---
title: "Changes in Offline Channels Should Not Be Underestimated: FMCG Must Keep Up or Be Left Behind!"
description: "In the past two years, besides the rise of online channels, changes in offline channels for FMCG have been significant. For FMCG companies, channels are crucial to present products to consumers. Since the reform and opening-up, channels have been divided into traditional (wholesale markets, grocery stores) and modern (hypermarkets, supermarkets, convenience stores). Now, new offline formats like convenience stores, specialty stores, vending machines, and unmanned supermarkets are emerging, reshaping the retail landscape."
author: "丁忠卫"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2017-12-10"
language: "en"
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# Changes in Offline Channels Should Not Be Underestimated: FMCG Must Keep Up or Be Left Behind!

> In the past two years, besides the rise of online channels, changes in offline channels for FMCG have been significant. For FMCG companies, channels are crucial to present products to consumers. Since the reform and opening-up, channels have been divided into traditional (wholesale markets, grocery stores) and modern (hypermarkets, supermarkets, convenience stores). Now, new offline formats like convenience stores, specialty stores, vending machines, and unmanned supermarkets are emerging, reshaping the retail landscape.

> From the changes in the past two years, besides the addition of online channels, changes in offline channels for FMCG should not be underestimated.
For FMCG, the importance of channels is self-evident. For enterprises, to present their products to consumers, they must go through some channel.
In the more than 30 years since the reform and opening-up, especially in the latter 20-plus years, channels have been roughly divided into traditional and modern. Traditional channels mainly refer to wholesale markets, fairs, grocery stores, small shops, etc.; modern channels refer to hypermarkets, supermarkets, chain convenience stores, specialty stores, etc.
In recent years, e-commerce has flourished in other industries, but because most FMCG products are impulse purchases—like beverages, which you only think of when thirsty and want to drink immediately—e-commerce has struggled to make inroads in FMCG. This is the main reason FMCG companies and practitioners have been least impacted by the internet.
Being least impacted does not mean channels haven't changed. Whether we blame real estate or the disorderly development of online channels, the world has changed, and channels have changed. We should study the changes rather than seek causes.
From the changes in the past two years, besides the addition of online channels, offline channel changes are significant. FMCG companies and practitioners must face and embrace these changes, as offline marketing models and business thinking must adjust according to channel changes.
**I. The Rise of Convenience Stores**
Convenience stores were introduced to China in 1990. Since their business model was ahead of its time for China, with high prices and 24-hour operation not attractive, they developed slowly.
After 2002, with rising consumption levels and richer nightlife, chain convenience stores like 7-Eleven, Watsons, and Quik began opening aggressively, gradually gaining consumer acceptance and attention from FMCG practitioners. However, due to high rents, logistics, corporate attention, and consumer habits, convenience store development in China remained slow.
According to the National Bureau of Statistics, by 2011 there were over 13,000 convenience stores, with annual sales of 22.6 billion yuan and over 1 million employees. However, convenience store sales accounted for only 6.5‰ of total chain retail sales (about 3.5 trillion yuan) and 1.2‰ of total social retail sales, far below Japan's 6.6% and the US's 5%.
In recent years, internet prosperity, e-commerce rise, and smooth logistics have changed consumer habits. With faster-paced lives in first- and second-tier cities and rising living standards, convenient and time-saving convenience stores have entered a high-speed development phase. The integration of Alipay and WeChat Pay, plus services like breakfast, package collection, and transit card top-ups, have made more people rely on convenience stores near homes, transport hubs, and offices.
Previously deserted, now queues at checkout; previously orders of half a box per store, now thousands of pieces; previously weak sales, now considerable profits per store—convenience stores are experiencing their best period. If current placement and growth speed are any indication, they are far from meeting urban demand. Before 2020, the growth potential is significant.
With global giants like 7-Eleven and Lawson, and e-commerce giants like Alibaba, JD, and Suning piling in, JD's million-store plan alone shows how hot convenience stores are.
**II. The Explosion of Specialty Stores**
Once, specialty stores were unique to durable goods like clothing, shoes, 4S stores, and electronics.
