---
title: "From Good Reputation to Trust Test: Consumers Re-evaluate HotMaxx"
description: "Consumers are re-evaluating HotMaxx after a counterfeiting scandal and store closures, while the discount retail chain faces challenges from supply chain instability, rising rents, and intense competition."
author: "晴山"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2026-01-08"
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# From Good Reputation to Trust Test: Consumers Re-evaluate HotMaxx

> Consumers are re-evaluating HotMaxx after a counterfeiting scandal and store closures, while the discount retail chain faces challenges from supply chain instability, rising rents, and intense competition.

**Source** | Lingshou
**From Good Reputation to Trust Test**
"I used to regularly buy personal care products at HotMaxx, such as shampoo, body wash, and sunscreen, at prices that could be half or even less than at supermarkets," Zhou Ying (pseudonym) told the author.
Zhou Ying, born in the 1980s, works at a publishing house in Beijing. Since a HotMaxx store opened in a mall near her home, she has frequently visited to buy daily care products, as well as drinks, snacks, and toys for her children. "Compared with traditional supermarkets, I can save a lot of money," she said. "At that time, HotMaxx had a good reputation, and many of my colleagues often shopped there too."
The turning point came in August 2023, when multiple media outlets reported on a case involving counterfeit cosmetics.
In early April 2023, the Nicheng Police Station of Pudong Public Security Bureau received a report alleging that a discount store was selling suspected counterfeit brand-name shampoo, body wash, and sunscreen. Subsequently, Pudong police set up a special task force to investigate the case, ultimately finding that the store was selling products of the brand that were counterfeit registered trademarks, with an involved amount exceeding 17 million yuan.
According to China Cosmetics News, the discount store in question was identified as being related to HotMaxx. Police seized more than 150,000 counterfeit shampoo, body wash, and sunscreen items in multiple logistics warehouses in Guangdong, Sichuan, and other places, involving brands such as Kuyura, Tsubaki, and fino (formerly under Shiseido), and arrested six suspects, including Tang, Qin, and Zhang.
After the news broke that HotMaxx was investigated for selling counterfeit cosmetics, Zhou Ying said that she and many people around her began to be cautious when shopping at HotMaxx stores. "Anyway, I never dared to buy personal care products at HotMaxx again."
"The HotMaxx store downstairs from us recently closed; I used to often buy snacks there, but now I have to go farther," said Lily (pseudonym), who works in Beijing.
Lily, born in 1989, works at an internet company in Beijing and likes to "hunt for bargains" at the HotMaxx store downstairs. According to her, the store is located in Beijing Wanliu Huayi Shopping Center, not large in size, but with a wide variety of snacks and prices much cheaper than convenience stores.
"A bottle of Perrier for 3 yuan, a blue tin of cookies for 10 yuan, and a bottle of Genki Forest for 2.5 yuan—these items are a third cheaper than in supermarkets," Lily said. She would visit once or twice a week to buy snacks and daily necessities.
But starting about a year ago, Lily noticed a significant decrease in foot traffic at the store. "Previously, on weekends, there would be queues at the checkout, but now the store is deserted," she said. In June this year, the store closed completely.
The closure of HotMaxx stores in Lily's city is not an isolated case. According to media reports, since 2024, HotMaxx has closed multiple stores in various cities.
**The "Aftermath" of Aggressive Expansion**
Recently, media reported that HotMaxx is gradually closing stores in core cities such as Guangzhou, Changsha, Hangzhou, and Beijing, and has slowed its store opening pace, with some cities suspending franchise recruitment.
In response, on December 18, HotMaxx stated that store closures are normal business decisions by franchisees or directly operated stores, and that the overall annual closure rate is no more than 5%. "Deliberately slowing down" is HotMaxx's steady development strategy, not a halt to franchising.
According to Nandu Wan Cai She, since this year, HotMaxx's store scale has indeed shown a stagnant or even negative growth trend. In June 2024, HotMaxx had 960 stores, and despite opening new stores, its store count has not increased over the past approximately 18 months.
Looking back at its development, in April 2023, HotMaxx officially opened franchising, when it had only over 500 stores covering 32 cities, but set an aggressive target of adding 600 new stores in the year. Driven by the franchise model, HotMaxx's store count grew rapidly, reaching 960 by June 2024, nearly doubling in just over a year.
However, the pressure brought by this rapid expansion has begun to show.
First, there is supply chain instability. HotMaxx's initial core advantage lay in the "soft discount" model, which attracts customers by selling near-expiry, out-of-season, defective, and clearance products at discounted prices. The essence of this model is unstable supply.
According to data from Zhaimen Canyan, as of October 2023, among HotMaxx's 499 stores, 9 were temporarily closed. A person from the near-expiry food industry at the time said that procurement prices were rising, and corresponding profits were shrinking. In 2021, gross profit margins for near-expiry products could reach 50%-60%, but as competition intensified, near-expiry products became more sought-after, procurement prices rose, and profits fell to only about 30%.
