****Introduction: The curtain has risen on China's retail discount transformation. By the end of 2023, the number of snack discount stores nationwide is expected to reach 22,000-25,000, with sales scale of 70-80 billion yuan. Compared to 2020, it has grown more than 10 times in 3 years, and growth continues. At the same time, hard discount stores in different categories and forms are accelerating growth: Leerle, Biyide, Tiaoma, Jinbaibai, Discount Niu, Aotele, Xunwushe, Duoletun... The list can be extended further. In October this year, Hema officially announced a comprehensive discount transformation for its stores. Not only Hema, but Yonghui has set up genuine discount sections, and Jiajiayue has opened snack discount stores... Traditional retail is seeking discount transformation. The underlying logic of discount retail is hard discount, which means providing consumers with high-quality, low-priced products by selecting categories/SKUs and compressing supply chain links. Hard discount is a business model with long-term vitality. From a long-term perspective, its development in China is just beginning. Hard discount will reshape the production, sales, and supply landscape over the next 5-10 years. "New Distribution" has specially compiled and released the China Discount Chain Brand TOP List, including three parts: snack discount stores, discount supermarkets/warehouse chain brands, and traditional supermarket discount transformation/attempts. Snack Discount Chain Brands Snack discount stores are vertical category hard discount. They have optimized the supply side for the snack category. Compared with surrounding competitive formats/contrast scenarios (such as supermarket/ mom-and-pop store snack areas): Vertical category hard discount stores have formed an absolute advantage of greatly increased product richness and significantly reduced prices. Supermarket snack areas typically have only a few hundred SKUs, while snack collection stores generally start with a thousand SKUs. Supermarket snack products go through multiple transfers and markups, resulting in higher prices, while snack collection stores mainly use single transfer with lower markup rates, so retail prices have a clear advantage. Category advantage is crucial: In a certain category, compared with contrast scenarios, forming advantages of large display (high product richness) and low prices is the key condition for the establishment of vertical category hard discount. Discount Supermarket/Warehouse Chain Brands Hard discount is a business model. Snack hard discount is the product of combining the vertical snack category with the hard discount business model. Vertical categories are the easiest to break through in the supply chain and are relatively easy to scale and replicate, which is an important reason for the rapid explosion of snack discount stores. However, whether vertical categories can form long-term targeted customer traffic remains to be seen. Vertical category entry is the fastest, but it is not a terminal format and will evolve towards composite category advantages. Community discount supermarkets/warehouse stores need to optimize multiple categories simultaneously, making supply chain breakthroughs more difficult, which is an important reason why they are generally smaller in scale compared to snack discount stores. But once a composite category advantage is formed, it is easy to create targeted customer traffic and better profit structures. With different category combinations, different consumer segments, and different regional markets, the development of hard discount commerce in China is just beginning. The Chinese market is vast and complex, and retail formats based on hard discount logic will evolve into diverse forms during growth. Traditional Supermarket Discount Transformation/Attempts Discount retail has lowered offline market price levels, and traditional supermarkets have also joined this discount wave. Hard discount is not only an improvement in sales form, but also an optimization of the supply chain. Retail enterprises in lower-tier markets, including players with relatively small sales scale (annual sales within one billion yuan), lack the financial resources and sales capabilities to complete discount transformation and must combine with external forces. Larger retail enterprises have the strength, but changing their mindset is not easy and requires strong determination. Some of the above discount attempts belong to soft discount selling near-expiry products. The key to distinguishing hard discount from non-hard discount is whether the supply side has been optimized. Since traditional retail discount transformation/attempts are in the early stage, whether they can successfully complete hard discount transformation/attempts remains to be observed. ** _ Note: This list is produced by New Distribution and is not complete industry information. If there are data errors or information omissions, please contact us!_** From December 5-7, 2023, the 2023 China FMCG Hard Discount Conference hosted by "New Distribution" will be held in Zhengzhou. The conference brings together hard discount chain brand entrepreneurs, FMCG head brand executives, outstanding national FMCG distributors, traditional retail enterprises, as well as service providers and research experts:
Create a platform for hard discount practitioners to share insights, experiences, and in-depth exchanges.
Multi-dimensional perspectives to thoroughly explain the underlying logic, practical cases, and long-term trends and opportunities of hard discount.
Create opportunities for deep dialogue and precise matching among different roles in the industry chain. If you are also interested in hard discount, you can scan the QR code to add customer service WeChat, consult the details of the Hard Discount Conference, and join the [Hard Discount] themed community to discuss the development trends and opportunities of hard discount.