"In the challenging environment of 2023, the convenience store industry still experienced growth, and it will continue to grow rapidly for a long time to come," said Tao Ye, a long-time convenience store industry veteran and now a retail industry project investor, to the author. According to the "2023 Convenience Store Format Development Overview" released by CCFA on January 19, in 2023, sample convenience store companies opened 13,148 new stores and closed 4,076, resulting in a net increase of 9,072 stores. Among them, sample companies with more than 1,500 stores accounted for nearly 7,000 net new stores, representing nearly 80% of the total net increase. Additionally, 81.4% of convenience store companies saw year-on-year growth in total sales, while 16.9% experienced a decline. In fact, in the era of slow recovery, many convenience store companies are now more clearly aware of their shortcomings and are finding ways to address them. "The pursuit of market position in the future will also be in a stage of rational judgment," Tao Ye said. This rational judgment and corporate decision-making have reshaped the survival indicators of the convenience store industry, shifting from a focus on scale to a focus on operational efficiency. In the future, the core competitiveness of the convenience store industry will still tend to be competition in product strength, operational capability, operational efficiency, and organizational capability. "Although the market changed significantly in 2023, overall, the convenience store industry continues to develop positively, and I remain optimistic. This is also in line with the development trends of convenience stores in countries like Japan and South Korea, and the actual data growth well supports this," said Yang Xiang, founder of Jiangxi Ledoujia, to the author. He said that Ledoujia did not undergo fundamental adjustments or changes in 2023, but has been continuously building value around its users, focusing on developing private-label products that customers love, and continuously exploring and adjusting around customer value, as well as improving overall operational efficiency. Over the past year, Ledoujia has re-understood the ecological niche of the convenience store format in online and offline retail channels, vertical and comprehensive stores. At the same time, it has also re-understood how convenience stores should provide truly valuable services to core customers. Yang Xiang frankly stated that he does not agree with defining offline retail stores as the traditional retail industry. In his view, offline retail stores should be at least divided into new-generation retail enterprises that focus on customer operations and value recreation, such as Sam's Club, Hema, fresh food convenience stores, and old-generation retail enterprises that focus on shelf operations. "The overall performance of new-generation retail enterprises is significantly better than that of old-generation retail enterprises." Reviewing 2023 as a whole, Ledoujia's sales increased by more than 10% compared to 2022, mainly driven by store growth and increased per-store output; gross margin slightly increased compared to 2022, mainly due to the continuous development of private-label products, which have relatively higher gross margins compared to distributed products; in terms of new store openings, the number of stores grew poorly, with an annual growth of about 5%. Regarding the past year, Yang Xiang believes that the convenience store format has also seen some new changes and trends. First, in 2023, the overall improvement in the convenience store industry was significant, with widespread progress in the development and sales of private-label products, operational management levels, customer understanding, and scenario creation, including industry leader Meiyijia and local chain convenience store brands across the country. Second, the convenience store industry has placed more emphasis on the development of ready-to-eat and ready-to-heat product scenarios to adapt to the increasing demand for proximity services brought about by urbanization, smaller families, fewer children, and an aging population, which has also brought sales opportunities. Third, companies have paid more attention to building internal capabilities, reducing blind and inefficient quantity expansion, and laying the foundation for providing long-term customer value. In addition, Yang Xiang believes that the convenience store industry currently faces significant challenges, such as changes in tobacco policies, which have a serious impact on industry growth; refined management levels (large operations) need improvement; product development that meets the needs of convenience store customers is relatively slow; the advantages of convenience store scenarios are underdeveloped; and the low industry concentration brings scale limitations. Ledoujia was founded in 2012, with its headquarters in Nanchang. It is a light meal-type convenience store service brand. As a regional leading brand in Jiangxi's retail industry, Ledoujia has a team of over 1,000 people. In 2020, it successfully achieved monthly sales exceeding 100 million yuan, covering cities such as Nanchang, Jiujiang, Shangrao, Ganzhou, Ji'an, Yichun, Fuzhou, Jingdezhen, and Yingtan in Jiangxi. Yang Xiang was once obsessed with learning from Japanese convenience stores, then studied European, American, Taiwanese, and Southeast Asian convenience stores, and finally tried to explore a development model more suitable for China's local convenience stores