---
title: "Hard Discount: The Curtain Rises!"
description: "In 2023, FMCG manufacturers and distributors faced extreme difficulties. As industry observers, we have firsthand insights. Manufacturers told us: \"Discount stores only care about price, not our overall marketing services, but we are forced to cooperate due to performance pressure!\" Distributors said: \"Business has dropped 50% directly; instead of letting snack discount stores take it away, can I do it myself?\" The trend of discounting is sweeping the entire retail industry, with snack discount stores booming and traditional retailers seeking transformation. Hard discount, as an underlying logic, is irreversible, broad in impact, and long-term, reshaping the production and supply landscape for the next 5-10 years."
author: "任文青Andy"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2023-11-03"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/P6PyF8cONPh73Ed6PqDWzw"
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---

# Hard Discount: The Curtain Rises!

> In 2023, FMCG manufacturers and distributors faced extreme difficulties. As industry observers, we have firsthand insights. Manufacturers told us: "Discount stores only care about price, not our overall marketing services, but we are forced to cooperate due to performance pressure!" Distributors said: "Business has dropped 50% directly; instead of letting snack discount stores take it away, can I do it myself?" The trend of discounting is sweeping the entire retail industry, with snack discount stores booming and traditional retailers seeking transformation. Hard discount, as an underlying logic, is irreversible, broad in impact, and long-term, reshaping the production and supply landscape for the next 5-10 years.

