---
title: "China's Chain Convenience Stores Enter an Era of Rapid Expansion"
description: "Convenience stores have become one of the hottest retail topics in recent years. Data from 56 branded chain convenience store companies shows that in 2021, 12,002 new stores opened and 2,882 closed, with total store numbers continuing steady growth. Leading brands like Yijie, Meiyijia, and Kunlun Haoke have each surpassed 20,000 stores, while foreign brands such as FamilyMart, Lawson, and 7-ELEVEN are expanding rapidly."
author: "胡钶"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2022-02-08"
language: "en"
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---

# China's Chain Convenience Stores Enter an Era of Rapid Expansion

> Convenience stores have become one of the hottest retail topics in recent years. Data from 56 branded chain convenience store companies shows that in 2021, 12,002 new stores opened and 2,882 closed, with total store numbers continuing steady growth. Leading brands like Yijie, Meiyijia, and Kunlun Haoke have each surpassed 20,000 stores, while foreign brands such as FamilyMart, Lawson, and 7-ELEVEN are expanding rapidly.

When it comes to hot retail topics in the past two years, convenience stores definitely take the lead. According to data from 56 branded chain convenience store companies, in 2021, 12,002 new convenience stores opened domestically, with a total of 2,882 closures, and the overall store count continued to grow steadily. Leading brands such as Yijie, Meiyijia, and Kunlun Haoke have all surpassed the 20,000-store mark, while foreign brands like FamilyMart, Lawson, and 7-ELEVEN are expanding rapidly.

**The CVS Industry Continues to Expand Steadily**

According to data from Tianyancha, in 2021, the annual number of newly registered convenience store-related enterprises exceeded 250,000, showing a steady growth trend over the past decade.

In 2021, the country added 69,000 new supermarket convenience stores, bringing the total to over 190,000. Many well-known brands saw significant increases in store numbers. Among them, Meiyijia added over 1,600 stores, Lawson added nearly 550, 7-ELEVEN added 240, and Bianlifeng added over 400.

According to the "2021 China Convenience Store TOP100" list compiled and released by CCFA, Yijie, Meiyijia, and Kunlun Haoke ranked in the top three, with Lawson, FamilyMart, and 7-ELEVEN ranking fifth, sixth, and seventh respectively: (Source: CCFA China Chain Store & Franchise Association)

From the data in the table, the top three brands are developing very strongly. For example, Yijie and Kunlun Haoke are basically present wherever there are gas stations. At the same time, the long-tail effect is prominent, with an increasing number of local convenience store brands.

**Why Has CVS Expanded Rapidly in Recent Years?**

Where there is rise, there is decline, as market demand is limited.

Hypermarkets have had a tough time in the past two years. Carrefour, Metro, Tesco, and others have withdrawn from China, while RT-Mart, Yonghui, and others have undergone upgrades and transformations. Behind this phenomenon are changes in consumer shopping habits and the rise of O2O e-commerce.

Furthermore, with large population inflows into first-tier and new first-tier cities, and rural populations moving to cities, population density in some major cities will further increase. At the same time, the rise of young consumers in lower-tier markets has given convenience stores huge development opportunities.

Since August 2021, Lawson has entered several prefecture-level cities such as Tangshan in Hebei, Wuhu in Anhui, and Nantong in Jiangsu, opening nearly 20 stores. 7-Eleven has opened its first stores in Dezhou, Shandong, and Kunming, Yunnan.

In addition to Japanese-style convenience stores, local brands are also making strides in lower-tier markets: Bianlifeng opened its first stores in Foshan, Guangdong, Xuzhou, Jiangsu, and Lianyungang, and Tangjiu entered the Zhengzhou market for the first time...

The "2021 China Urban Convenience Store Index" released by the China Chain Store & Franchise Association shows that the development of convenience stores in some third- and fourth-tier cities, such as Huizhou in Guangdong and Putian in Fujian, is already very close to the level of mature convenience store markets, with competition intensity no less than that in first- and second-tier cities.

The 2021 China Convenience Store Development Report by CCFA and KPMG summarizes three reasons for the rapid expansion of convenience stores in recent years: increased per capita income, consumption upgrades among Generation Z / smaller store formats, and policy support.

Why does increased per capita income lead to growth in convenience stores?

According to data released by the National Bureau of Statistics on January 17, the national per capita disposable income in 2021 was 35,128 yuan, a nominal increase of 9.1% year-on-year, and a real increase of 8.1% after deducting price factors, with a two-year average growth of 5.1%.

The main consumers of convenience stores are Generation Z. The post-95s, who grew up in material abundance, follow economic trends and pursue product quality, giving rise to new consumption tracks such as the "health economy" and "interest economy." Convenience stores create consumption scenarios like breakfast and lunch, meeting the upgrade needs of target consumers.

