---
title: "Head Snack Chains Expand Aggressively: Should Regional Players Advance or Retreat?"
description: "On June 12, Mingming Henmang Group announced surpassing 10,000 stores, becoming the first local snack chain to achieve this scale. Since 2020, snack discount stores have entered a rapid expansion era, with head players expanding nationwide and consolidating through mergers. According to NielsenIQ, the snack discount store sector grew by 75.8% in 2023. In early 2024, Henmang introduced a 'zero franchise fee' policy, driving its store count from 6,000 to 10,000. Regional players face intense competition but are finding survival strategies such as product differentiation, fee waivers, alliances, and transitioning to discount supermarkets."
author: "汪海"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2024-06-30"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/-Fwu44ySxQBr2jbbvzhZhA"
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# Head Snack Chains Expand Aggressively: Should Regional Players Advance or Retreat?

> On June 12, Mingming Henmang Group announced surpassing 10,000 stores, becoming the first local snack chain to achieve this scale. Since 2020, snack discount stores have entered a rapid expansion era, with head players expanding nationwide and consolidating through mergers. According to NielsenIQ, the snack discount store sector grew by 75.8% in 2023. In early 2024, Henmang introduced a 'zero franchise fee' policy, driving its store count from 6,000 to 10,000. Regional players face intense competition but are finding survival strategies such as product differentiation, fee waivers, alliances, and transitioning to discount supermarkets.

