A while ago, I was on a business trip. When I got home, I passed by the convenience store at the entrance of my residential community and noticed it was bustling with people. Curious, I went in and saw the shelves half empty. I grabbed a bottle of water and went to pay, joking with the老板娘 (female boss), "Business is good today, huh?" She smiled and said, "We're planning to close down; we're clearing out stock." Her casual remark left me feeling a bit heavy-hearted.
Invisible Competitors Are Eroding Small Shop Business
Sister Zheng's shop had been open for over a decade. She once confidently told me that she could remember anyone who came into the store, even if they just bought a pack of salt. Now, looking at the empty shelves, she sighed, "In the past, daily revenue could reach two to three thousand yuan. Now, even including cigarettes and alcohol, it's only seven hundred, and the rent has gone up. There's really no way!" She doesn't know when things started to change; by the time she realized, the store was already empty. Sister Zheng told me that two other shops had opened on this street before, but after two years, their business was worse than hers, and they gradually closed. Back then, she knew who her competitors were, knew their situation, and knew how to respond. But now it's different. "Actually, business started declining last year," Sister Zheng admitted. "But I thought since the competitors had left, business would pick up. After so many years, it's a pity to close, so I decided to try again." So she stocked up on roasted seeds and peanuts, added some bulk items, and in the past two months moved the freezer to the door, hoping to sell more drinks in the hot weather. But it didn't help. Across the street is a Cainiao station (parcel pickup point). People come and go to pick up packages, passing by her store but rarely stopping. "Nowadays, young people like to buy things online. I sometimes order from Pinduoduo too; it's really cheap!" Sister Zheng showed me her online orders on her phone. Facing this "competitor," she admits defeat willingly. But there's one thing she can't understand. Pointing at the "convenience stores" and "supermarkets" within 1 km on a food delivery app, she said, "Look, there are many stores nearby, but I really don't know where they are. I've never seen them. They sell a bottle of water for 1 cent. Won't they lose money?" She doesn't know what instant retail or flash warehouses are. She only knows that her business is being taken away bit by bit by these "invisible competitors."
Tried to Save Themselves, but Can Only Take It One Step at a Time
After visiting several stores, I found that many owners, like Sister Zheng, are "confused." There's another type of owner who is clearly trying to save themselves but finds it increasingly difficult. Brother Li's shop is in a residential compound. After the pandemic, he noticed a significant drop in foot traffic and started to think of solutions. First, he became a community group-buying leader as a side gig. Later, he spent several thousand yuan to have his store listed online, thinking that keeping up with the times would retain some business. But neither path worked. First, regarding community group buying, Brother Li initially thought it would be a good way to attract customers, like parcel collection. People come to pick up their orders, and they might buy a pack of cigarettes or a bottle of water. More foot traffic would lead to more sales. But what came first was not improved business but a sense of imbalance. "I thought they'd just buy groceries, but later I found they buy rice, flour, oil, and even instant noodles online. Even though the store has the same items, they'd rather wait a day than walk a few steps!" Brother Li got angrier as he spoke. He calculated that a bottle of drink has a profit margin of about 30%, but the platform commission is only 5%, and he has to set aside space for storage and sorting, and handle after-sales if there are quality issues. It's not cost-effective, but he has no choice. "Fewer people come in now. In this market, if I don't do this, I won't even earn that commission!" Besides group buying, Brother Li also tried going online. He told me that early this year, someone approached him offering to list his store online. He paid a few thousand yuan, and they did set it up. But he gave up after a few days. "During meal times or after work, the machine kept ringing. Sometimes when customers came in, I was the only one in the store and couldn't handle it all! It wasn't just the chaos; I didn't make much money, and even regular customers felt my service had declined. I couldn't manage both, so I just turned it off." As sales declined, even the usually easygoing Brother Li became "fussy." Sales reps came frequently, but he refused to stock up, and even when he did, he compared prices. "A certain brand of purified water is 12 yuan per pack, but at the wholesale market I can get it for 10.9. Sometimes online promotions offer it for 9.9. So why should I buy from you?" Brother Li told me that the market is flooded with goods, and prices are transparent, changing daily. Hoarding stock is like slow suicide. But no matter how he tries to cut costs or adjust, he can't change the current decline in foot traffic and profits. When asked about future plans, Brother Li could only shake his head helplessly, saying he'll take it one step at a time.
After Thirty Years, the Shelves Are Empty
Owners like Sister Zheng and Brother Li, who are consciously trying to save themselves, feel powerless. In the corners of the city, there are also old shops that can't even afford to try. Grandpa Zhang's small grocery store has been open for over thirty years. When I walked in, he was sitting behind the counter watching TV. On the counter were a few packs of dried noodles, some instant noodles, and low-end candies; a cardboard box held a few bags of bread with "5 yuan" written in black marker; the condiments on the wall shelf were covered in dust. In the corner were some paper ingots folded for extra income. This used to be the center for daily necessities for the neighborhood. Distributors delivered goods weekly, and Grandpa Zhang never had to worry about stocking. But later, deliveries became less frequent, and eventually stopped altogether. "If they can't sell, they don't want to come." Now, Grandpa Zhang periodically rides his tricycle to a wholesale market a few kilometers away to restock what he needs. Sometimes, well-meaning owners recommend beautifully packaged products, but he doesn't dare take them. "I don't understand what young people like. I tried some before, but they didn't sell well. There's no after-sales at the wholesale market, and unsold stock is just money tied up." Now, only old neighbors come, buying a pack of noodles or a bottle of soy sauce. Fortunately, he owns the property, so there's no rent.
What's Being Eliminated Is Not the Mom-and-Pop Store, but the Old Business Logic
The problems faced by Sister Zheng, Brother Li, and Grandpa Zhang appear to be about increasing competition, but in reality, the old business logic has collapsed. In the past, these small shops survived on three key factors:
- Information asymmetry: Consumers didn't know the cost price or where to buy cheaper. Now, prices are completely transparent, and online comparison is easy.
- Proximity to consumers: They were close enough that you could go downstairs to buy what you needed. But today, instant retail has redefined "close"—delivery to your door in 30 minutes.
- Product access: In the past, consumers could only rely on the corner store or supermarket. Now, with food delivery platforms, online shopping, community group buying, discount stores, and other formats, the barrier to obtaining goods has been lowered infinitely, making the homogeneous or even outdated products on their shelves uncompetitive.
As these three advantages fade, the foundation of traditional small shops begins to crumble. But to say this business model has no future would be biased. The community consumption scenario still exists, and the consumer base is large enough. Consumers still need to buy rice, flour, oil, snacks, and drinks. Walmart, Hema, Meituan, JD.com, and others are all vying for community business—this proves the pie is still there, just sliced differently. What's being eliminated is not the mom-and-pop store, but the old way of doing business.