---
title: "Cheaper than Pinduoduo, snack stores that have filled county towns are now vying for the wet market business"
description: "Snack discount stores, once filled with young people, are now attracting more middle-aged and elderly customers. These stores are expanding beyond snacks into daily necessities and groceries, adopting a 'hard discount' model to compete with traditional supermarkets and e-commerce platforms."
author: "王崭"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2024-10-14"
language: "en"
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# Cheaper than Pinduoduo, snack stores that have filled county towns are now vying for the wet market business

> Snack discount stores, once filled with young people, are now attracting more middle-aged and elderly customers. These stores are expanding beyond snacks into daily necessities and groceries, adopting a 'hard discount' model to compete with traditional supermarkets and e-commerce platforms.

Wang Zhan

"It's a bit cheaper than Pinduoduo." Snack discount stores, once filled with young people, are now attracting more middle-aged and elderly customers. In Wuhou District, Chengdu, more than 600 meters from Fangcao Street Metro Station, the sign of "Lingshi Youming Wholesale Supermarket" is the most eye-catching—the orange sign covering the entire storefront can be seen from a hundred meters away. The nearby seven or eight old residential areas are densely populated, and not far away is Yulin Road, which is most suitable for Chengdu's "citywalk," attracting young people and tourists. In the supermarket, on one side, many customers weave through the shelves selecting various low-priced grains, oils, rice, and flour; on the other side, young people gather to choose their favorite snacks. According to Lingshi Youming itself, "Lingshi Youming Wholesale Supermarket" is the 4.0 version of its stores. The brand is now entering the hard discount full-category wholesale supermarket business, selling snacks alongside grains, oils, rice, flour, and daily necessities, with the enticing slogan "One piece is also wholesale price."

For Lingshi Youming and the snack industry, operating "wholesale supermarkets" is about entering new business formats, exploring more possibilities, and telling a more sustainable business story. Before 2023, the snack industry's story was dominated by new consumer brands like Three Squirrels, Baicaowei, and Bestore, which rose on e-commerce platforms riding the wave of consumption upgrades. After 2023, the story has been taken over by snack discount brands. Snack discount stores have expanded from first-tier cities to county towns, capturing young people's attention through rapidly growing offline stores.

This is a high-growth track, and most players are young: Haoxianglai was founded in 2011, Zhao Yiming in 2015, Snack Busy in 2017, and Lingshi Youming in 2019... Through extreme cost-effectiveness and rapid expansion of offline stores, snack discount stores have spread across the country. Stories of various snack discount brands "wrestling" are common, from competing for locations and price wars to poaching each other's franchisees to "switch brands" (often by offering subsidies to get competitors' franchisees to reopen under their own brand). The market is becoming increasingly competitive. Now, snack discount stores are no longer just engaging in price wars; they are quietly applying the "discount science" of hard discounts to more categories, attempting multi-format and multi-channel strategies. They not only want to maximize the traffic brought by snacks but also "cross over" to compete for business.

**"Offline Pinduoduo"**

**Vying for Supermarket Business**

It's hard to simply categorize "Lingshi Youming Wholesale Supermarket" as a "snack discount store." In a space of about 200 square meters, although the only fresh produce is eggs at 21.9 yuan for 30, one side has various discounted snacks, and the other has grains, oils, rice, and flour. The shelves contain not only shrimp crackers, potato chips, and coffee liquid but also tissue, toothbrushes, and body wash. The "discount science" of snacks, which is cheaper than Pinduoduo, extends to other brands. Some items in the supermarket are cheaper than on Pinduoduo: Jinlong fish rice that costs 30.9 yuan for 10 jin on Pinduoduo is only 27.5 yuan here; Omo lemon dishwashing liquid at 9.9 yuan on Pinduoduo is priced at 8.8 yuan here; Laoganma chili oil that is 9.99 yuan on Duoduo Maicai is only 8.8 yuan here... Compared to snack discount stores, this is more like an "offline Pinduoduo" supermarket.

If snack discounts capture young people, then the discounts on daily necessities and grains attract middle-aged and elderly people: next to the snack shelves, there are mostly young people and elders with children; next to the grains and daily necessities shelves, there are middle-aged and elderly people from nearby residential areas. In Lingshi Youming's official promotion, the wholesale supermarkets are mainly located in communities, vegetable markets, and farmers' markets, with over 3,000 SKUs, expanding beyond snacks to include paper products, daily necessities, rice, flour, and grains—the main customer base of communities, vegetable markets, and farmers' markets is families and middle-aged and elderly people. The goal is to cover a wider range and reach a broader lower-tier market audience. The expanded categories cater to the needs of consumers of all ages in a family.

