" First impressions may disappoint, but parting brings nostalgia. How many people's trips to Taiwan turn into a story of 'suppression first, uplift later'? In my view, the two key factors behind this reversal are a sense of order and human warmth. Taiwan's convenience stores naturally embody both. It took 36 years for Taiwan's convenience stores to reach their current state. When asking for directions in Taiwan, almost everyone will say: when you see a certain convenience store, turn left or right... Indeed, in Taiwan, convenience stores serve as landmarks. In 2014, Taiwanese media reported that there was one convenience store for every 2,500 people, and one in three Taiwanese visited a convenience store daily. The density of convenience stores in Taiwan surpassed Japan to become the highest globally. Today, with 23 million people on 36,192 square kilometers, the number of convenience stores has exceeded 10,000. Since 1979, when Uni-President Enterprises raised NT$190 million to establish 'President Chain Store Corporation' as a separate operation, the convenience store industry in Taiwan has a history of 36 years, even three years earlier than American fast-food chains like McDonald's. Like McDonald's, convenience stores were relatively upscale places at the time, with higher prices. Ordinary farmers dared not enter; they had to take off their shoes before entering. The products in Taiwan's convenience stores were not always as they are now. They once sold brooms and buckets, spending seven or eight years exploring. As consumer needs changed, operators gradually placed great importance on ready-to-eat food. The product assortment shifted from family-oriented to individual-oriented. During my high school days, three items at 7-Eleven left a deep impression: the big hot dog, slushies, and cola. Every 7-Eleven had a self-service cola machine with ice, and teenagers just needed to bring their cups. The 'Weight Cup' and 'Challenge Cup' became shared memories of a cool summer for our generation. In 1987, a significant event occurred in Taiwan: to curb the bad habit of gambling, the government closed all 'Patriotic Lottery' redemption points. Who would take over these prime locations? Just then, 7-Eleven, after seven or eight years of development, had a relatively mature business model and format, so it took over all these stores. This was 7-Eleven's first large-scale expansion. If before 2000 was the 20 years of product operation and scale development for Taiwan's convenience stores, then after 2000 was an important period for value-added services. Take Taiwan's 7-Eleven as an example: almost all services are integrated into a machine called ibon Convenience Life Station, including stored value/payment, deals/rewards, ticket center, shopping/shipping, printing/scanning, application services, life services... Most incredibly, Taiwan's convenience stores can even help you dispose of trash for free. In Taiwan, you hardly see trash cans. 'No trash on the ground' policy means some communities help residents with centralized trash disposal, but some communities lack this function, and you can't just throw trash anywhere. What to do? You have to wait for the garbage truck. Some working women say, 'The garbage truck doesn't come at convenient times; what if the timing doesn't match?' So 7-Eleven launched a 'We'll throw your trash' campaign, which has now become a regular service. Government departments and financial institutions delegate as many functions and projects as possible to convenience stores. Taiwan's convenience stores have become very mature in value-added services, and the generous commissions are a significant part of their profits. Unfortunately, in recent years, there has been little innovation in products across Taiwan's convenience store industry. Coffee and soft-serve ice cream (commonly known as 'black gold' and 'white gold') were innovations from a decade ago. Two new trends are worth noting: We see that seating areas in Taiwan's convenience stores are getting larger. Besides shopping and dining, stores welcome citizens to come in and sit. Friends gather, students do homework, business people discuss work. Volunteers helping working women pick up children even set the meeting point at a nearby convenience store. Besides making convenience stores community centers and tourist centers, Taiwan's 7-Eleven is also experimenting with new store formats in cooperation with Mister Donut, which it represents. Today, the convenience store industry in Taiwan, in my view, is a stable continuation; business models and products have not changed much. In contrast, the mainland Chinese market sees new changes every day. We have been following Yihaodian, which initially focused on FMCG, but suddenly they started selling fresh produce. JD.com, originally