---
title: "Nongfu Spring's Sesame Store: A Billion-Yuan Dream?"
description: "Nongfu Spring's 'Sesame Store' is a new name for an existing project, expanding its vending machine business into residential underground parking lots. The company has invested heavily, planning to lose 200 million yuan annually for five years, aiming to directly connect with consumers and build a comprehensive household service platform."
author: "袁来"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-07-01"
language: "en"
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# Nongfu Spring's Sesame Store: A Billion-Yuan Dream?

> Nongfu Spring's 'Sesame Store' is a new name for an existing project, expanding its vending machine business into residential underground parking lots. The company has invested heavily, planning to lose 200 million yuan annually for five years, aiming to directly connect with consumers and build a comprehensive household service platform.

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"Nongfu Spring Sesame Store" is a new name, but the project is not new.
In 2018, Nongfu Spring deployed vending machines in a new retail scenario—residential underground parking lots. According to relevant media reports, by June 2018, Nongfu Spring had quietly occupied underground parking lots in multiple communities in Beijing, Tianjin, Wuhan, and other cities.
In 2019, Nongfu Spring named the "underground parking lot vending machine" project "Sesame Store." From the name change, from "machine" to "store," it indicates that in Nongfu Spring's plan, "Sesame Store" will no longer be just a simple vending machine.
In fact, since 2015, FMCG giants including Nongfu Spring, Wahaha, and Uni-President have been investing heavily in vending machines, continuously increasing their spending.
**Because, for any brand, directly connecting with consumers and achieving F2C has always been their unchanging "dream."**
Nongfu Spring has singled out the "community underground parking lot" scenario and tailored a "Sesame Store" model for it. What is their strategy behind this?
**For the Sesame Store,**
**Nongfu Spring has placed a "bet" of one billion yuan over five years**
According to Li Hua (pseudonym), a regional distributor of Nongfu Spring, the Sesame Store has been fully promoted for a year, and has entered 33 first- and second-tier cities.
Taking provincial capital cities as examples, the Nanjing market and Zhengzhou market have invested 900 and over 1,200 Sesame Stores respectively. As of now, Nongfu Spring has deployed over 30,000 Sesame Stores nationwide.
In terms of development speed and requirements, Li Hua revealed to New Distribution that in 2018, Nongfu Spring's Sesame Store mainly pursued speed, requiring regional cities to develop more than 150 units per month to cover underground parking lots in mid-to-high-end communities. Now, Nongfu Spring pays more attention to the quality of Sesame Stores, with quality assessments mainly including the community's occupancy rate and housing price levels.
An industry insider told New Distribution, **the Sesame Store is a strategy; Nongfu Spring is prepared to lose 200 million yuan annually for five consecutive years.**
Why does Nongfu Spring value the Sesame Store so much, willing to place a one-billion-yuan "bet" on an underground parking lot scenario? If you think from Nongfu Spring's perspective, it is not difficult to understand.
**First, brand owners are always pursuing control, and the better the brand, the more so. Whether it is online e-commerce or offline channel terminals, they help brand owners complete sales while also separating brand owners from consumers.**
If they cannot directly connect with consumers and directly obtain user and transaction data, brand owners will not feel secure. Whether it is vending machines or Sesame Stores, they allow Nongfu Spring to directly connect with consumers. Therefore, this is the core driving force for FMCG giants, including Nongfu Spring, to continue investing heavily in building "vending machine" systems.
Moreover, compared with Japan, a "big country" for vending machines, our vending machine network still has dozens of times more room for growth.
**Second, Nongfu Spring judges that residential underground parking lots are a very important "new retail scenario."**
The various and ever-changing business models and innovations revolve around one core: how to establish a new retail consumption scenario that is closer to consumers, provides a better experience, and is entirely new.
Look at traditional B2C e-commerce, O2O models, food delivery platforms, various home services, and the community group buying that has been popular in the past two years—their core is the same.
Therefore, in Nongfu Spring's strategic thinking: **the Sesame Store is a fully controllable small store, within a hundred meters of consumer homes, and directly associated with cars. This new scenario has enormous imagination space.**
If you were Nongfu Spring, facing the billion-yuan "bet" of the Sesame Store, would you place your bet?
**Is the Sesame Store an upgraded vending machine?**
What does Nongfu Spring's Sesame Store look like? Is it essentially an upgraded version of a vending machine? What are the differences between it and a vending machine?
First, the deployment logic is completely different.
The logic for vending machine deployment is foot traffic logic. High natural foot traffic, high point value, good deployment benefits—only then is it worth deploying. Deploying vending machines is to meet consumers' immediate and convenient consumption needs.
In this regard, the Sesame Store's logic is completely different from vending machines.