According to recruitment personnel, opening a Lingshi Youming wholesale supermarket costs about 600,000 yuan, which may be cheaper than opening a pure snack store. "Pure snack stores have higher location requirements, needing to be in shopping malls or commercial streets, but wholesale supermarkets have more flexible location requirements, such as large communities or towns, with lower rent and labor costs."

**The leading snack discount brands entering new tracks naturally attract the attention of many retail players, and those who feel it most keenly are the frontline franchisees.** A Lingshi Youming franchisee said they are also considering whether to upgrade their store: "I heard that existing franchisees get priority for new store openings. Competition is getting fiercer; a wholesale supermarket might bring more foot traffic and better business." However, some frontline franchisees are worried about snack discount brands entering new formats. Linlin franchised a snack discount store in 2022. Previously, she and friends had opened a milk tea shop and invested in a travel photography studio, "investing in a batch of internet-famous products." Her snack discount store is in a small town in Zhejiang, on an old pedestrian street. When it first opened, there were only two snack discount stores on the 300-meter street, and both did well. But in 2023, four snack discount stores appeared on the street. "Originally, having a wide variety of snacks and monthly discounts were advantages, but now every store has regular discount periods or similar activities. After all the fuss, the best sales day is the discount day." The exploration of new formats by snack discount brands makes her worry that foot traffic will be diluted even more, pure snack stores will see less business, and she will "eventually have to join the price war."

**Hand-to-Hand Combat**

According to the "2023 Top 30 Bulk Snack Chain Brands" list by Lianshang.com, the top three snack discount brands are Snack Busy, Haoxianglai, and Zhao Yiming Snacks. Shortly after the list was released, on November 10, 2023, Snack Busy and Zhao Yiming Snacks announced a strategic merger to form Mingming Busy Group. The alliance of the two major players intensified the war on this track, and offline snack discount stores engaged in street battles: five or six snack discount stores can open on a single street, and business has expanded to county towns.

Like the former "thousand-group war," expansion to seize the market inevitably involves fierce competition, and snack discount stores launched a hand-to-hand price war in 2024. The previous monthly member day 88% discount is no longer enough. A snack discount store franchisee said that in Hunan, Snack Busy and Haoxianglai are "fighting face-to-face": "If one offers 20% off, the other offers 30% off; if one offers 40% off, the other offers 60% off." Unlike the new consumer snack brands that competed for online attention in previous years, offline snack discount stores have low gross margins, typically around 10-20%, so frontline franchisees need volume. This means snack discount stores place great importance on "locations," and there are only a few good spots in shopping malls, commercial streets, and pedestrian streets.

On Xiaohongshu, netizens share photos of snack "business wars." Linlin said some snack discount brands spend big money to get convenience stores, milk tea shops, or even pharmacies to give up prime locations, while others directly contact franchisees of competing brands and pay them to "switch brands": "A lump sum of 400,000 to 500,000 yuan would tempt me too." More common are direct subsidies. In the subsidy policy provided by Lingshi Youming's recruitment personnel, one clause stands out: "If a store encounters malicious discount promotions by competitors (national brands) and meets the criteria for high competition, the company fully supports the store in competition, subsidizing gross margin to 16%."

Retail industry practitioner Lao Huang said directly that frontline franchisees and consumers are the guarantee for snack discount brands to gain bargaining power with brands: "With thousands or tens of thousands of stores, you have higher bargaining power and can negotiate lower prices."

Discount retail is mainly divided into "soft discount" and "hard discount." The former sells defective or near-expiry surplus goods, while the latter achieves high cost-performance by shortening supply chains and reducing operating costs. Previously, near-expiry discount chains like HotMaxx and HiBuy were mostly soft discount, but Lingshi Youming and many snack discount brands' recruitment personnel clearly state that "all products in the store are not near-expiry; we follow the hard discount route." At the same time, through their large chain scale, snack discount brands can achieve economies of scale in procurement, logistics, and supply chain. Many snack discount brands showcase their supply chain and logistics as advantages on their official websites. Snack Busy has 13 supply chain centers and over 30 square meters of modern logistics warehouses; Haoxianglai has 25 warehousing centers; Lingshi Youming has nearly 300,000 square meters of intelligent warehousing and distribution integration logistics center; Ai Snacks can provide next-day delivery to store terminals...

The white-hot battle only saw some changes in June this year: In June 2024, Mingming Busy announced that the total number of stores under its two brands had officially exceeded 10,000, making it the undisputed leader in the snack discount industry. Its biggest competitor is Haoxianglai with over 7,000 stores. When the top two fight, many "third-place" players are caught in the middle. To avoid becoming cannon fodder, they must seek more growth opportunities and outlets beyond price wars.