Second, rental cost pressure has increased. HotMaxx internal staff previously told the media that store closures were mainly due to mall rent issues, proactive adjustments after lease expiration, or losses from poor operations at some stores.
It is understood that the most frenzied expansion of near-expiry discount stores occurred during the pandemic, when some brands densely opened stores around malls or office buildings. At that time, shopping center vacancy rates were high, and they were willing to make concessions on store area and rent discounts.
But as the pandemic became a thing of the past, rental costs began to rise. Some early stores, due to their small size, could no longer meet operational needs; some stores had to be relocated due to lease expiration or the diversion of customers by new commercial complexes; and some early stores had signed rental agreements at costs significantly higher than current market levels, so after failing to negotiate rent reductions with malls, they needed to change locations to control costs.
Third, there is the issue of adaptation to lower-tier markets. An industry insider said that HotMaxx's efficiency advantage largely relies on the logistics system and brand awareness in first-tier cities, while lower-tier markets not only have higher logistics costs, but also differ in consumer sensitivity to discounted goods and demand structure.
**Difficulties in Breaking Through Amid Intensifying Competition**
While HotMaxx's expansion faces obstacles, the competitive landscape of the discount retail track has also undergone fundamental changes.
First, the rapid rise of snack bulk stores.
According to iiMedia Research data, the market size of China's snack collection stores was 80.9 billion yuan in 2023, and is expected to reach 123.9 billion yuan by 2025.
These snack bulk stores, by adopting a model of "not charging manufacturer fees, not pressing supplier payment terms, and not accepting returns," obtain lower "bare price" space. Tan Zhiwang, a partner at AngelVest Venture Capital, once publicly stated that the markup rate of snack discount stores is the lowest among all chain formats, with product gross margins generally below 10 points, store margins below 20 points, and overall gross margins usually around 30 points.
In comparison, although HotMaxx uses a discount model, its price advantage is no longer obvious in front of snack bulk stores.
Second, the diversion of sales by instant retail and brand direct sales channels. Multiple industry insiders told the author that brands are more willing to give inventory to live-streaming, instant retail, or e-commerce private domain channels, leaving less space for offline discount stores.
Finally, the discount transformation of traditional retail giants has further intensified competition.
At present, when shopping in supermarkets, consumers can see private-label low-price products, and can also buy near-expiry snacks online, while HotMaxx's uniqueness is weakening.
In addition, hard discount brands are accelerating expansion—JD.com, Meituan, and other giants have also entered the offline discount store market, seizing market share through large-scale procurement; Hema upgraded "Hema NB" to "Super Hema NB" and opened franchising, leveraging its private label and supply chain advantages to push daily necessities prices to industry lows; Aldi expanded beyond Shanghai, opening stores densely in Jiangsu; and Jingxi Cang officially opened, claiming to build new underlying capabilities...
Meanwhile, competitor Hi-Tech Go, after completing a B-round financing of 100 million yuan in 2024, accelerated store expansion. Its product structure highly overlaps with HotMaxx, and it has an advantage in beauty clearance goods.
"Previously, HotMaxx's tube-end cosmetics samples were very attractive, but now Hi-Tech Go not only has affordable prices but also a wide variety," said a beauty enthusiast.
Facing multiple competitive pressures, HotMaxx is attempting to adjust.
It is understood that HotMaxx is increasing investment in AI technology, analyzing regional consumption preferences to achieve "thousand stores with thousand faces" product selection—residential area stores stock more children's snacks, while business district stores focus on beauty and trendy toys.
In addition, the super warehouse model has become a new pilot. Judging from the first store in Shenyang, it is positioned as a "city outlet," locking in high-end beauty supply through "near-expiry exclusive sales," attempting to create an experiential consumption scenario.
Many industry insiders believe that the core competitiveness of discount retail will ultimately return to cost-effectiveness and trust. If low prices come at the expense of quality and transparency, they may instead weaken the brand's long-term value.
HotMaxx's situation reflects the transformation pains that the entire discount retail industry is experiencing.
As market dividends fade and consumers begin to re-examine the value behind "low prices," discount brands need to answer not just "how to be cheaper," but "how to be better."
**[Moving Toward C-End] The 11th China FMCG Conference**
**Time: March 16-18, 2026**
**Location: Chengdu, China**


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## Citation metadata

- Publisher: New Distribution
- Author: 晴山
- Published: 2026-01-08
- Canonical: https://xinjignxiao.com/en/articles/from-good-reputation-to-trust-test-consumers-re-evaluate-hotmaxx-fa598208/
- Original source: https://mp.weixin.qq.com/s/UVwDu_vG_nw4QEp7KNiD0Q

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