On April 17, in the 2022 China convenience store ranking released by the China Chain Store & Franchise Association (CCFA), Meiyijia's total number of stores exceeded 30,000, surpassing PetroChina and Sinopec, which ranked second and third, to become the brand with the most stores in China's convenience store market. This also brought it from being the 'invisible champion' of convenience stores to the forefront. Meiyijia is a chain retail enterprise focused on convenience stores, with business expansion in mainland China, Hong Kong, Macau, and Taiwan. Founded in 1996 and headquartered in Guangdong, the company has a wide range of businesses, including convenience store retail and gas station services. What is most commendable is its unique chain retail model, which radiates to more than 20 provinces and over 220 cities across the country. Unlike the asset-heavy model of some boutique supermarkets, Meiyijia's franchise model is relatively light and fast, requiring only 300,000 to 350,000 yuan to join. With small steps and fast running, Meiyijia, without too many constraints, has achieved remarkable results. In 2017, it opened its 10,000th store, with revenue exceeding 10 billion yuan; from 10,000 stores to 30,000 stores, Meiyijia took only 5 years. According to public data disclosed by the CCFA, in 2021, Meiyijia's revenue scale reached 34 billion yuan.
Success is the trend of the times
Meiyijia's success can be summed up in four words: the trend of the times. In 1996, with the gradual deepening of reform and opening up, Walmart officially entered China, which brought pressure to Meijia Supermarket in Dongguan, Guangdong, which was also the first true chain supermarket in China. In daily competition, Meijia had always been far ahead. But when the competitor directly became the international retail giant at that time, it was still stretched thin. Because at that time, it was unrealistic to defeat international retail giants in this track. To better develop the economy, this originally state-owned enterprise of Dongguan City was restructured into a private enterprise. Time is money, and Meijia's management decided to go to Europe and the United States to study and learn, discovering a new business format that was popular in the United States at the time—convenience stores. Without further ado, in 1997, Meijia spun off a team from the supermarket and officially entered the convenience store field. Thus, Meiyijia was born.
Image source: Meiyijia official website
In chain retail, companies typically provide consistent products, services, and brand image to ensure that consumers get the same shopping experience in all branches. The advantage of chain retail is that it can achieve higher profits and greater market share through economies of scale, and it can open branches in different regions and cities to meet the needs of consumers in different areas. For a long time, Meiyijia was basically rooted in Dongguan, and the times favored China's first generation of entrepreneurs. From 1990 to 2010, with the dual development of China's economy and productivity, coupled with a huge demographic dividend, Dongguan became the world's factory. Unlike many cities where the population is concentrated in urban areas, Dongguan's population is relatively dispersed, and under each town and district, there are large populations in each market. Therefore, Meiyijia decided to start covering every street, positioning itself well for the convenience store crowd, which also laid the foundation for the later 'rural encirclement of the city' strategy. But with economic upgrading, the weakening of people's social circles and increasing consumer demand gradually made the original mom-and-pop store model stretched thin. Starting in 2000, Meiyijia began building its own systems, moving towards computerization, which improved efficiency. By 2010, many mom-and-pop stores had transformed into convenience stores. In 2008, Meiyijia began to accelerate. With the outbreak of the financial crisis and the bankruptcy of Lehman Brothers, a large number of small and medium-sized enterprises contracted their original industrial layouts, and Guangdong's foreign trade industry was greatly impacted. To avoid money being stuck in banks, business owners began to invest outward. Because the convenience store industry had a good development situation and relatively stable cash flow, it became their first choice for investment. From then on, Meiyijia transformed from mom-and-pop store franchises to investor-led. With a certain foundation, expansion was put on the agenda, but Meiyijia remained cautious and steady. After covering the entire Guangdong market, it began to enter Fujian, because Fujian is adjacent to Guangdong and consumer habits are relatively similar. Soon, Meiyijia began to expand to other provincial markets. Based on market feasibility surveys and profit models, it invested a large amount of resources to develop the market, ensuring profitability within the agreed time. A few years later, with the nationwide entrepreneurship drive, in 2015, Meiyijia began to go further down, directly to county-level and township markets, and the overall store scale began to grow rapidly. This also benefited from the development of the county economy, the continuous improvement of people's income, and many people returning from cities to their hometowns to start businesses, which drove consumption. At the end of 2022, Meiyijia's leader Zhang Guoheng revealed at the '2022 China Convenience Store Conference' that Meiyijia had covered 4,385 townships.