a vertical e-commerce platform focused on 3C products, has also entered FMCG. After fresh produce, they moved into low-temperature products, which happen to be very important categories for our convenience store industry. So, where is the convenience store industry we are engaged in on the mainland ultimately heading? Will it converge with Taiwan's convenience stores? I can only tell you, I don't know what will happen tomorrow. What services are not available in Taiwan's convenience stores? Eating, working, dating, borrowing the restroom, throwing trash, buying tickets, hailing taxis, emergency shelter... Even young clerks might mistake a 'middle-aged weird uncle' sitting alone writing furiously as 'unemployed, frustrated, and lonely,' and seriously ask, 'Do you need help writing a resume?' So, what services are not available in Taiwan's convenience stores? Q1: How many value-added services do Taiwan's convenience stores offer? According to data from President Chain Store Corporation, as of August 18, 2015, 7-ELEVEN offered more than 700 value-added services. In an interview, a senior executive of President Chain Store said that the original intention of setting up ibon was 'to provide a bit more services and attract more customers to the store. Unexpectedly, the number of services kept increasing.' In terms of sources, value-added services in Taiwan's convenience stores can be roughly divided into two categories: one from government departments, and the other from financial institutions. To help working women deal with household waste, 7-ELEVEN launched the 'Free Trash Disposal' campaign, which became a regular service due to its popularity. These are self-initiated projects by convenience stores, indirectly assuming certain social functions. After 2000, the Taiwanese government and financial institutions, to improve operational efficiency, released a large number of 'less important functional projects' and entrusted lower-profit projects to third parties. Thus, the era of explosive growth in value-added services for Taiwan's convenience stores began. Of course, it was not accidental that Taiwan's convenience stores took over these services; the scale of the retail network was a prerequisite. Q2: What have value-added services brought to Taiwan's convenience stores? In 2005, Taiwan's 7-ELEVEN introduced ibon, integrating almost all services into this multimedia kiosk. Besides 7-ELEVEN, Taiwan's FamilyMart also has a self-service machine called FamiPort. By 2015, President Chain Store upgraded to ibon 2.0 and launched an app to meet consumers' mobile needs. At the same time, FamilyMart also updated its second-generation machine. The costs for upgrading the multimedia kiosks were NT$800 million for President Chain Store and NT$400 million for FamilyMart. Data from President Chain Store shows that in 2014, 150 million people used ibon, processing 150 million transactions, with an average of 6.39 uses per Taiwanese per year. The most used services were bill payment, tickets, and taxi hailing. With the addition of multiple value-added services, Taiwan's convenience stores have not only integrated into the lives of every Taiwanese in a subtle way but also brought substantial profits to store operations. According to industry insiders, revenue from service projects accounts for over 30% of the total net profit. So, the multimedia kiosk is the 'shelf' with the highest sales per square foot in Taiwan's convenience stores. Q3: Why haven't value-added services in mainland China's convenience stores taken off? Taiwan's convenience store operators have brought these models to mainland China. However, on the mainland, there are many e-commerce platforms that can do these things for you, and they do them quite well. Alipay is a mobile version of ibon, integrating utilities, tickets, and city services. Strict government regulations are also a significant reason. Moreover, the integration of value-added services has not brought significant changes in foot traffic or revenue to convenience stores. A convenience store company in Shanghai cooperated with Tmall three years ago to offer 'package collection.' Now, on weekdays, convenience stores around mid-to-low-end residential areas receive an average of about 30 packages, but during Double 11 or Double 12, the volume surges to over a hundred. With declining commissions, this service is no longer enough to cover operating costs. This company suspended its cooperation with Tmall in the first half of this year. Fresh food products are also increasing. The convenience store format, which originated in the United States but flourished in Japan and Taiwan, later developed into two important branches: traditional convenience stores represented by Japan and Taiwan, and gas station convenience stores