---
title: "Mom-and-Pop Stores: I Am Not a Retail Outsider"
description: "In China, there are 6.8 million mom-and-pop stores that have quietly served consumers for decades. Now, as e-commerce giants like Alibaba and JD.com push into offline retail, these stores are being transformed or marginalized. Despite their small size, they account for 40% of retail channel shipments, yet many owners remain skeptical of the new retail buzzwords and the rapid expansion efforts."
author: "古廿"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-12-23"
language: "en"
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# Mom-and-Pop Stores: I Am Not a Retail Outsider

> In China, there are 6.8 million mom-and-pop stores that have quietly served consumers for decades. Now, as e-commerce giants like Alibaba and JD.com push into offline retail, these stores are being transformed or marginalized. Despite their small size, they account for 40% of retail channel shipments, yet many owners remain skeptical of the new retail buzzwords and the rapid expansion efforts.

You may not know that there are 6.8 million retail stores in China. They are old, unremarkable, and have provided convenience to consumers for decades. Now, they may be quietly disappearing, without notice.

From Alibaba's Retail Link to JD.com's New Route, from transforming 1 million stores in five years to 1,000 stores a day, mom-and-pop stores have become the focus of e-commerce platforms' offline expansion, yet they are marginalized like the last emperor of the Qing Dynasty.

In 2016, Jack Ma proposed New Retail; in 2017, unmanned convenience stores emerged; in 2018, capital flooded the convenience store market.

Facing the impact of market transformation, traditional supermarket giants like Carrefour and Walmart have begun to align with Alibaba or Tencent, actively embracing New Retail. There have been attempts, failures, and changes, but most mom-and-pop store owners seem to have been slower to perceive this change, only feeling that business hasn't been as good in recent years.

When some JD.com and Tmall promoters approach mom-and-pop stores on the street to ask about transformation intentions, they find that the owners don't seem to believe in the current retail buzzwords.

**Mom-and-Pop Stores: A Hard Bone to Chew**

A notebook filled with phone numbers is almost worn out. For daily necessities, whether instant noodles or sanitary pads, a quick flip reveals several different phone numbers for each product.

These small stores, often run by a couple without external employees, are commonly called "husband-and-wife stores."

Yet these unremarkable stores contribute nearly 40% of the entire retail channel's shipments. They are like the capillaries of the retail industry, spread across the country. Even in Beijing, you can find such stores near residential areas, providing convenience for nearby residents to buy daily necessities.

Given their significant market share, mom-and-pop stores have been a key focus for e-commerce giants expanding offline traffic from the start. Liu Qiangdong announced transforming 1,000 stores a day, while Ma Yun said they would reach 1 million by year-end.

However, amid this rapid franchise expansion, the giants have discovered that mom-and-pop store owners are not very interested in their new concepts like "transforming mom-and-pop stores and empowering New Retail."

Most owners are in a wait-and-see mode. Some try franchising, but the franchise period is usually only one year; if they don't see obvious profits within that year, they consider withdrawing.

On one hand, those who tested the waters feel it's not very useful and start to retreat. On the other hand, those in wait-and-see mode become more cautious about franchising after seeing the retreats.

These situations remind me of a conversation I had at the beginning of the transformation with a wholesaler who had long dealt with mom-and-pop store owners. When we talked about New Retail, he shared his views.

He said, "To pry open the mom-and-pop store cake, the current franchise transformation won't work. Don't judge by their storefronts; they have their own set of experience with the local community, better than machines. They have families to support, and without high certainty, they won't easily change."

Now it seems that the giants who find it hard to chew this "hard bone" are being defeated by mom-and-pop stores at the first step of franchising: supply chain transformation.

**The Owners' Shrewdness Exposes the Giants' Supply Chain Weakness**

The giants' first step in transforming mom-and-pop stores is to promote their platforms through subsidies, activities, and other purchasing incentives to attract owners. But this method of quickly capturing the market online with subsidies seems to fail with mom-and-pop stores.

During the promotional period, owners come to purchase. Once the promotion ends, they compare and find that it's not cheaper than their previous channels, so they take the subsidy benefits and return to their old ways.

In the supply chain transformation, on one hand, the giants want to attract owners to stay on the platform through subsidies. On the other hand, shrewd owners, once the promotional period ends, if they find that purchasing from the platform is not cheaper, will still pick up the phone and call their previous cheaper wholesaler channels.

This reminds me of a store owner I once heard say: "Our industry has low margins; we earn a few cents or a few yuan per item. The purchase price is the lifeline."

Clearly, in the minds of mom-and-pop store owners, supply chain issues are the foundation of their profitability. If the giants' supply chains cannot provide long-term benefits, they will naturally choose whoever is cheaper.

**Useless "High-Tech" vs. Pragmatic Unconventional Methods**

Besides the supply chain, the giants also bring out their trump card: data analysis systems, which are said to help mom-and-pop stores operate better.

But when owners face this intangible high-tech, after using it for a while, if it doesn't bring profits, they feel it's not very useful and not as powerful as imagined.

In my view, not all technology with new buzzwords is high-tech. If it doesn't actually help owners reduce costs, it's less practical than their own unconventional methods.

The promotion of high-tech should be driven by consumer demand. For example, Ma Yun proposed cashless payment a few years ago, and it was hardly promoted; even the pancake seller on the street knows to put up a payment QR code.

Why? Because consumers no longer carry cash. If you don't change your payment method, consumers might not buy from you.

So, whether it's high-tech or not, if the technology is needed by consumers or brings tangible benefits to mom-and-pop store owners, they will have the motivation to transform.

The giants clamor about transforming mom-and-pop stores and empowering New Retail, yet they also shout the slogan of 1 million stores a year. At such speed, some transformations clearly haven't achieved the empowerment effect. The giants want rapid replication, while the owners want to support their families. From the start, their directions diverge, and in the end, they can only complain about each other.

**Giants/Owners Relativity**

After reviewing the above, let's analyze the two main parties involved in the transformation process.

> **1. What responsibility should the initiators of New Retail transformation, like Alibaba and JD.com, bear?**

As the advantaged party, the giants should spend more time deeply optimizing the supply chain rather than thinking about using internet subsidies to quickly acquire users. Only by more deeply transforming the product structure of mom-and-pop stores and addressing the pain points of owners during the process can they truly help owners improve their business operations and achieve profitability. The transformation approach that blindly pursues speed and rapidly expands store numbers may ultimately end in a mess.

> **2. What attitude should ordinary retail store owners maintain in the face of transformation?**

As the disadvantaged party, mom-and-pop store owners should think more, learn about the changes in the overall situation, and keep up with the industry changes in the internet environment. They should embrace new things with an open and adventurous mindset, consider the feasibility of technologies and business methods for themselves, so they can survive long-term amid constant change.

In summary, if the giants want to transform mom-and-pop stores, they should consider issues more from the owners' perspective, get close to this group, and listen to their voices.

> We may be slower, but we are also willing to change;
>
> We may be stingy, but that's the profit source for a small business to survive;
>
> We may be behind, but that's the way for mom-and-pop stores to adapt to the market;
>
> We may be tougher, harder to chew, and have more concerns.

But all this is because for us: one mom-and-pop store, one family's livelihood.

Source: Everyone is a Product Manager
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