---
title: "Ten Judgments on the Explosively Popular Bulk Snack Stores"
description: "The track will inevitably differentiate, but opportunities always exist. This article offers ten judgments on the development of bulk snack stores, covering their impact on traditional retail, the challenges for distributors and B2B platforms, the fate of small enterprises, and the keys to success in this competitive landscape."
author: "赵波 王识钦"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2023-07-07"
language: "en"
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# Ten Judgments on the Explosively Popular Bulk Snack Stores

> The track will inevitably differentiate, but opportunities always exist. This article offers ten judgments on the development of bulk snack stores, covering their impact on traditional retail, the challenges for distributors and B2B platforms, the fate of small enterprises, and the keys to success in this competitive landscape.

**Introduction: The track will inevitably differentiate, but opportunities always exist.**
**Author** 丨Zhao Bo, Wang Shiqin
**Review** 丨Wang Qiang **Layout** 丨He Wen
"The harder people's days, the better our business." This is what the mother of the Albrecht brothers, founders of discount store ALDI, told them. Research shows that the more economic downturns, the better the opportunity for discount stores to develop. Within the discount store category, bulk snack stores have become a unique track. Besides low prices, rich product specifications and high-quality consumer experiences have become competitive advantages over traditional convenience stores. Today, the author makes ten judgments on industry changes regarding the development of bulk snacks.

**Significant Impact on Mom-and-Pop Stores and Local Chain Convenience Stores**
Although China's convenience store industry has seen explosive growth in the past two years, the wheel of the times never stops. Bulk snack stores have already shown multiple impacts on traditional franchise convenience stores and mom-and-pop stores, mainly in two areas: discounts and gross margins.

From the convenience store perspective, leisure food and beverages account for a large proportion of sales and are also the main contributors to gross profit. Beverages are a true money-maker. In contrast, bulk snack stores derive their gross profit mainly from leisure food, so they often use high-frequency products like beverages as loss leaders at low prices, influencing consumer shopping choices.

For the same brand and packaging, bulk snack stores have a price advantage; for the same brand but different packaging, bulk snack stores still have the advantage. This is because they are essentially a type of hard discount store, meeting the conditions of hard discount stores: strict date management and quality control. Bulk snack stores simply aggregate categories, not just snacks and beverages; they will inevitably continue to expand categories in the future.

This means that the gross margin space of convenience stores and mom-and-pop stores will be significantly compressed by discount stores.

**Distributors Directly Under Pressure**
Objectively speaking, distributors, especially leisure food distributors, will be greatly affected because bulk snack stores focus on extreme cost-performance. Extreme cost-performance implies a transformation of the entire distribution model. In traditional retail, snacks go through multiple links from factory to regional agents, distributors, and retailers, with each channel taking a share, ultimately determining the retail price. By bypassing intermediate links and directly connecting with brand manufacturers or upstream agents, the middle links are cut, and this is where consumer value lies. Unlike traditional supermarkets and KA channels, the factory-direct supply model of snack collection stores basically bypasses traditional distributors.

**The biggest feature of bulk snacks is model innovation. By compressing intermediate links and using digital supply chains, they reduce middlemen and handling costs.** Secondly, after large-scale store openings, bulk snack stores will inevitably squeeze the number of stores supplied by leisure snack distributors, further limiting their survival space.

**B2B Also Affected**
Not only distributors are impacted by bulk snack stores; B2B is also affected. Currently, B2B platforms in China that can profit are basically those that operate leisure snacks and break-bulk well. The large number of bulk snack store openings squeezes the survival space of mom-and-pop stores while also affecting the leisure food category, indirectly impacting B2B platforms.

Bulk snacks start from retail and start with high-margin categories—note, high-margin—so from building supply chain capabilities, they automatically benchmark against B2B. A closed supply chain is simpler to manage, and simpler management saves costs.

**Small Enterprises Reduced to OEM Factories**
An indisputable fact is that small leisure food enterprises may not be eliminated, but they will gradually become OEM factories. Without persuasive branding and visibility, they are easily marginalized in the future. If consumers' wallets are not full, they will be cautious when choosing branded products. Caution means risk avoidance. Therefore, well-known brands, whether self-developed or introduced, benefit from low-cost compounding growth through accumulated reputation. It should be noted that white-label ≠ small brand, and correspondingly, small leisure food enterprises may choose to OEM for white-label brands as a daily practice. White-label products entering the snack chain system through wholesale markets inherently means a stable market, which has much greater market depth than the small enterprise's own products. Given the current situation, bulk snack chains account for 15-30% or more of many brands' shipments, so small factories doing OEM is nothing to be ashamed of; they can even make money.

