---
title: "Convenience Stores Are Also Undergoing Adjustments"
description: "In 2024, several 'small events' occurred in China's convenience store industry, including strategic partnerships and product innovations. These changes reflect the intense competitive pressures from discount retail and instant retail platforms, prompting convenience stores to adjust by developing private-label products, expanding fresh food offerings, and partnering with coffee brands."
author: "张振宇"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2025-02-06"
language: "en"
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# Convenience Stores Are Also Undergoing Adjustments

> In 2024, several 'small events' occurred in China's convenience store industry, including strategic partnerships and product innovations. These changes reflect the intense competitive pressures from discount retail and instant retail platforms, prompting convenience stores to adjust by developing private-label products, expanding fresh food offerings, and partnering with coffee brands.

In 2024, several "small events" occurred in China's convenience store industry:
1. Three Squirrels (三只松鼠) entered a strategic partnership with Meiyijia (美宜佳) to adjust and upgrade the snack category area.
2. Xinjiayi (新佳宜) promoted highly cost-effective private-label products, such as fresh milk at 4.9 yuan per jin and fresh beer at 3.9 yuan per jin.
3. FamilyMart (全家) continued to advance its "convenience food service" strategy after proposing the "five meals a day" concept.
4. Nowwa Coffee (Nowwa咖啡) reached a strategic cooperation with Jianfu Convenience Store (见福便利店) to operate co-branded stores.
...
Xinjiayi continues to launch private-label products; Meiyijia x Three Squirrels cooperate to adjust the snack zone; FamilyMart expands its fresh food services; Nowwa x Jianfu cooperate to open co-branded stores.
These events may seem minor, but they signal that the industry is undergoing change.
**There is no change without reason; behind these adjustments lies the intense competitive pressure facing the convenience store industry in the current chaotic retail environment.**
This is evident in the "2024 Convenience Store Business Development Overview" released by the China Chain Store & Franchise Association (CCFA).
CCFA's overall assessment of the convenience store industry's development trend in 2024
**During the day, discount snack stores and discount supermarkets focus on extreme cost-effectiveness, diverting business from convenience stores' pre-packaged goods. At night, instant retail platforms offer home delivery within 30 minutes, siphoning off business during convenience stores' most profitable hours.**
This situation will only worsen as discount retail and instant retail deepen their development in 2025.
**Therefore, adjustments and reforms in convenience stores are imperative!**
Through market research on the latest trends, we have summarized several key actions in the current convenience store industry adjustments:
> **1. Develop private-label products (product differentiation); 2. Expand fresh food offerings (consumption scenario differentiation);**
>
> **3. Emphasize coffee (opening new co-branding approaches).**
Let's discuss the underlying logic of these adjustments.
**Developing Private-Label Products – Product Differentiation**
In recent years, convenience stores have increasingly emphasized private-label products.
Whether it's Japanese-style convenience stores like FamilyMart's "Yamijiang" (呀米将), or local convenience stores like Xinjiayi's "Jiayi XX" (佳宜XX), and others like "Jiupa" (久帕), "Shizu" (十足), and "Bencun Shenghuo" (本村生活).
**Developing private-label products is an inevitable operational measure for convenience stores in an environment of extreme price competition.**
In the past, **convenience stores had the advantage of "instant purchase" and "nighttime availability," which allowed them to charge a convenience premium compared to e-commerce and other channels.**
Selling products at slightly higher prices did not significantly impact their business, and it was generally perceived as reasonable by the public.
However, when discount retail opens nearby, the convenience store's original "instant purchase" advantage is nullified. **Moreover, discount retail has a price advantage, which is a dimensionality reduction attack on convenience stores' general merchandise.**
Therefore, to maintain sales in such harsh and direct competition, convenience stores inevitably consider: **1. Differentiating from competitors to avoid homogenization; 2. Strengthening their competitiveness with more cost-effective products.**
Private-label products are the optimal solution to meet both requirements. By differentiating in specifications and packaging from market general goods, and by saving on manufacturing profits to lower prices, they can achieve this.
**This is why convenience stores are now generally focusing on developing private-label products**, and it is also a capability that convenience stores must develop as China's retail market matures.
When it comes to private-label products, all convenience stores look to Japan's 7-Eleven as a benchmark.
7-Eleven's private brand series, sourced from 7-Eleven's official website
In Japan's highly competitive market, 7-Eleven has deep insights into **meeting consumer needs, improving profitability, enhancing brand loyalty, optimizing supply chain management, improving brand image, and adapting to market changes.**
Due to differences in consumer segments, categories, and quality, 7-Eleven has developed a series of private-label products such as 7-Premium, 7-Gold, 7-Fresh, and 7-Lifestyle, achieving textbook-level success.
Yet even so, 7-Eleven continues to think about how to optimize its private-label products.
**It is clear that for Chinese convenience stores, developing private-label products is a marathon-like competition with no end.** The market is always changing, and there is no such thing as a perfect product; continuous optimization is required.
**The road is long and arduous, but it is difficult yet correct.**
**Expanding Fresh Food – Consumption Scenario Differentiation**
If developing private-label products is an effective response to discount retail, then the fresh food segment is the decisive factor in countering both discount retail and instant retail.