Internal strength is still important
With the improvement of consumers' living standards, competition in the retail industry has become intense, and chain retail is occupying an increasing share of the market. Especially in China, the chain retail industry has shown explosive growth and has also become a future trend. Consumers vote with their feet, and chain retail stores have become the first choice for daily shopping. To do well in convenience stores, internal strength is equally important. The team is the key point. Meiyijia's team is stable. When going out from Guangdong to 'fight' across various provinces and cities, the core team is basically cultivated from Guangdong, with a complete training mechanism. From Guangdong, they first go to other places, and once mature, they will export some talents to new provinces. In addition, a generous distribution mechanism is also essential. Talents must be retained so that they can follow Meiyijia's pace to develop in various places. Currently, Meiyijia has begun to classify its business and adopt diversified market strategies and tactics. In high-end markets, such as first-tier cities and surrounding cores, it uses tactics similar to Japanese-style convenience stores. Whichever level of market it wants to enter, it will determine integration according to the market. New-style stores, standard convenience stores, and life stores are mainly divided into these three store types. In terms of internal strength, the core competitiveness still cannot be separated from accurate positioning. Since its establishment, Meiyijia has been deeply rooted in communities. Positioning itself in communities is an important strategy for Meiyijia's differentiated competition in the retail industry. Unlike some other brands that only want to capture young people, Meiyijia has always regarded the community as its growth space. Many franchisees in southern and central China provinces recognize Meiyijia because of the trust brought by every Meiyijia store in the community when they did business in Guangdong. When implementing its national strategy, Meiyijia has more confidence because there was no nationwide convenience store in China before. When entering a new market, the competitors are not that big, so psychologically it doesn't feel difficult, and it follows its own steps step by step. Many retail brands adopt the Japanese-style convenience store model, opening stores in core business districts, while Meiyijia avoids this competition through differentiated positioning, mainly serving communities. In addition, the headquarters will provide corresponding product lists and procurement channels according to the actual situation of each region, and allocate goods based on sales performance.
Image source: Meiyijia official website
The advantage of chain retail stores in management lies in uniformity, including procurement, inventory, sales, marketing, human resources, etc. While reducing costs and increasing efficiency, it can also ensure more stable operations. In the 1990s, Meiyijia developed its own system, connecting the headquarters and stores through a cash register. Franchisees simply operate the cash register interface, and sales settlement and automatic replenishment are completed automatically, greatly reducing operational difficulty. This year is Lao Liu's second year joining Meiyijia. From the epidemic to now, he has deep feelings. When asked why he chose to join, he said plainly, 'On the one hand, I came for the strength of the big brand; I searched online and found it was the largest. On the other hand, Meiyijia genuinely considers the store owners.' He gave several examples: Meiyijia's regional counselors launch various activities every week and month to help store owners increase membership, such as member days, buy 20 yuan get 5 yuan off, with the company providing rebates, and second bottles of drinks at half price. Regarding the pain points of small store retail, Meiyijia does well: goods are delivered on time within the agreed time, the server does not lag, and there are already more than 7,000 types of products. 'Overall, there is nothing that makes me dissatisfied. In summer, cola sells very quickly, but we never have out-of-stock situations; it is always delivered on time at 7 p.m.' When asked whether the epidemic affected the store last year, he frankly said that because Meiyijia is a guaranteed supply unit, the impact was not significant.
Image source: Meiyijia official website
7-ELEVEN's leader Toshifumi Suzuki once said: The reason we are called an industry pioneer is that we do not let any subtle change go unnoticed and respond appropriately, continuously 'creating convenience' as a life base for customers. Retail is a warm industry and also a harbor for consumers. A good convenience store is like a friend to everyone. 7-ELEVEN is like this, and Meiyijia, rooted in communities, is also like this. Fulfillment is a key link in retail and a key capability. When demand is small and simple, fulfillment is easy to complete. But when quantity increases and categories become rich, fulfillment capability becomes the touchstone for retail enterprises. Meiyijia comprehensively improves fulfillment capability through economies of scale, unified management, brand image, and membership systems, ensuring that goods reach consumers on time and as needed, and increasing consumer stickiness. If the first generation completed retail functions, the second generation solved large-scale fulfillment, and the third generation of chain retail has digital intelligence capabilities.
Chain retail is the future trend
In the future, as consumer needs continue to change, chain retail should also continuously innovate and develop. Technology-centric digital intelligence development, multi-point expansion, expansion into new business areas, brand internationalization, environmental protection, and low-carbon development. Chain retail stores will pay more attention to technology applications. For example, using facial recognition, smart shopping carts, unmanned supermarkets, and other technologies to improve shopping convenience and efficiency. Suzuki wrote in 'The Philosophy of Retail': Consumers no longer only pay attention to price levels; the era of 'cheap = best-selling' has passed. Similar to 7-ELEVEN, Meiyijia also consistently implements a dense location strategy to better reach community residents.
Image source: Meiyijia official website
Nowadays, the proportion of enterprises offering online business has increased year by year, from 29% in 2016 to 88% in 2021, with over 80% of convenience stores launching online business. The development of online business also coincides with a window of opportunity. During the epidemic, instant consumption demand surged. Meiyijia regarded instant retail as a strategic must-win point and established relevant teams to develop the business. As early as 2017, Meiyijia began building three core intelligent information platforms: supply chain data platform, store intelligent operation platform, and member precision marketing platform. In April 2022, Meiyijia's online monthly sales exceeded 200 million yuan, with a peak monthly order volume of over 3.9 million orders. With the upgrade of digital intelligence, chain retail has taken off with the wings of data, which is more practically significant in today's networked world. Currently, the emergence of multiple business formats, the combination of art and technology, has continuously improved the production, transportation, and sales efficiency of the chain retail model. According to different types, retail stores that meet different needs are formed, with precise distribution and picking. In the future, integrating AI-assisted systems and more vertical operational tools into the retail chain model will be a required course for enterprises, using CRM, ERP, and other systems to empower distributors. Accurately predicting sales, adjusting sales strategies in a timely manner, and polishing the enterprise's own supply chain to be more smooth, breaking down end-to-end barriers from the supply side to the consumer side—all of this is based on the chain retail model. In the future, there will be convenience stores with more obvious personalization, both small and beautiful, and large and comprehensive.
According to the changing social situation and residents' living needs, chain retail will change accordingly, providing products and services that fit, which is of course the future trend.