Around 2004, maternal and child specialty stores emerged. Due to historical reasons, Chinese people's love for the next generation is extreme, choosing only the most expensive for baby products. These stores thrived with rising demand for milk powder and diapers.
Around 2007, snack food specialty stores entered consumers' view. Although Hong Kong's "Yuu Jai Yuen" had some presence, it didn't take root and exited quickly. In 2010, Lai Yifen began large-scale expansion in Shanghai and Zhejiang, driving the sprouting of snack specialty stores nationwide. By 2014, local owners formed a snack food alliance, promoting the growth of small and medium food enterprises.
The explosive growth of maternal and snack specialty stores shows, on one hand, that consumer demand is more direct and concentrated; on the other, that quality requirements are higher; and importantly, that consumers demand professional service and a sense of being valued—what online calls experience and fan economy.
These stores not only meet purchase needs but also offer one-stop service. Such FMCG sub-channels will become more numerous and precise, like dessert shops, fruit stores, bakeries, and ice cream shops. FMCG manufacturers and practitioners must consider how to connect and serve these growing sub-channels.
**III. Vending Machines Everywhere**
Vending machines are a new retail form, developed in Japan and the West in the 1970s, also called 24-hour mini supermarkets. In Japan, 70% of canned beverages are sold via vending machines. Coca-Cola has 500,000 beverage vending machines worldwide.
From entry into China around 2000 to 2011, the number grew from zero to 10,000. But from 2011 to now, machines selling traditional products grew from 10,000 to 200,000, with thousands for orange juice and coffee, and huge space remains. From occasional airport sightings to now common in airports, stations, malls, and campuses, vending machines are rapidly entering our lives with capital backing.
Vending machines share convenience store features: high price, convenience, time-saving—matching consumer habits and needs. Companies like Ubox, partnering with Alipay and WeChat Pay, enable online and offline payment and purchase, truly bridging online and offline. Estimates suggest, including amusement machines like claw machines, domestic vending equipment could reach 2 million units: claw machines alone around 1 million, and with capital support, vending machines reaching 1 million is not difficult.
**IV. Unmanned Supermarkets: Half-Revealed**
Another hot format is the unmanned supermarket. Recently, BingoBox in Shanghai sparked industry discussion. Jack Ma and Zong Qinghou, representing online and offline, plan to jointly create unmanned supermarkets, opening 100,000 in 3 years and 1 million in 10 years. But in practice, more talk than action. Amazon Go was the first, and compared to it, BingoBox still has a payment step. While the future is promising, the settlement system and anti-theft technology need improvement.
Currently, there are three main technical approaches: one scans palm prints at entry, uses visual recognition to identify items taken, and auto-debits on exit; another looks like a store but is actually a combination of vending machines; a third requires scanning a QR code to enter, each item has a tag, and if any item isn't paid for, the checkout alarms. Many technical solutions exist, but finding a balance between technology and experience is a key research area.
In short, whether traditional supermarkets and hypermarkets accept it or not, domestic retail is undergoing massive transformation, highlighted by the emergence and capital enthusiasm for chain convenience stores, vending machines, and unmanned supermarkets.
Among convenience stores, 24-hour ones are only a part; most operate from 8 a.m. to 10 p.m. For these, a vending machine could cover nighttime shopping needs, making vending machines a supplement in time and location. These three (or two) formats will integrate, complement, and compete. For example, Ubox is venturing into unmanned supermarkets, and 7-Eleven and Lawson have opportunities to use their supply chains for vending machines.
The refinement and increase of channels—specialty stores, convenience stores, vending machines, unmanned supermarkets—are products of the internet information age and a catalyst from internet finance's prosperity on offline retail. FMCG companies and practitioners should actively face channel changes, adjust marketing thinking and models, and remain invincible in the channel revolution.
Introduction: Ding Zhongwei: Senior food marketing expert, 20 years in food marketing and training, served at Hsu Fu Chi, Golden Monkey, Yake, Jinguan, etc., Executive Director of China Snack Food Professional Committee.
Email: devy66663@163.com
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