Source: Lishi Business Review (ID: libusiness) Author: Liu Ge
Speed and "algorithms" are the core strategy of Bianlifeng. Its ultimate goal is to build a convenience store system driven by big data and algorithms, minimizing human involvement. It sounds like another myth created by the internet's "golden touch," but who knows how long it can last?
In a second-tier business district in Beijing's Chaoyang area, I counted eight convenience stores within a 150-meter diameter, including the earliest 7-Eleven and later arrivals like Quanshi, FamilyMart, and Bianlifeng. I almost wonder how young office workers survived before these stores opened.
A small detail reveals that they don't hide their copycat nature—every store sells oden. This boiled skewer dish came to China with 7-Eleven years ago and became a main reason many people visit 7-Eleven.
Among these stores, Bianlifeng opened the latest, and surprisingly, it has two stores under the same building. This chain supermarket, founded in December 2016, opened over 200 stores in Beijing, Shanghai, Tianjin, Nanjing, and other cities in less than a year and a half. In comparison, 7-Eleven, the king of convenience stores, took 14 years to open fewer than 200 stores in Beijing.
Today, Bianlifeng has over 1,000 stores nationwide, with more than 500 in Beijing alone, surpassing the combined number of Japanese convenience store chains like FamilyMart, 7-Eleven, and Lawson in Beijing. It also has over 100 stores in Shanghai. This rapid expansion has drawn both admiration and controversy. The bigger controversy stems from Bianlifeng's internet DNA.
Speed and "algorithms" are the core strategy of Bianlifeng. Its ultimate goal is to build a convenience store system driven by big data and algorithms, minimizing human involvement.
It sounds like another myth created by the internet's "golden touch," but who knows how long it can last?
-01- Convenience Stores: The Wind is Blowing
Bianlifeng's founder, Zhuang Chenchao, was the CEO of Qunar and is called a "genius geek" by the media. After leaving Qunar in 2016, Zhuang conducted extensive research and identified the convenience store industry as his next entrepreneurial venture.
This is indeed a massive market. According to the China Chain Store & Franchise Association, in 26 key cities, each convenience store serves an average of 12,000 people, while in the US and Japan, there is about one convenience store per 2,000 people. China's urban population is around 600 million, and if estimated by Japan's penetration rate, it can accommodate 300,000 stores.
Some studies suggest that when per capita GDP reaches $6,000, convenience stores enter a peak development period. China's current per capita GDP is close to $10,000. Based on the experiences of the US and Japan, after large supermarkets have fully developed, a boom in modern chain convenience stores follows.
Japan's first truly modern convenience store, also the first Japanese 7-Eleven, opened in 1974. Horizontally comparing, China's large cities and eastern coastal regions basically have the purchasing power of 1970s Japan, and nationwide, the development of large supermarkets has entered a full decline.
7-Eleven flourished in Japan but originated in the US. In 1927, the predecessor of 7-Eleven, the world's first convenience store, was born in Dallas, founded by an ice company. Before refrigerators were invented, exporting ice from the northern US to the South and Central America was a lucrative business. In 1925, household refrigerators began to appear, and the company realized the ice business might end, so it had to find a new direction.
Ice sales points were open daily in summer, 16 hours a day. The company noticed that residents, when buying ice, also wanted to buy odds and ends like thread, milk, eggs, bread, and other everyday foods. So the ice sales points naturally transformed into small grocery stores. The ice kept food fresh, making these stores more popular with housewives and establishing the company's competitive advantage early on.
In 1946, because the stores were open from 7 a.m. to 11 p.m. seven days a week, the company renamed itself 7-Eleven and began expanding. In 1963, the company started operating 24 hours a day and opened over 1,000 chain stores in several southern states, truly ushering in the era of chain supermarkets.
In 1971, Suzuki Toshifumi, an employee of Ito-Yokado, discovered this new business model different from traditional mom-and-pop stores during a business trip to the US and strongly advocated introducing it to Japan. At that time, large supermarkets were booming in Japan, and most company members opposed introducing this format.
