****In 2023, the investment circle has seen dramatic changes, but in the consumer sector, PE/VC firms have found a unified theme. An industry insider noted that this year, only companies with 'large models' or '10,000 stores' can secure funding. In recent years, multiple chain brands have set the goal of 'exceeding 10,000 offline stores.' Amid the current consumption downturn, this scale effect seems to bring a certain degree of certainty. First- and second-tier cities have sufficient consumption power, but their numbers are limited, clearly unable to accommodate the ambitions of many brands aiming for '10,000 stores.' Thus, they have turned their gaze to the vastest expanse of the Chinese market—county towns. The Battle for 10,000 Stores Scaled businesses often attract considerable market attention and capital, and enhanced brand power leads to higher customer acquisition rates. In 2023, new consumer enterprises have entered the era of vying for 10,000 stores, with each incorporating '10,000 stores' into their five-year plans. LeFit Fitness CEO Han Wei publicly stated two months ago that he aims to expand LeFit to 10,000 stores within five years, despite currently having only over 1,300. Japanese company Lawson convenience stores currently have over 6,000 outlets in China and plan to achieve the 10,000-store goal by 2025. Similarly, Starbucks China, with 6,000 stores, saw its quarterly revenue surpassed for the first time this year by the rising star Luckin Coffee. Founder Howard Schultz, genuinely restless, has been clamoring to complete the 10,000-store goal by 2025 as well. Hotel companies with heavier assets are also striving toward this goal. Four years ago, Huazhu hoped to achieve 'a thousand cities, ten thousand stores' before 2022 through expansion in lower-tier markets. Although it only reached over 8,500 stores by the end of 2022, it is just one step away from 10,000. The year 2025 carries the expectations of many. In March this year, Zhu Yonghua, founding partner of Meituan Longzhu, boldly predicted: 'Before 2025, China will have more than 20 brands with 10,000 stores.' Incomplete statistics show that there are currently seven catering brands in China that have surpassed 10,000 stores: Wallace, Zhengxin Chicken Steak, Mixue Ice Cream & Tea, Juewei Duck Neck, Lanzhou Beef Noodles, Sha County Snacks, and coffee newcomer Luckin. Among them, apart from the 'local catering alliances' of Lanzhou Beef Noodles and Sha County Snacks, Wallace, Zhengxin, and Mixue have far outpaced others, each exceeding 20,000 stores. In 2001, Fuzhou's Student Street was bustling with people, surrounded by Fuzhou's higher education institutions, and Wallace's first store was located there. With its yellow-and-green sign, light brown tables and chairs, and the same children's playground, Wallace perfectly replicated the essence of KFC. This 300-square-meter fast-food restaurant, with an investment of 80,000 yuan, did not perform well initially, with daily revenue often failing to cover costs. Unable to win consumers through mere imitation, the Hua brothers decided to focus on the variable consumers care about most—price. In 2001, the average monthly wage in Fuzhou was around 600 yuan, and a family meal at McDonald's or KFC cost about 100 yuan, accounting for one-sixth of a month's income. Regardless of the historical period, low prices are a doctrine deeply ingrained in the Chinese people. Today, Pinduoduo dominates, and in the past, Wallace had its irresistibly charming 'Special Price 123': cola for 1 yuan, chicken leg for 2 yuan, and burger for 3 yuan. Such absurdly low prices were explosive at the time. The low-price strategy proved highly effective: first-day revenue increased from the usual 2,000 yuan to 4,000 yuan, second day to 6,000 yuan, and third day to over 8,000 yuan. Who would refuse a high-end replica of KFC at one-tenth the price? Subsequently, Wallace expanded from Fujian to the Yangtze River and Pearl River Deltas, then penetrated inland, conquering territories at a pace that left KFC and McDonald's, the two foreign fast-food giants, far behind. By the end of 2022, Wallace had reached 20,000 stores, surpassing the combined number of KFC and McDonald's stores in China. Mixue Ice Cream & Tea, the king of 10,000 stores, has also taken store expansion to the extreme. Originating from a small place, Mixue now has 25,146 stores nationwide and 32,000 globally. It was once hailed as the world's fifth-largest fast-food chain, behind McDonald's, Subway, Starbucks, and KFC. In the fierce competition of new-style tea drinks, Mixue attracts consumers with its 4-yuan lemonade, a blockbuster product. Once a low-end tea brand expelled from shopping malls, it now flourishes across the country, perfectly embodying the saying, 'Today you ignore me, tomorrow you can't afford me.' Looking at the 10,000-store brands, they all quietly opened their first stores in second- and third-tier cities, then launched counterattacks on first-tier and new first-tier