by learning from each other's strengths. In Yang Xiang's view, Ledoujia's uniqueness starts with the industrialization of catering, doing the middle ground between industrialized food and catering. First, with large-scale replication, channel construction advantages, and relatively long shelf life of 3-7 days, achieving 90% taste restoration, but with industrial advantages, "standardization, food safety, and large-scale production are our core competitiveness," Yang Xiang said. Second, Ledoujia focuses its efforts entirely on exclusive products rather than main products. Yang Xiang once told the author, "We don't care whose products sell in our stores; we care about how we create exclusive products that can arouse consumer interest and enthusiasm. At the same time, the R&D center is our core asset, and R&D is very important." He also said that Ledoujia's core is to serve consumers and manage individual products, rather than becoming a tool for any supplier. "It was before, and it will be in the future." Yang Xiang believes that the core competitiveness of convenience stores lies in using their extensive store density and geographical advantage of being closest to customers to solve customers' convenience needs, especially in fast and simple meal services such as ready-to-eat, ready-to-heat, and ready-to-cook, which have unique and obvious comparative advantages over delivery, vertical stores, and online. At the same time, Ledoujia's core advantage is its ability to break conventions and aim to solve core pain points rather than follow routines. "As a small local chain enterprise, there are many challenges ahead. In 2024 and the coming years, we will focus on building advantageous supply chains, online marketing capabilities, team growth, and the general benefit of franchisees," Yang Xiang said. In the coming 2024, among the many retail formats, such as convenience stores, physical supermarkets, social e-commerce, live streaming e-commerce, paid membership stores, discount stores, and snack discount stores, Yang Xiang believes that convenience stores, modern supermarkets, social e-commerce, and discount stores will achieve good development. The logic is simple: convenience stores and modern supermarkets are essentially the same type of store product, both are store types built around customer operations and value, only differing in form due to store size, and this type will be more vibrant in the future. "Regarding discount stores, whether in developed or developing countries, various types of discount stores will emerge in various formats, especially in a complex and huge market like China, it is inevitable. Therefore, discount snacks, discount supermarkets, discount fruits, discount hot pot, discount coffee, or discount milk tea will all have good development opportunities because they are relatively blank. Maybe everything can be discounted," Yang Xiang explained to the author. Also in 2023, another convenience store brand that saw growth was Linji Convenience Store. Liu Zhongjian, founder of Linji Convenience Store, told the author that in the past 2023, Linji grew well, opening nearly 300 stores, with a growth rate of about 35%. Liu Zhongjian emphasized that he is very optimistic about the development of convenience stores in China. "In 2024, the convenience store format will have both opportunities and challenges, and Linji will accelerate its development." "Next, the convenience store industry will definitely enter a consolidation period, with the most obvious being the head effect, and more professional enterprises will go further," said Zhang Li, chairman of Jianfu Convenience Store. Zhang Li previously told the author that he feels most fortunate that he has not acted recklessly or expanded rapidly over the years. "We have solidly built an industrial park. Although it is a heavy asset investment, it lays the foundation for development in the next 5-10 years." Regarding the future development of the convenience store format, Zhang Li gave the following judgments: First, the head effect. "The big get bigger, and the small exit the game; there's no way around it." He said that in the future, the core competitiveness of Chinese convenience store enterprises will definitely be the comprehensive embodiment of brand value, customer value, and organizational value. Convenience store enterprises will also definitely transform from "marketing-oriented" to "efficiency-oriented" and from "wholesale-type" to "manufacturing-type." Second, within the next three to five years, the consolidation period for convenience stores will arrive. Based on regional integration, in the next three to five years, a truly profitable national local convenience store brand will inevitably emerge. Third, professionalization drives. "A convenience store enterprise that wants everything, like a restaurant that does both Shandong and Cantonese cuisine, will eventually go bankrupt. Without a trump card product or a trump card strength, I think it won't go far," he said. The essence of doing business is still to return to products. Operating products, operating scenarios, and operating customers is the essence. In other words, creating exquisite products and scenarios to retain customers is the core. "Doing retail is inherently hard work with thin profits. We must respect the laws of things, and doing difficult but correct things takes time," Zhang Li said. Zhang Li said that in the future, we must try every means to truly achieve enterprise chain operation. "Because each of our stores is scattered, and each