The opposition had solid reasons: compared to large supermarkets, these small stores would have lower sales per unit area and require more labor for the same sales. But Suzuki eventually convinced the company with the future differentiation from large supermarkets and more efficient management plans, which led to 7-Eleven's success in Japan.
Currently, traditional mom-and-pop stores still dominate short-distance shopping in most Chinese cities. Although convenience stores are growing rapidly, the overall chain rate is low, services are uneven, and products are homogeneous—these are all opportunities for Bianlifeng.
Bianlifeng's strategy is to win by speed. At its inception, Bianlifeng's slogan was "100 stores in 1 year." To hit that target, it quickly secured any suitable location, whether 30 or 400 square meters.
While opening stores frantically, Bianlifeng's basic operating model also followed the "shortcut" of copying 7-Eleven, just like other chain convenience stores. Most stores are over 100 square meters, with 2,000-3,000 SKUs, and the proportion of private label and fresh/hot food is very close to 7-Eleven.
However, Bianlifeng's biggest branding effort is to present itself as a data technology company, not a continuation of the mom-and-pop store. It prides itself on its "algorithms." The slogan in Bianlifeng's mini-program is: A reliable 24-hour convenience store, a new smart retail experience.
Through the dual online-offline layout of "store + APP," users can self-checkout via the mobile app and self-service machines, improving shopping efficiency and reducing store labor costs.
Bianlifeng's digital thinking and management permeate every aspect from production, sales, to operations and service. It is said that the founder emphasized in internal emails the "mathematical logic ability of every headquarters employee," believing that the convenience store business "requires a large number of small decisions based on mathematical logic evaluation every day."
-02- "Algorithms" Above All?
How "hardcore" is Bianlifeng's digital management? Here are a few simple examples:
Bianlifeng's hot meals use various sensors to precisely quantify cooking temperature, heat, and time. Even potato hardness, green bean length, and stir-fry time are specified. The production process for each food item is controlled to the second, and IoT technology records and monitors every step.
Every morning at 5 a.m., Bianlifeng's system pushes tasks for making buns, calculating how many buns to make, how many with meat, and how many with vegetables. Even how many buns the store manager should heat is decided by the system.
Bianlifeng's short-shelf-life products (with a shelf life of 48-72 hours) are dynamically priced, borrowing from airlines' "revenue management" mechanism for tickets. When and at what time products start discounting is automatic, and even store managers and staff don't know. Once a discount takes effect, the electronic label in front of the product changes from ordinary black-and-white to "red," ensuring price-sensitive customers see it as soon as they enter.
This extreme quantitative management naturally has its benefits. First, it greatly shortens the employee training cycle. In the convenience store industry, training a store manager takes 2-3 years, but Bianlifeng only needs 45 days to 6 months, because most decisions that would traditionally be made by the store manager are replaced by algorithms and automated management. This is crucial; if following the traditional training cycle, it would be impossible to keep up with Bianlifeng's store opening speed.
On the other hand, digital management of production and distribution processes ensures product quality control and standardization; selecting products for each store based on sales data also has a much higher success rate than manual selection.
But can speed and data guarantee the success of convenience stores?
Without Bianlifeng's per-store efficiency data, we can refer to peers with similar formats and concepts: single-store daily sales are only around 2,000 yuan. Many very primitive mom-and-pop stores have daily sales higher than this level.
The reason chain convenience stores have low per-store revenue is that their business model basically copies 7-Eleven, which determines they can only target a single market like white-collar workers in first-tier cities. Everyone crowds into this narrow market, leading to highly dispersed customer flow. The customer flow that would support one or two stores is divided among seven or eight stores. Convenience stores are already low-margin, so competition becomes cutthroat.
-03- The Essence of Retail
Compared to the frenetic expansion of domestic convenience store brands, Japanese chains like 7-Eleven appear quite "Buddhist." After 14 years in Beijing, 7-Eleven has only 251 stores, fewer than Bianlifeng's two-year count.