In 2023, FMCG manufacturers and distributors faced extreme difficulties. As industry observers, we have firsthand insights.
**Manufacturers told us:**
> "Discount stores only care about price, not the manufacturer's overall marketing services. We are forced to cooperate due to performance pressure!"
>
>
>
>
> "The overall market trend is here, so we must embrace it, but price control is a big issue. How are other brands handling it? Can you share?"
**Distributors told us:**
> "Business has dropped 50% directly. Instead of letting snack discount stores take it away, can I do it myself?"
> "Survival is very difficult now; I don't know if I can make it through this year..."
**Traditional retail enterprises also had in-depth exchanges with us:**
> "Everyone around is doing low prices; if we don't follow, we have no way out, but the pressure is huge, after all, it's different from running a supermarket before."
Everyone's topics revolve around two words: **low price, discount.**
Yes, the wave of discounting has hit the entire retail industry.
We have seen the explosion of snack discount stores.
By the end of 2023, the number of snack discount stores nationwide will 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.
We have seen that in October this year, Hema officially announced a comprehensive discount transformation for its stores.
Not only Hema, but Yonghui has set up genuine discount zones, and Jiajiayue has opened snack discount stores... **Traditional retail is seeking discount transformation.**
We have also seen that discount stores of different categories and forms are accelerating growth: Tiaoma, Biyide, Jinbaibai, Discount Niu, Aotele, Xunwushe, Duoletun...
This list can be extended further.
**Discount stores suddenly became the focus of industry attention, and many people don't understand:**
> "How can quality be guaranteed when selling cheap products?"
>
>
>
>
> "How can low prices be sustainable?"
>
>
>
>
> "It damages my brand image; I firmly resist!"
While many hesitated, some brands made a fortune.
Yanjin Puzi increased cooperation with various snack store systems in 2021. In 2022, Snack Busy surpassed Walmart and Bubugao to become its largest customer. On July 7, the company released its semi-annual performance forecast, expecting net profit attributable to listed company shareholders of approximately 240-250 million yuan in the first half of this year, a year-on-year increase of 86.29%-94.05%.
Brands like Ganyuan and Jinzai also benefited from the new channel dividend.
These enviable numbers have prompted brands that had kept a distance from snack stores to actively embrace them.
More and more brands are contacting New Distribution to connect with snack discount stores.
But during communication, they often ask a question:
"Snack stores will only last a year or two, right? ... It won't last too long, will it?"
The implication is that they are not optimistic, but since there is sales volume, they might as well sell now.
Having such a mindset is not wrong; sales volume is most important, but clearly, they have not seen the more important things.
What does that mean?
Let me tell a story you are definitely familiar with.
At the beginning of the 20th century, Ford introduced the Model T, which was welcomed by consumers and achieved great success in the market. The Model T became one of the iconic models in automotive history.
Many people know that the success of the Model T was significant for Ford, but you may not know where its true impact lies.
Ford's special place in history is not because it introduced an affordable car for ordinary people, but because it used a revolutionary assembly line to achieve large-scale, high-efficiency production in automobile manufacturing.
The development and change of anything can be divided into two parts: **the easily visible and the not easily visible.**
The Model T is easily visible, but the assembly line behind it is not easily visible.
Low prices, street-side stores, and chain brands are easily visible, but the business model and supply chain behind them are not easily visible.
Many people view discount stores as just selling cheap products and think they cannot last, but **selling cheap products and making products cheap are two different things.**
Unlike soft discount, which achieves low prices through clearance and tail-end inventory, hard discount selects categories/items, compresses the supply chain, and provides consumers with quality products at low prices. This is called hard discount.
**Hard discount is about making products cheap.**
The explosion of snack stores, the transformation of traditional supermarkets, and the emergence of community discount supermarkets all share a common keyword—hard discount.
How long will snack stores stay hot? Are they a capital bubble? Which brand will become the winner?
These questions, when viewed over a longer cycle, are not important.
**The forms of expression will change, but the underlying logic of hard discount will transcend cycles.**
Why do we say that?
From a long-cycle, industry chain perspective, New Distribution believes hard discount has the following three characteristics.
**First, it is irreversible.**
Hard discount is essentially not a retail format but a business model that pursues extreme efficiency.
Hard discount selects categories/items, compresses the supply chain, and omits all unnecessary links, bringing about an efficiency revolution.
When an efficient model emerges, it will inevitably squeeze out and replace the original inefficient model. This is the direction of business evolution and is irreversible.
**Second, it has broad impact.**
This efficiency revolution will inevitably impact the current channel system, affecting manufacturers/brands, distributors, and retail terminals in the industry chain.
**Third, it has a long cycle.**
Hard discount is a business model with long-term vitality. From a long-term perspective, its development in China has just begun. Hard discount will reshape the production and supply landscape for the next 5-10 years.
Snack discount stores are a product of combining the snack vertical category with the hard discount business model, and are a form of hard discount.
China's market is vast and complex. Different category combinations, consumer segments, and regional markets will evolve into diverse retail formats based on the hard discount logic.
The wave of discount retail has arrived, and the trend is irreversible.
**Under performance pressure, are brands only treating discount stores as an incremental channel?**
That is far from enough!
Some brands have already treated hard discount as a strategic unit, taking the lead in seizing the key opportunity to cross cycles and achieve hard growth.
**Local trade systems are being impacted; can distributors only sit and watch their business be taken away?**
Leveraging supply chain advantages, entering hard discount, and transforming into service providers—we see that excellent distributors have already participated in the construction of the new ecosystem.
**With the discount era coming, where is the way out for traditional retail?**
Hard discount is not about form but about thinking, models, and supply chains. In Hubei, Shandong... we see that traditional retail has successfully transformed to hard discount, and there are reference paths for practice.
**Standing at the crossroads of history, everything is accelerating change.**
**In December 2023, New Distribution will hold the First China FMCG Hard Discount Conference in Zhengzhou.**
**This conference, with a 2-day agenda, is the industry's first conference focused on the hard discount theme.**
**We gather hard discount chain brands, leading FMCG brands, traditional retail enterprises, outstanding national FMCG distributors, as well as industry service providers and research experts:**
**First, create a platform for hard discount practitioners to share insights, experiences, and in-depth exchanges.**
Discount retail is practice rather than theory. Gathering practitioners, building a scene for deep exchange and collision, providing entrepreneurs entering hard discount with cognition, path references, and resource matching.
**Second, from a multi-dimensional perspective, thoroughly explain the underlying logic, practical cases, and long-term trends and opportunities of hard discount.**
Focusing on hard discount, the key is not the current competition at the retail end, but its impact on the industry chain.
The industry's first 1000+ person conference focused on the hard discount theme, bringing together founders, operators, and executives from the upstream and downstream industry chain to collide, enhance cognition, and broaden industry horizons.
**Third, create opportunities for deep dialogue and precise matching among different roles in the industry chain.**
Brands, distributors, mainstream retailers, discount retailers, capital, service providers, and consultants—seven types of roles in the upstream and downstream industry chain—will deeply interpret the hard discount business model, co-create discussions on development trends, and cooperate across the industry chain.
"There are cracks in everything; that's how the light gets in!"
Those who stick to traditional models see destruction and impact, while those who perceive trends see opportunities—the chance to start over.
Hard discount will reshape the production and supply landscape for the next 5-10 years. Take the lead, seize the key opportunity, and achieve hard growth that crosses cycles.
The traditional chain is deconstructing, and a new ecosystem will be nurtured. Every role can find its new ecological niche here.
Welcome to join us!


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