cities; they focus on cost-effectiveness, with average order values below 20 yuan (except Juewei), so even workers earning 3,000 yuan a month can easily afford them. Originating from humble beginnings and adopting low-price strategies, these brands can capture larger markets in areas 'beyond the Fifth Ring Road.' First- and second-tier cities are limited in number and highly competitive, while China has about 3,000 county towns. If each brand opens three stores in every county town, they can achieve the 10,000-store goal. For chain catering brands, the center of the world is not in first-tier cities but in county towns. The Path to 10,000 Stores In China, the charm of the consumer sector lies in the vastness of the market, and county towns offer a broader horizon in terms of both population and geography. The success of catering brands in county towns is not accidental; they typically share three characteristics: small and exquisite stores, low average order values, and flavors that appeal to the masses. First, they are 'small.' 'Small' refers to both the store area and the variety of products. The author of 'Profiting from 10,000 Stores' once accurately summarized the characteristics of companies that can achieve 10,000 stores: 'In Chinese catering, those who eat while sitting are not as good as those who eat while standing, and those who eat while standing are not as good as those who eat while walking.' Street-side snack stalls where people buy and eat on the go are the most representative sample of Chinese catering, and it is precisely these small and beautiful catering enterprises that can occupy tens of thousands of street-side shops. Whether it's Mixue, Zhengxin, Juewei, or Luckin, their store areas are not large, and their product ranges are limited. In 2021, the Hurun Rich List also published a list of investment value of Chinese catering chain enterprises. Based on valuation or market value, among the top 50 companies, 17 were snack food and 10 were beverage brands. Snack and beverage stores may be inconspicuous, but they account for half of the domestic catering industry. Small store areas also significantly shorten the payback period. According to Zhaimen Catering, Mixue's payback period is about 8-12 months, while Heytea, which prefers to have seating space in malls, requires a longer period. The ability to recoup investment quickly undoubtedly ignites the entrepreneurial enthusiasm of franchisees. Catering enterprises focus most on sales per square meter. Starbucks' 'selling space' theory once caused a stir, but with Luckin opening its 10,000th store in Xiamen, the model of self-pickup and drinking on the go has become a new model to emulate. The rapid reproduction of standardized small stores is a prerequisite for achieving 10,000 stores. The second characteristic of 10,000-store brands is that their expansion model follows the 'rural surrounding the city' path. This means starting in non-first-tier cities and using lower-tier markets as the main battlefield for early expansion. Wallace is a case in point. In its early days, Wallace chose Fujian and surrounding areas as its market. Fried chicken and burgers, educated by foreign brands, had become popular fast food, but the consumption power in lower-tier cities was not yet attractive enough for KFC and McDonald's, making it an unexplored blue ocean. This gave Wallace the opportunity to seize the market. Mixue is also similar. As of 2022, nearly 75% of Mixue's stores were in second-tier and below cities; in terms of urban-rural distribution, stores in county towns and townships accounted for over 40%. Lower-tier markets have become the backbone supporting 10,000-store brands. In contrast, Heytea, as the first to start as an internet-famous tea drink, has been notoriously slow in expansion. The reason is that Heytea insisted on self-operation in its early days, pursuing store quality while neglecting market scale. At the end of 2022, Heytea officially announced opening franchising and continuously lowered prices, intending to explore lower-tier markets. However, given Heytea's specific list of cities for opening stores and the requirement of a million-yuan capital verification, its downward expansion feels like it has sunk but not completely. The third characteristic is that the product categories are all addictive foods. Chinese catering culture has a history of nearly a thousand years, and accumulated experience proves that snacks and fast food such as rice, noodles, and fried chicken have high penetration and consumption frequency, requiring no further market education. Once a suitable business model is found, they can quickly open up the market. All catering brands with over 10,000 stores are seriously and systematically doing one thing: focusing on snacks, streamlining menus, and creating blockbuster products. By increasing the proportion of sweet, sour, and spicy flavors in snacks, creating a 'big-brand alternative' effect, and setting average order values below 20 yuan, they