Unlike retail, the fresh food segment is more like a highly standardized supply chain in the food service industry, involving on-site processing to enable immediate purchase.
To some extent, **the real competitors of convenience store fresh food are small restaurants.**
**Discount retail and instant retail, due to their business models, find it difficult to compensate for fresh food operations.**
In terms of consumption scenario differentiation, convenience stores have a clear advantage. **When sales of pre-packaged products are diverted, other segments must be relied upon to boost sales, and fresh food is undoubtedly a strong point to focus on.**
In the past, convenience store fresh food was limited to simple processed items like oden, grilled sausages, steamed buns, and basic bento boxes. The product variety was not well explored.
Of course, because it involves on-site processing, it places high demands on store staff management and is challenging. Therefore, if store performance is acceptable, this is a difficult and long-term endeavor, and adjustments will not be quick.
**But the current competitive environment is harsh enough that areas where performance is lacking become opportunities for improvement.**
From a scenario perspective, besides three main meals, there are also afternoon tea and late-night snack scenarios. As long as products that meet these needs are available and align with the convenience store's value proposition, they represent untapped business opportunities.
FamilyMart released the "five meals a day" concept, covering all fresh food scenarios in convenience stores
For example, after FamilyMart launched its fifth-generation store format, it upgraded its "Hot Pot Station" (热气小灶), "Honey Bakery" (哈尼烘焙家), and "EMO Midnight Kitchen" (EMO深夜食堂) sections, using more complex on-site processing and a richer product range to meet consumer demand for fresh food at different times of the day.
Undoubtedly, the complexity of implementing fresh food operations poses a new challenge for the industry. **But as long as it leverages convenience store advantages to increase sales, it is a worthwhile adjustment direction.**
**Emphasizing Coffee – Opening New Co-branding Approaches**
Convenience stores have been offering coffee since their inception in 1927, **making freshly brewed coffee a naturally matching consumption scenario for convenience stores.**
However, unlike overseas markets, China's coffee market is unique: **1. Besides basic Americano and latte, flavored lattes are exceptionally developed; 2. The proportion of coffee delivered via delivery platforms is excessively high.**
78% of Chinese consumers choose to buy coffee through delivery, sourced from Deloitte China's "White Paper on China's Freshly Ground Coffee Industry"
Both points are disadvantages for convenience stores: **1. They do not have dedicated teams for flavor research beyond basic Americano and latte; 2. They are not adept at online traffic operations.**
**Compared to independent stores like Luckin Coffee, convenience store coffee has no compelling reason to attract consumers, whether in terms of product or consumer reach.** As a result, freshly brewed coffee in Chinese convenience stores has remained a marginalized category, contributing less than 5% of annual revenue.
Even Japanese players like FamilyMart and Lawson have invested heavily in promoting their coffee sub-brands (Paike and L-cafe), but their daily sales per store cannot compare to the over 200 cups sold in Japanese stores.
Not doing well does not mean the business is not viable.
As long as they overcome their supply-side disadvantages and operate in accordance with market competition rules, there are still business opportunities. **
Nowwa Coffee's cooperation with convenience stores is a model worth learning from, namely, **convenience stores entrusting a business that should be profitable but they are not good at to professional teams.**
Taking Nowwa as an example, many regional leading convenience stores have already cooperated with it in co-branded operations
**This cooperation model is a win-win for all parties:** 1. Better meeting the needs of consumers who buy coffee at convenience stores; 2. Increasing daily coffee sales per store, generating revenue for convenience stores and franchisees; 3. Accelerating Nowwa's store coverage and brand exposure.
Like fresh food, freshly brewed coffee is a completely reasonable consumption scenario for convenience stores. Moreover, discount retail and instant retail cannot integrate into this business segment.
Therefore, **in convenience store adjustments, how to further leverage this advantageous consumption scenario to drive sales will undoubtedly be a key focus going forward.**
**Final Thoughts**
The convenience store format, as an imported product, originated in the United States, flourished in Japan, and entered mainland China via Taiwan. In 1992, China's first convenience store, 7-Eleven, opened.
**Many of the competitive issues currently faced in the Chinese market have been experienced in more developed retail markets.**
Although the competitive environment differs due to national conditions, the solutions to many problems can be found through research.
**As an old retail species, convenience stores have developed lukewarmly in China, leading many to believe that China is not suitable for large-scale convenience store growth.**
**But with the advancement of convenience store adjustments, business formats will become increasingly diverse, and as they continuously adjust and optimize in response to market changes, convenience stores may actually have the opportunity to embrace a broader market!**
First there was "supermarket adjustment," and now there is "convenience store adjustment." Clearly, "adjustment" will remain a high-frequency keyword in 2025! The retail industry is undergoing rapid transformation. Behind the rush to adjust, what business threats and dividend opportunities exist? How should we respond?
**From March 17-19, the 10th China FMCG Innovation Conference will be held in Chengdu**, and concurrently, a **forum seminar on "Strategies for Responding to Supermarket Adjustments"** will be held to deeply discuss the series of issues and countermeasures brought about by adjustments.
**【New Order · Symbiosis】**
**The 10th China FMCG Innovation Conference**
**Date: March 17-19, 2025**
**Location: Chengdu, China**


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