7-Eleven's slow pace has drawn widespread criticism, but the company itself doesn't seem anxious. In fact, a close look at 7-Eleven's store data shows that the old hands are still the best. The average daily sales of a 7-Eleven in Beijing are 24,000 yuan, almost three times that of other convenience store brands. A 7-Eleven on Guijie Street in Dongzhimen, Beijing, even set an industry record with daily sales of 60,000 yuan. On average, one 7-Eleven equals three domestic convenience stores. So, discussing store opening speed without considering sales is meaningless.
In the entire 7-Eleven system, there is a highly consistent philosophy: store profitability is more important than expansion speed. Compared to scale, 7-Eleven values density more, because convenience stores are a business model with a short supply chain radius; dense store openings make logistics supply chains and operating costs more economical.
Another point worth noting is that Japanese convenience store chains like 7-Eleven are not so obsessed with direct operation. Uchida Shinji, chairman of 7-Eleven China, believes that the number of directly operated stores should not exceed 80, otherwise headquarters control becomes difficult. This thinking is exactly opposite to Bianlifeng's.
Regarding intelligence and various new technologies, 7-Eleven also holds reservations. Bianlifeng's push for unmanned checkout, in 7-Eleven's view, actually adds burden to customers. "Consumers spend less and less time in convenience stores, basically at most about 5 minutes. If they don't know how to operate unmanned devices, it wastes a lot of time."
This is one of Bianlifeng's embarrassments. The stores encourage customers to use the APP for self-checkout to reduce labor costs, but many customers don't know how to use it and need staff guidance, which increases the workload.
Uchida's words from 7-Eleven are apt here: The starting point for adopting new technology is to enhance user experience, not reduce costs. Following this thought, we can further consider: what is the essence of convenience stores or retail?
Bianlifeng's Zhuang Chenchao believes the core of convenience stores is "two 15s": 15 yuan (average transaction value) and 15 minutes (round trip to the store). "Our goal is to let every Chinese consumer get clean, hygienic, and affordable food within a 15-minute walk."
There's an interesting anecdote: when Zhuang Chenchao lectured at Huncun University, a female fan mentioned during the Q&A that Bianlifeng "sells not just food, but also care." Zhuang's response was quite interesting: "We don't solve the care problem; we sell food."
This somewhat cold "science nerd" thinking contrasts sharply with 7-Eleven's human touch. On 7-Eleven's 30th anniversary, it aired a corporate image ad in which a clerk asks a customer: "What you want to buy is a good mood, isn't it?"
7-Eleven founder Suzuki Toshifumi once said a widely circulated phrase: The essence of retail is to meet constantly changing customer needs. Customer needs may include the 15-yuan food Zhuang mentioned, but they are by no means just food.
In the final analysis, convenience stores are still a very traditional industry. They provide daily necessities near home and workplace, maintaining continuous contact with people. First, price and service are always the most essential. Second, experience is irreplaceable. Technology can be replicated, but the trust, comfort, or warmth felt in a store is its unique memory.
So we see that no matter how the industry changes, 7-Eleven seems to always adhere to its philosophy: dense site selection, provide valuable products, be customer-oriented, and emphasize direct communication with employees.
Bianlifeng's store management appears more refined, but it's worth noting that Bianlifeng follows a fully direct-operated model, yet in China's FMCG retail industry, there are almost no precedents of direct-operated systems achieving rapid large-scale success in the short term. "Small stores should not be directly operated" is a default rule in the chain industry.
After all, a store manager simply trained by a large company and a franchise owner who is often in the store have completely different concerns and create completely different atmospheres. Data cannot fully replace this atmosphere, which may be closer to the core logic of the "mom-and-pop store" business model that has persisted for thousands of years.
As Amazon CEO Bezos famously said: You need to ask yourself, what will not change in the next ten years? Then put all your energy and effort into those things.
Tips will be paid 400-2000 yuan once adopted.