generate high-frequency consumption and a broad consumer base willing to pay for taste. Mixue's 1-yuan ice cream and 4-yuan lemonade, Luckin's coconut latte, and Zhengxin's chicken steak selling 720 million pieces a year—creating blockbuster products is also a required course for becoming an 'addictive food.' Sugar water, coffee, fried foods, and spicy foods are all products that can create consumer dependence. Recently, Luckin Coffee and Moutai jointly launched a sauce-flavored latte, with single-day sales exceeding 100 million yuan and sweeping the internet. In addition to brand marketing efforts, combining 'alcohol' and 'coffee,' the world's two largest legal addictive substances, is also key to success. Offline Channels and Online Marketing 'Wind investment queen' Xu Xin once said, 'When you drink coffee and think of Starbucks and Luckin, it's not because their coffee tastes the best, but because their stores are everywhere.' Dense store openings are highly beneficial for brands. If 20% of people see you every day, the moat formed by the brand can surpass any product strength. Dense offline stores, combined with marketing, can produce a multiplier effect. Players in the catering industry's 10,000-store game are almost all marketing masters. It is worth mentioning that apart from Luckin, which is well-known for embedding marketing into its DNA, the other 10,000-store catering companies have all collaborated with the same consulting and positioning company—Hua & Hua. This is a marketing company skilled in viral communication. Mixue's catchy jingle 'You love me, I love you, Mixue is sweet,' Wallace's slogan 'Fried chicken with burgers, eat well at Wallace,' Zhengxin's new logo and 'Chicken King' title, and Juewei's recruitment menu all come from Hua & Hua. These seemingly soul-stirring, even somewhat rustic slogans have proven to hit the mark with China's most common consumer groups. A single store, combined with delivery, can cover a radius of 3-5 kilometers. If 10,000 stores are connected from points to a network, they basically cover every consumption venue from cities to county towns nationwide. Moutai's choice to 'stoop' to cooperate with Luckin rather than Starbucks may also be due to this. After all, this liquor company's long-cherished wish is to let ordinary people in urban and rural areas drink Moutai. The pursuit of the '10,000-store model' reflects a renewed emphasis on offline channels by enterprises. McKinsey & Company once commented on the global economic situation: '2019 was the worst year of the past decade, but the best year of the next decade.' Some use this phrase to describe the current state of China's consumer goods sector. The pandemic dealt a heavy blow to China's offline consumer goods and retail industry. During this period, the live-streaming industry rose abruptly, completing the last 'sustainable overfishing' of online channels. Customer acquisition costs continued to rise, online dividends seemed to be a thing of the past, and explosive growth became increasingly difficult. According to McKinsey market research, on the 'people-traffic' side, traffic growth is slow and acquisition costs are rising. Chinese consumers' average daily online time has reached 358 minutes, but the overall growth rate has declined by 4%; new customer acquisition costs have increased by about 20%, and operating costs on mainstream e-commerce platforms have risen by at least 10% compared to the past. Not only in the catering category, shifting to offline has become a consensus across the industry. Many emerging beauty brands that relied on the internet have also opened offline stores. For example, Perfect Diary has opened over 200 direct-operated stores and plans to open more than 400 more in the next three years. Trendy beauty collection stores like HARMAY on Shanghai's Anfu Road and THE COLORIST, with their social attributes, have successfully cultivated consumption habits among young people and are now accelerating their offline expansion. In the internet-famous snack sector, Three Squirrels, Beicaowei, Liangpin Shop, and even Weilong, the 'first spicy strip stock,' are all focusing more on offline formats. In 2021, Xiaomi's Lu Weibing set a goal at a launch event: to open 10,000 Xiaomi Home township authorized stores. Subsequently, Xiaomi launched a store-opening campaign, absorbing Huawei channel partners and counterattacking OPPO and vivo's territory. As of February this year, Xiaomi Home's specialty stores and authorized stores each exceeded 5,000, with a total of over 10,000 stores across more than 2,000 county towns nationwide. Ten years ago, Ma Yun called on everyone to open Taobao stores, and those who did reaped considerable rewards. But now, companies are striving to develop in county towns, pursuing the goal of 10,000 stores, which seems to highlight a new industry mindset: in a volatile market, the certainty brought by stable offline channels is particularly precious. 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