represented by the United States. Today, in traditional convenience stores in Asia, fresh food products are increasing. If you rate on a five-point scale, how are cold food, hot food, coffee+ice cream, and low-temperature products laid out in convenience stores in Japan, Taiwan, and Shanghai? What factors determine this? ▲ Image from Lianshang Column Mr. Z Cold food (boxed meals, sushi, sandwiches, etc.) Japan has the most cold food items. Convenience stores have three or more rows of boxed meals, and sushi and hand rolls have large display areas. However, you'll find that in Taipei, convenience stores have slightly more boxed meal facings, but in places like Hualien City, there are very few. In Shanghai, convenience stores near office buildings can sell two to three hundred boxed meals a day, but sales are poor in general stores. Why are there such differences? On one hand, Japanese people naturally like cold food. Secondly, Japan doesn't have as many street vendors as Taiwan and Shanghai. Most importantly, the cost of physical stores in Japan is high, leading to higher product prices. A basic ramen in Japan costs 600 yen (about 35.7 RMB), while a boxed meal of similar quality costs only 450 yen (about 26.8 RMB). Incidentally, Japanese convenience store boxed meals are made with high craftsmanship and stored at 18°C, maintaining excellent quality and taste. Taiwan's rents are much lower than mainland China's, so the survival environment is better. With lower physical store costs, product prices are relatively lower, so cold food, especially boxed meals, doesn't sell well in Taiwan's convenience stores. Diverse street-side food shops have replaced some functions of convenience stores. ▲ A Taiwan 7-Eleven store ▲ Taiwan 7-Eleven's 'Shi'an Ranch Hot Spring Egg' Hot food (Oden, buns, etc.) Japanese convenience stores have hot food, but relatively little, with the main item being 'Oden,' which Chinese consumers know well. Taiwan's convenience stores also have Oden. In Taiwan's 7-Eleven, the central island facing the entrance is usually for Oden. But sales are not large, also affected by street-side shops. ▲ Common product layout in Taiwan 7-Eleven ▲ Hot food central island in Taiwan 7-Eleven Shanghai consumers are accustomed to hot food, so the proportion of hot food is very high, with a full range of items and a significant contribution to sales. Unlike Taiwan, where consumers can serve themselves hot food in convenience stores, Shanghai has many government regulations: operators must have health certificates, and staff must serve the food. Because hot food sells well, Shanghai's convenience stores pay less attention to boxed meals, which are stored at only 10°C, resulting in poorer taste compared to Japanese boxed meals. Coffee + ice cream Coffee+ice cream is called the 'black gold and white gold' of convenience stores in Taiwan, reflecting its scale and status. Coffee is one of the main profit sources for Taiwan's convenience stores, with an average of over 100 cups sold per store per day. A cup of coffee costs about NT$60 (about 12 RMB), with a gross margin exceeding 50%. Taiwanese people prefer iced coffee, so unless reminded, clerks will default to iced coffee. The most popular coffee in Taiwan is latte with sugar and milk. Influenced by American culture, black coffee without additives is very popular in Japan. Ice cream is also a very important product in Japanese convenience stores. It was popular in Taiwan's convenience stores for two years, with daily sales reaching 300 at its peak. ▲ Taiwan FamilyMart matcha festival. Image from Taiwanese journalist Li Hongdian Low-temperature products (products stored in refrigerators at 4°C) The shorter the shelf life, the higher the nutritional content, and the less harmful additives consumed. In Japan, fresh juices and teas are displayed in six or seven rows in open-front coolers. Taiwan is small, with developed transportation and abundant resources, so many farms and ranches have been developed nearby. Thus, in Taiwan's convenience stores, we can see many fresh milk and fresh juices for sale. ▲ Fresh milk stored at low temperature in Taiwan 7-Eleven In mainland China, several major pastures are located far from cities. The distance means long transportation times, so there are many yogurt products. In recent years, the proportion and sales of low-temperature products in Shanghai's convenience stores have grown rapidly. Consumers have begun to agree that eating these things is healthy. As the sales share of low-temperature products has increased, sales of beverages transported at room temperature are declining. Consumers vote with their feet for what products stores sell. Pay attention to their changes; maybe they are already changing. 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