future, they will unprecedentedly compress the space of China's existing community retail convenience system.' But I believe the first to expand categories will not be Maiming Henmang, but other peers. Because Maiming Henmang has already ended the battle in the single discount category track of bulk snacks. **In the future, the space for more single-category bulk snack stores will be further compressed, forcing them to be the first to transform into multi-category discount supermarkets. Because a single-category discount format cannot accommodate so many players.** Judging from all current moves of Maiming Henmang, it will not expand categories in the short term. The core reason is the need to further penetrate consumers' minds as the first discount brand for snacks. At the same time, management needs to consider whether expanding categories would dilute consumers' perception of its snack kingdom. **So this is the first step: some single-category bulk snack stores begin to transform into multi-category discount supermarkets. The second step: the share of the traditional retail industry will be squeezed by more discount supermarkets, forcing more traditional retail supermarkets to transform into discount supermarkets. The third step: the market structure of the retail industry will be reshaped. Due to the overall compression of traditional retail space by discount retail, traditional retail will re-find its own new value positioning based on its own capabilities.** After extensive research, we have summarized four strategies that traditional retailers adopt when responding to the impact of discount retail: price reduction counterattack strategy, downgrade strategy, price reduction counterattack strategy, and value definition strategy.
So how exactly will it be reshaped, and what changes will occur? **Let's return to this retail industry value positioning map.** With the rise of discount formats (including hard discount, soft discount, brand discount, and warehouse membership models), traditional retailers need to re-find their ecological niche and value positioning. Supermarkets, hypermarkets, and convenience stores will be hit the hardest in this change, because the first two are already in the most involuted red ocean track. **First, general supermarkets will transform into food supermarkets.** In China, the future positioning of supermarkets must be based on fresh produce and pre-prepared processed dishes, as the main place for providing three meals a day, which is certain to exist in East Asian countries. So in the future, the space and value positioning of supermarkets will shift more towards deep operation of non-standard fresh produce and pre-prepared processed dishes, which will become their core barrier. **Second, hypermarkets.** In China, due to their value positioning highly overlapping with online e-commerce, both being one-stop shopping long-tail needs, their future space will continue to shrink and may even basically disappear. **Third, convenience stores.** They will be divided into two parts: traditional convenience stores and mom-and-pop stores below third-tier cities will see their future space continuously compressed; while in first- and second-tier high-line markets, convenience stores have a relatively comfortable survival space. The future positioning of convenience stores will be for immediate needs, with main categories being cooked food, simple meals, beverages, cigarettes, etc. So in the future, convenience stores will need to think about how to continuously innovate in simple meals and cooked food while compressing costs. **Fourth, premium supermarkets.** Regarding premium supermarkets, I believe new opportunities will emerge during the cycle of discount retail channel changes. I have also done a lot of research here and found a very interesting phenomenon: the high-price system impacted by hard discount is actually not the top premium supermarkets; premium supermarkets are actually doing okay. The biggest impact is on traditional supermarkets that have high prices, average service, and no highlights. So I have always said that consumer demand must be diversified; there is no such thing as comprehensive consumption downgrade in this world, nor will there be comprehensive discounting.
What changes are happening in the retail discount field? What other ways out are there? What good cases can we learn from? What dialogue and collaboration are needed between upstream and downstream of the industry chain?
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**Recommended reading**


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