Lingshi Youming is not the first snack discount brand to enter the wholesale supermarket business and do hard discount retail. Ai Snacks announced the launch of a convenience store franchise; Snack Youxuan launched its sub-brand Huizhen Wholesale Supermarket; Qiahuo Puzi also introduced a wholesale supermarket model...

Choosing to enter the retail industry naturally stems from the fact that previous scale advantages can be replicated, and scale can be used to compete with suppliers for bargaining power. But this also means that the wholesale supermarkets of many snack discount brands may still be far from fresh produce. In Lingshi Youming's wholesale supermarket, the only fresh produce is eggs at 21.9 yuan for 30, which is a traffic driver that effectively attracts consumers into the store. However, Lingshi Youming's recruitment personnel said frankly that other fresh produce will not appear for now: "Fresh produce is prone to high loss rates; currently, we focus on food and daily necessities."

**Discount Era**

**The Battle Is Not Over**

In a rational consumption environment, consumers are pursuing "cost-performance." The rise of Pinduoduo, the "price power" of major e-commerce platforms, and snack discount stores opening on streets and alleys all indicate that the consumer market has entered a "discount era." From Lingshi Youming to Ai Snacks, former vertical hard discount retail brands are expanding their categories, just like HotMaxx and HiBuy transforming into hard discount businesses, all trying to tell more stories in a fixed space.

Drawing on the experience of many overseas players, in a rational consumption environment, the retail discount industry is indeed a long-term sustainable and successful business model. Aldi, the pioneer of hard discount that grew up in post-war Germany, has opened over 10,000 stores in 19 countries and regions worldwide, and is regarded as a representative of community retail. Don Quijote, which grew after the collapse of Japan's bubble economy, has also opened over 400 stores and is similarly seen as a model of discount retail.

According to Deloitte's "2023 Global Retail Power" report, Aldi ranks ninth globally with revenue of $120.947 billion (approximately 876.8 billion yuan). Don Quijote has grown for 33 consecutive years, achieving revenue of 1,831.3 billion yen (approximately 93.6 billion yuan) in 2022, making it the fourth-largest retail company in Japan by revenue.

At the same time, China has a huge retail market. According to the "2023-2028 China Discount Store Industry Competition Analysis and Development Prospect Forecast Report" released by China Puhua Industrial Research Institute, the market size of China's discount retail industry reached 1.62 trillion yuan in 2021, with a CAGR (compound annual growth rate) of 4% over the past five years.

**Under the trillion-yuan market, breaking out from vertical tracks is a new opportunity for discount players.**

**However, more and more competitors are eyeing this opportunity: traditional supermarkets and new retail supermarkets are also targeting it.** In October 2023, Yonghui Superstores announced the opening of "authentic discount stores" in its stores nationwide and will also add discount sections online, with products priced at 30-70% off the original price. In April this year, Yonghui Superstores announced plans to complete the renovation of 600 "authentic discount stores" by the first half of 2024. Another new retail player, Hema, began a discount transformation at the end of 2023, lowering prices on over 5,000 products in offline stores, and Hema Fresh Outlets have also opened stores in various places.

Although the number of stores of Yonghui and Hema is not as large as that of snack discount brands like Lingshi Youming and Ai Snacks, they have advantages in logistics, supply chain, and even bargaining power. They also have star IP appeal, with not only private brands but also advantages in fresh produce supply chains, which is exactly what many snack discount brands lack.

**E-commerce platforms that emphasize "price power" are also competitors.** Although jokingly called "offline Pinduoduo," many branded products in Lingshi Youming's wholesale supermarket are still priced higher than on e-commerce platforms. Young people and young families attracted by snacks and eggs are also adept at comparing prices across multiple platforms, adhering to the concept of "not buying unless necessary." Snack discount stores have jumped out of the snack track and entered the broader discount retail market, facing more intense competition.

Almost all snack discount brands are using scale to achieve the Matthew effect, striving for bargaining power on the supply chain side and gaining favor from suppliers. This also means that there are no scarce products in snack discount stores that have spread across county towns; "if you have it, I have it too" is the norm. Lingshi Youming, Ai Snacks, and other snack discount brands have taken the first step, differentiating by category. Other snack discount players will inevitably enter the market sooner or later, and at that time, category differences will only further diminish.

For many snack discount brands, the battle for street corners is not over, but the next round of discount retail competition has already begun: **In the end, whoever can tell the best supply chain story will win.**


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