organization is also relatively scattered. If we cannot achieve true chain operation, our future situation will be very awkward and difficult." But it is difficult to achieve scale and efficiency. In this industry, around 200 stores is the first step of chain operation. After crossing that, we face the 500-store step, and we need to think about how to upgrade the logistics distribution system and information system. At 1,000 stores, we need to consider how to differentiate products. After 2,000 stores, we face organizational reform. "Having looked at so many different convenience stores around the world, I just want to answer one question: What is a convenience store?" Tao Ye summarized it simply into three points: First, solve the problem of eating, making customers' lives easier; second, provide accessible service response (meeting the unplanned and temporary purchase needs of today's young people); third, integrate into the community. "Although the overall environment is not good, in the past year, the entire convenience store format has maintained growth, and it will continue to grow in the future," Tao Ye told the author. In the future, convenience and discount will remain the basic trends in retail development. Tao Ye believes that the convenience store format has been competing for the sinking market, but in fact, the sinking of the market is no longer just sinking, but a promotion and popularization of the convenience store format. "As far as this format itself is concerned, acceptance is getting faster and faster. It is no longer just a format in first- and second-tier cities. As young people living in third- and fourth-tier cities gradually grow up, the market space for convenience stores will gradually expand." Tao Ye predicts that the convenience store format will continue to develop in the following four aspects in the future: First, entering the era of stock competition, with regional brands penetrating each other, new retail going deep into lower-tier cities, and internet commerce popularizing and sinking; Second, community commerce will stage a tale of two cities, both the best of times and the worst of times, with the market returning to communities; Third, the era of rational consumption is coming, with discount formats attacking. The economy is stabilizing and slowing down, and years of consumption education have led to rational consumption. Discount stores are equally convenient and will divert some market share; Fourth, new retail becomes old. Excellent teams evolve new species and grow rapidly, while traditional brands also begin to engage in close combat under the dividend of digital popularization. Tao Ye said that the entire industry is now undergoing many explicit or implicit changes, and everyone is in the midst of change. During this period, the biggest change for everyone is that they have become more rational and mature than before. At this stage, it is time to test the core competitiveness of the convenience store format. First, the gap in store models between first-, second-, and third-tier brands in the industry is narrowing, and the gap in services provided by each store to customers is also narrowing. Then, in the coming years, the test will be the ability of enterprises to continuously iterate and optimize as they continue to expand in scale. In other words, in the coming years, competition in convenience stores will be more in management, operations, and organizational capabilities. Second, in the process of approaching store models, it will be a boring and hard competitive state, and it will test the enterprise's determination even more. In 2024, the head effect trend in convenience store enterprises is obvious. How the remaining enterprises build their core competitiveness and reshape survival indicators is also a key stage for convenience store enterprises to find a way out. In addition, some industry insiders also told the author that competition in the convenience store format is intensifying, with head brands increasing their scale. Sinking markets and community-based convenience stores will become the main development trends. At the same time, instant retail, digitalization, and scenario segmentation are key to enhancing the competitiveness of convenience stores. Future convenience stores will also need to carry more cultural, social, and third-space service functions. PS: **From March 14 to 16, 2024, the 9th China FMCG Innovation Conference, co-hosted by New Distribution and co-organized by Ande Zhilian, along with the 2nd China FMCG Hard Discount Conference and the 2nd China FMCG Distributor Conference, will be grandly held in Chengdu! The 2nd China FMCG Distributor Conference will be hosted by New Distribution and co-organized by Zhoupu Data. This conference will focus on the theme of "Supply Chain Revolution," with three days, one main forum, one China FMCG Hard Discount Conference, one China FMCG Distributor Conference, more than ten sub-forums and closed-door exchange meetings, and the first重磅亮相的【极致供应链】品牌工厂现采会, which will meet with thousands of FMCG brand owners, distributors, retail transformers, and industry service providers from across the country in Chengdu, for continuous brainstorming, to jointly discuss the challenges and opportunities, changes and ways out in the era of supply chain revolution. In this era of supply chain revolution, a new business era will be born. I hope every participant will still have a place in this wave, and I believe this will be a conference worth attending! For business cooperation, please contact: