Will discount snack stores be a flash in the pan? Let's state our view first: At least within the next decade, discount snack stores will not disappear. As the main purchasing channel for snacks in the future, community retail stores will continue their development trend and gradually become an indispensable part of people's lives. The industry's ongoing discussion about whether discount snack stores will be a flash in the pan is influenced by keywords such as 'cutting leeks', high closure rates, and low margins. In fact, many people, before making such derogatory remarks, do not deeply consider the root of the problem, but rather make reckless comments or distort facts. Admittedly, in this market, some companies are irresponsible, unprofessional, and overly focused on quick profits, leading to the phenomenon of 'cutting leeks'. This phenomenon cannot be eradicated; it exists in all industries. Whether you are 'cut' depends on your personal insight and judgment. If you do not choose a brand with national influence, you may indeed face more risks and challenges. Regarding the closure rate, physical stores in all industries have a closure rate of about 5%. This may be related to factors such as the competitive environment, financial strength, and operational capability. Even large enterprises like McDonald's and Walmart experience store closures. If you happen to see a snack store close and then exaggerate the high closure rate of snack stores, that is too one-sided. The discount snack market has existed for many years and has a certain foundation. Now, only the scene has changed, such as improvements in lighting, music, display props, pricing, and product selection. Discount snack stores are not a 'cutting leeks' model; they have the characteristics of a 10,000-store chain. In Hunan, the density of large pharmacies is not less than that of convenience stores. Large pharmacies are a 10,000-store model, and this phenomenon can be extended to thinking about the snack market. An investor friend once summarized: 'Those who eat sitting are not as good as those who eat standing; those who eat standing are not as good as those who eat walking.' I added, 'Those who eat walking are not as good as those who eat lying down.' Now many young consumers eat snacks while lying down at home. There are definitely more people eating snacks than taking medicine, which shows the huge development potential of the snack market. Although the potential is huge, we cannot be blindly optimistic. To achieve a 10,000-store chain in the future, relying solely on the first-tier city market will not succeed. Going down to lower-tier markets is the only way, and it is a common feature of 10,000-store chains. For example, large pharmacies, Mixue Ice City, and Meiyijia all succeeded in breaking 10,000 stores by going down to the capillary level. Continuous optimization of the supply chain Do distributors still have value? With the continuous optimization of the supply chain, distributors are becoming increasingly anxious, and some groups have even begun to question whether distributors still have value. This topic is not unfamiliar to everyone. When B2B first emerged ten years ago, some also questioned the value of distributors. Over time, distributors still hold a place in the industry. As the founder of a discount snack store, I believe distributors are valuable. The first value lies in sub-warehousing. We can imagine: in the future, when the scale of snack stores reaches 10 billion, how large will the logistics center need to be? Whether it is purchasing real estate, building factories, or cooperating with third parties like JD and Cainiao, a large logistics center is needed to support it. Distributors' warehouses can play a very important supporting role. Through sub-warehousing and warehouse management, they provide space and resources for brands, making it possible to expand scale. This is very meaningful. In addition, distributors can also help brands with new product promotion and distribution. When new products are launched, distributors, as the role directly reaching terminal channels, have wide coverage and can help platforms quickly distribute. At the same time, for some small merchants, if they directly purchase goods from factories, they may face higher procurement costs and distribution difficulties. Distributors can help platforms save procurement links and distribution pressure, and reduce logistics costs through economies of scale. In general, although the role of distributors may change with technological development, their role for platforms, consumers, and the entire market remains very important and indispensable. How Ailingshi broke through the siege and became a dark horse in the industry? After discussing the industry, let's talk about Ailingshi's development. How did Ailingshi become a dark horse in the industry? As a supplier, there are generally two dreams: one is to create an independent brand, and the other is to open stores. As veterans in the FMCG field, we also hoped to have our own stores, so Ailingshi came into being. Looking back at my career experience, from convenience stores to community group buying, and then to discount snacks, each job has a certain correlation, laying a solid foundation for Ailingshi's development. Now Ailingshi is mainly deployed in Hunan, Hubei, Guizhou, Sichuan, Shaanxi, Chongqing, Gansu, and other places. Many people are curious why we didn't choose Guangzhou. Regarding the layout strategy, there are mainly 4 reasons: First, our B2B business in Guangzhou lost 10 million yuan, and we did not achieve profitability in Baiyun District for 5 consecutive years. The lesson from the past made us carefully consider setting up in Guangzhou; Second, many snack brands have chosen Guangdong, making competition fierce. While the four major brands were fighting in Guangdong, we had already stayed away from the center of the war; Third, Guangdong has a strong local convenience store brand - Meiyijia, with more than 30,000 stores nationwide, and 10,000 in Guangdong. The development of discount snack stores has a great impact on Meiyijia. If it continues to develop, Meiyijia's senior management will likely take defensive measures. If 10% of Meiyijia's 10,000 stores in Guangdong are transformed into discount snack stores, that would be 1,000 stores, which is not to be underestimated; Fourth, the Guangdong market is huge, and almost all national chain brands want to enter Guangdong, making competition fierce. Among them, the most prosperous Guangzhou and Shenzhen have very high rents, which are not suitable for the development of discount snack stores. This is Ailingshi's overall strategic plan. Practice has proven that choosing to enter Hunan, Hubei, Sichuan, and other places instead of Guangdong was a wise choice. This is also the key move for Ailingshi to break through the siege. [This is the sharing content of Mr. Tang Guangliang at the 5th China FMCG Conference, organized and compiled by New Distribution for readers (some parts have been deleted or modified)].