The reason for smaller store formats is to meet consumers' demand for high-quality goods and services while improving store operational efficiency, achieving "five simultaneous transformations" – refined management, ultimate environmental experience, refined value-added services, data-driven operations, and flexible supply chain management.

In recent years, the state has vigorously supported the development of convenience stores, providing idle resources and subsidies for opening stores in communities:

The "Guidelines for Building a 15-Minute Convenient Living Circle in Cities" emphasizes the development of chain convenience stores, providing idle resources and preferential policies for their opening.

In 2021 alone, the State Council and the Ministry of Commerce issued as many as seven supportive policies for convenience stores, covering community store construction, 24-hour operation, digitalization of store scenarios, and intelligent supply chains. Convenience stores have entered a period of "leaning against a big tree to enjoy the shade."

Relevant data shows that in 2019, the United States had one convenience store per 2,149 people on average, Japan had one per 2,268 people, while China had one per 11,438 people in 2018.

Compared with countries with mature convenience store development, China's convenience store scale still has much room for growth, and the number of stores will increase year by year with economic growth.

7-ELEVEN, FamilyMart, and Lawson rank in the top three in the Asia-Pacific region in terms of store openings. Before expanding aggressively in China, these three brands already had business foundations in countries like Japan and South Korea, accumulating market experience that laid the groundwork for expansion in the domestic market.

**Will the Development of Convenience Stores Be Smooth Sailing?**

Judging from recent developments, convenience stores may continue to grow in the future.

Relevant reports show that despite the impact of the pandemic, chain convenience stores experienced negative daily sales growth in 2020. However, as the pandemic was effectively controlled, convenience stores resumed growth last year.

Regarding the future development of convenience stores, retail industry expert Zhang Chenyong, who runs the "Lao Zhang Talks Retail" account, said that the overall development will be positive.

From a competitive perspective, traditional small shops and specialty stores are the main competitors of convenience stores. Traditional small shops have low operating costs and low requirements for consumer density, so they can survive in areas with fewer people.

In countries with mature convenience store development, the number of specialty stores is small. Due to differences in national conditions, China has a large number of specialty stores, especially bakeries and snack shops. Because specialty stores sell a single category, they can survive in areas with low consumer density.

Convenience stores, due to high operating costs and high-quality products, rely more on consumer density and spending levels. As the economy grows and people gather in cities and CBD areas, convenience stores will continue to see growth.

Since traditional small shops and specialty stores have quite mature business models, convenience stores can also learn from these traditional formats to enhance their competitiveness.

However, Zhang Chenyong also mentioned that the development of fast delivery services will impact convenience stores.

Fast delivery offers a full range of products and fast delivery speeds, but the fulfillment cost is too high, which has been a bottleneck. If unmanned delivery technology can be popularized in the future to reduce business costs, it could pose a significant threat to the growth of convenience stores.

However, Chen Yuefeng, founder of Lingshou, has a different perspective.

Chen Yuefeng analyzed that China's national conditions are not very suitable for developing convenience stores. **First, there are significant differences between the north and the south.** Convenience stores need to select products, display, and manage according to different regions, making it difficult to reduce operating costs.

**Second, consumption habits are different from those abroad.** Most domestic consumers are planned and practical, with less impulse buying, and they prefer to save money. Many foreign consumers tend to spend what they have and are willing to pay for spiritual consumption.

Although the new generation tends to focus on spiritual consumption, their overall spending power is not as strong as their peers in developed countries, so they cannot change the status quo for now.

**Third, China's food delivery system is strong.** Not only do consumers stop visiting stores, but food delivery is a substitute for convenience meals, giving consumers no reason to go to convenience stores.

Convenience stores are not a rigid demand. If the economy has problems, consumers may feel it's necessary to save a yuan or two, walk a bit further to a mom-and-pop store, or buy online in advance, and convenience stores won't make that money.

Regarding policy support for opening stores, Chen does not believe it is sustainable. The economy is still market-driven and determined. Without subsidies later, many poorly performing stores will face losses or even closures.

In my view, apart from the pandemic factor, the number and revenue of convenience stores will grow steadily in the coming years, but due to site selection and competitive pressure, growth may slow down.

Business districts, tourist attractions, etc., will become the main coverage areas for convenience stores. The unmanned delivery service will not mature and spread quickly in the short term, requiring significant investment and technical support.

**In conclusion:**

The global retail industry is currently suffering a huge blow, and economic growth is at a turning point in market development.

In addition, young consumers have grown up in the internet age without material worries, but they may face material difficulties due to economic impacts. These are all problems the retail market has never encountered.

Combined, these factors make it uncertain how each industry will develop in the future. No expert or industry professional can accurately predict future trends.

Let us continue to pay attention to the convenience store industry and let time tell the story.

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