Because residential underground parking lots are not places with concentrated foot traffic, nor are they conventional purchasing places. Therefore, the logic for deploying Sesame Stores is not to meet immediate and convenient shopping needs.
**The Sesame Store focuses on planned household consumption; its logic is that of a pickup point.**
In the early stage, the Sesame Store can meet some convenience consumption through product display. But this is not the key; the key is that through the Sesame Store display, it can acquire surrounding users. Moreover, unlike the mobile users in other scenarios, the users of the Sesame Store are basically fixed.
**Second, the Sesame Store has a user system, while vending machines do not.**
Through the membership recharge function, the Sesame Store begins to establish Nongfu Spring's own user system. In FMCG, this move is almost unique.
Drinking water is a rigid consumption with extremely high purchase frequency, so consumers have less resistance to recharging as members. Li Hua said that for every Sesame Store deployed by distributors and sales representatives, Nongfu Spring requires ground promotion and must connect with more than 100 households.
Assuming the rumored 50,000 Sesame Stores, Nongfu Spring has reached 5 million consumers through the Sesame Store system, behind which are at least 1 million household users.
**Third, the products sold in Sesame Stores are quite different from those in vending machines.**
In market research, the author found that the products sold in Sesame Stores are very different from traditional vending machines. In Sesame Stores, products have extended to include Healthyao's own Northeast rice, Gannan navel oranges, birch tree juice masks, and more.
Industry insiders say that in the future, Sesame Stores will also carry rice, flour, cooking oil, and other products. Nongfu Spring will build a "full industry chain" layout around consumer household needs. It looks like a big chess game.
Upstream, Nongfu Spring will play the role of "household life service provider," providing consumers with quality daily necessities; downstream, it will deeply bind members. Taking a step further, when Nongfu Spring achieves deep consumer connections, the online mall will complete product expansion and enrichment. For the Sesame Store, its phased task will be completed, and it will no longer be a store but just a pickup point.
The "dream" of the Sesame Store is not small; the business logic seems self-evident. But among the various models and business ideas that have collapsed, which one did not sound reasonable but failed upon landing? Which one was not born great but died in frustration?
With tens of thousands of Sesame Stores already opened, as a "new retail scenario," we still need to answer the following questions:
1. Whether it is parking lot shopping or pickup, the competitor in this scenario is the convenience store downstairs. Compared with it, what exactly is the advantage?
2. What are the equipment costs, construction costs, rental fees, operation and maintenance costs, and restocking costs of a Sesame Store? What is its daily average consumption break-even point?
3. The Sesame Store is positioned for comprehensive household consumption, so Nongfu Spring must build a B2C mall, and the categories need to be continuously enriched to meet different household needs. How likely is it for a brand owner to succeed in retail?
**Commentary by Wang Jun, New Retail Expert**
**Finally, it is no longer called a vending machine, but a store.**
The second half of unmanned retail has lost capital support, and everything returns to the original intention. Brand owners build their own points to directly form their own channels, establish private traffic pools, and thus reach the C-end directly. No matter how you look at it, this is a big strategy.
So where are the key points?
**1. Location**
Nongfu chose underground parking lots in high-end communities. Very precise. It targets in-car hydration, high-frequency scenario interaction, and mid-frequency whole-case hydration placed in the trunk. It directly excludes competition. This is indeed a smart choice. At the same time, the infrastructure such as monitoring in garage stores is much better than the open-air environment on the ground.
**2. Service extension space—car family**
The first extension is car consumables. Cars are the second residence of modern people, and many products are consumed and replaced frequently. As a "store" in the basement, the categories can be extended because it is the closest. Various virtual related products can also be displayed and interacted with through the device's large screen.
**3. Service extension space—on the way home**
After getting out of the car, on the way to the stairs or elevator, is it feasible to shop or pick up items at the self-service machine? I think it is feasible. It is close and on the way, which improves shopping efficiency. On this path, pushing daily necessities and food is also feasible.
**4. Imagination and competitive barriers**
For vending machines entering communities, the first difficulty is negotiating entry, and the second is cost-benefit. Nongfu Spring water is originally a traffic-driving product. On this basis, forming consumer mind-share and expanding product categories is the key. In terms of imagination, it can be fully developed into a pickup point. Connect the system to serve e-commerce group buying platforms.
Competitive barriers do exist, but they are not in the initial investment, but in long-term operation and maintenance capabilities. How to select products, how to do after-sales, how to persist in density, etc.
Is this a good business? Hard to say.
But it is definitely a large scenario that can be staked out. In the end, it depends on how much determination and perseverance Nongfu has. Initial trial-and-error costs are unavoidable, and the entire industry is immature in this regard.
Focusing on new distribution for FMCG distributors / new marketing cases for brand owners
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