On June 12, Mingming Henmang Group officially announced surpassing 10,000 stores, becoming the first local snack chain to achieve this scale.
Since 2020, snack discount stores have entered a rapid expansion era. Until last year, head players were expanding aggressively, almost blooming across the country. This was followed by mergers and consolidation, with the two major heads quickly achieving scale. According to NielsenIQ data, **the snack discount store sector grew by 75.8% in 2023.**
At the beginning of this year, Henmang announced a "0 franchise fee" policy. From January 22 to April 30, 2024, franchisees of Snacks Very Busy and Zhao Yiming Snacks nationwide could enjoy zero franchise fees, zero management fees, zero training fees, zero service fees, zero profit on decoration, a one-time opening subsidy of 100,000 yuan, and for store signs exceeding 20 square meters, a subsidy of 300 yuan per square meter for the excess, to attract franchisees and drive rapid growth.
Driven by this policy, **Henmang quickly expanded from 6,000 stores at the beginning of the year to 10,000, becoming the first to achieve 10,000-store scale.**
Over the past two years, under the snack discount store trend, a large number of entrepreneurs have entered this track. Currently, there are countless regional snack stores of various sizes across the country, ranging from a few to dozens, or even one to two hundred. As head snack chains expand aggressively, what should these regional players do?
**Snack Stores Blooming Everywhere**
According to relevant institutional reports, in 2023, China's snack market size reached 1,165.4 billion yuan. Behind this massive trillion-yuan consumer market, many regional players have also contributed their share.
**As of October last year, the number of snack discount stores in China exceeded 22,000,** with countless snack store brands of all sizes.
The following is a list of some regional snack store brands compiled by New Distribution at that time:
Since the second half of last year, head systems have begun to attack each other and expand their territories. For local regional snack stores, facing stronger opponents is undoubtedly anxiety-inducing and panic-inducing. The main reasons are:
> 1. With strong capital support, head systems quickly seize high-quality locations in the region. 2. On the supply side, head systems have cost advantages that regional stores cannot obtain, and with strong product selection teams, they can offer more competitive product combinations.
>
> 3. Head snack store systems have stronger operational capabilities, coupled with greater discount intensity, which regional stores cannot withstand.
In terms of capital strength, price, product mix, and operational capability, regional snack stores find it difficult to compete with head systems. Therefore, **during the rapid expansion of head players, many regional snack stores have been integrated or acquired.**
For example, Wanchen Group successively integrated Lu Xiaochuan, Laiyoupin, Haoxianglai, and Yadiyadi, unifying them under the name "Haoxianglai Brand Snacks"; Snacks Very Busy integrated Qiahuo Puzi; Ai Snacks acquired the local Chengdu snack brand "Dinosaur and Teddy"...
Head players are expanding and acquiring aggressively to increase scale. Under this wave, many regional snack brands have closed down. However, there are still many snack brands operating and seemingly finding their own way to survive.
**Survival Strategies of Regional Players**
Recently, while visiting the market, I saw some cases of regional snack stores.
For example, in a regional market in South China, the first Snacks Very Busy store opened at the beginning of last year, followed by successive layouts throughout the year. There are many local snack discount store brands, and through exchanges with their leaders, I learned some specific situations.
The site selection logic of regional snack stores is originally learned from head players. Therefore, when head players expand into the region, most of their stores are nearly adjacent to local snack brands. On the same street, two or even three snack stores directly form a confrontational relationship.
**"Head players are already a ferry, while we are just a small boat,"** said the head of a local snack store. Unable to sit idly, regional brands have taken a series of countermeasures.
First, **for adjacent stores that lack competitive advantages, closing them is the best defensive strategy.** Adhering to a sense of responsibility to franchisees, the leader believes it is wise to stop losses in time and avoid the opponent's edge.
At the same time, to counter competition from foreign head brands, canceling franchise fees is also one of the defensive actions local snack stores can take.
Additionally, based on local characteristics, they create product differentiation. Besides stocking categories loved by local consumers, they introduce some internet-famous products.
Furthermore, as local competitors, after the arrival of head players, local snack store brands have transformed from competitors to partners, and some projects even involve joint co-creation.
Of course, in the view of local snack stores, the expansion of head players has brought considerable pressure, but it is not all bad. **The arrival of head snack stores has played a role in educating local consumers and suppliers.**
Through the voice of head snack stores, local consumers' awareness of the snack store format has been quickly established, heating up the local snack store atmosphere. After this wave "swept" the market, local snack stores with a certain scale have bypassed local distributors and directly sourced from manufacturers or distributors in other regions with lower prices, which is now common.
**Seeking Development in Survival**
On one hand, there is pressure from head players; on the other, a deteriorating market environment. How to seek development while surviving is an important topic for regional snack stores today. After visiting the market, I found that efforts are mainly focused on the following aspects.
**1. Product Differentiation**
Head snack store systems are less flexible in regional product differentiation. Local snack stores, being closer to consumers and more aware of local preferences, can match regional differentiated products.
However, I also noticed an interesting phenomenon: head systems have begun to explore regional differentiation. For example, a head snack store in Guangdong has stocked local specialty sodas.
When head systems move past the land-grabbing phase and start regional differentiated operations in products, the advantages of regional snack stores in this regard will no longer exist.
**2. Canceling or Reducing Franchise Fees**
Some regional snack stores have earlier introduced policies to cancel or reduce franchise fees, encouraging more hesitant franchisees to join. However, at the beginning of this year, head systems also announced in their new franchise policies the cancellation of franchise fees within a limited period, along with more substantial subsidies. Currently, regional snack stores have no advantage in this regard.
**3. Regional Players Unite for Warmth**
To survive better, regional players turn enemies into friends and unite against external threats, transforming from competitors to partners, establishing local snack store alliances, and jointly purchasing to expand scale in disguise.
How such alliances operate specifically and how much help they can bring remains to be seen.
**4. Transitioning to Discount Supermarkets**
The pattern of the snack discount store track is basically set. Next, entering multi-category discount supermarkets is an opportunity, which has almost become a consensus among industry practitioners.
I have learned that some snack store entrepreneurs are currently focusing on discount supermarket projects. Some have already opened stores and started recruiting franchisees, while others are preparing to enter.
In fact, the most important thing in retail is site selection. **Good locations are scarce, and advantageous spots are "preemptively" occupied by local snack stores.** Head players cannot just take them at will; this is the last fortress of regional snack stores.
It is worth noting that in the second half of last year, many believed that once head systems entered a regional market, local snack stores would quickly disappear. But physical retail is not like the internet, where cost and scale advantages lead to smooth sailing and winner-takes-all. Having withstood several rounds of attacks from head systems, many regional snack stores still survive like "indestructible cockroaches."
**From August 20-22, 2024, the '2024 6th China FMCG Conference' with the theme 'Crossing the Shrinking Era' will be held grandly in Shanghai. Concurrently, the '3rd China FMCG Hard Discount Conference' will also be held, inviting founders of head and regional discount retail, as well as brand executives and regional major distributors, to discuss the development direction of discount retail. The following topics will be deeply explored: How manufacturers can seize incremental opportunities in hard discount / Product operation management under integrated distribution and retail / Practical paths for traditional retail transformation to hard discount / Supply chain and product portfolio organization for multi-category discount retail. Interested friends are welcome to scan the QR code to inquire about the details of this conference!**


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