**Most Are Just Also-Rans**
Unfortunately, I have to cool everyone down. Although the track is surging wave after wave and extremely hot, most snack stores are just also-rans. Through financing and land grabbing, only about three will remain, possibly similar to the Three Kingdoms model. As for whether it will eventually become "Three Kingdoms Return to Jin," there are no obvious signs yet, but internal changes are not ruled out. First, bulk snack stores with big money are rapidly expanding, inevitably leading to relatively vicious competition, and price wars are unavoidable. After all, leveraging financing advantages to quickly scale up store numbers is one of the main strategies. Second, most snack stores cannot get financing because they lack store numbers; investors, no matter how optimistic, dare not invest in a brand with few stores. Due to data limitations, profit models cannot be predicted, risks are high, and supply chains cannot achieve economies of scale. The industry will soon enter a reshuffle; apart from lower-tier markets, prime locations in business districts are basically saturated, so the next phase is a battle for existing market share.

**Pepper-Sprinkling Store Openings Are Not Advisable**
In this competition, many entrepreneurs, in order to secure GMV financing, often blindly expand and open stores nationwide. Strategically, without absolutely strong provinces, brands that open stores like sprinkling pepper will generally die miserably. They may seem numerous, but they are many yet weak, and both management radius and difficulty, as well as supply chain fulfillment and delivery, become extremely difficult and troublesome.

It should be noted that community snack stores are essentially community businesses. Without forming a certain density in a region, true brand effect cannot be achieved. Refer to the store-opening logic of Juewei Duck Neck: at least two stores on one street, otherwise the radiation range and capability are limited.

You must have a base, a province or a region, and then expand nationwide. No brand can succeed by going national from the start.

Just like Meiyijia, which deeply cultivated Dongguan before expanding to Guangdong and then radiating to South China, step by step, the probability of success is higher.

Here I have a bold judgment: before the first half of 2024, 800 stores is the lifeline. Calculate the time; there is really not much left, about 12 months, before entering the elimination round.

**Veteran Entrepreneurs from Hunan and Sichuan-Chongqing Have Higher Odds**
To succeed in this track, veteran entrepreneurs have a broader winning surface. From a regional perspective, Hunan and Sichuan-Chongqing have a higher probability of success.

Veterans like Tang Guangliang of Xingaoqiao, after years of supply chain and retail industry experience, have the ability to expand rapidly. Fan of Jiayunshi is not a novice either; he first did pharmaceutical supply chain, then worked at Meiyitian for many years before starting Jiayun, following the same logic.

Having industry experience is crucial for entrepreneurship.

The radiation of Xingaoqiao Market to the entire South China region has made Hunan a solid base for leisure snacks. Supply sources determine cost and profit, while logistics convenience and system completeness determine efficiency during transportation.

Sichuan-Chongqing's spicy snacks have certain advantages. Sichuan-style spicy is a concept that has educated the market for years, so when snack collection stores enter spicy snacks, resistance is minimal.

**Ultimately Competing on Products and Operations**
Although bulk snack stores look different from snack stores and mom-and-pop stores, they are essentially retail, and the logic hasn't changed. Early on, it's about competing on financing and team, but later, product and operational capabilities remain core competitiveness.

The core is still supply chain management plus operations management, competing on internal strength. When products are all discounted for consumers, why would they choose a certain brand? For example, the little girl IP of Love Snacks has been iterated based on user profiles since its design, which is a projection of operational capability.

It can be said that supply chain determines depth, and operations determine breadth. Simply put, it solves the core problem of whether it can be done and how to do it. Product renewal and iteration, R&D and innovation capabilities must be present, which is equally important in bulk snack stores and hard discount stores. Like a master's move, having a follow-up move is crucial later on.

**Bulk Snacks Accelerate the Decline of Traditional Hypermarkets**
Bulk snack stores certainly accelerate the decline of traditional hypermarkets, and there's no way around it. First, product overlap is too high, with severe homogenization. For the same products, bulk snack stores are better and cheaper than traditional hypermarkets, so users have no reason to sacrifice their time and money for hypermarkets.

Closer and more convenient, this also removes the reason for consumers to go to traditional hypermarkets. Human laziness naturally tends toward simple things; shopping should be as simple as possible. That's why Toshifumi Suzuki tried every means to make 7-11 a partner for Japanese community residents.

Overall, the trinity model of bulk snacks + flash warehouses + community fresh food not only kills mom-and-pop stores but also affects hypermarkets.

Because hypermarkets' logic can't keep up; they are too cumbersome, with excessive space. Even Carrefour has considered renting out extra space to reduce costs.

**The Track Has a Long Slope and Thick Snow**
Overall, bulk snack stores have a long slope and thick snow, making it a sufficiently large track. Currently, the top of the track is about 10,000 stores, with many sub-top and mid-tier players. Even if the industry reshuffles in the future, demand will not decrease; it will only transform. We estimate that 100,000 stores within three years is no problem; this is a track with imagination. Taking the 2019 per capita snack consumption of China and the US, the US is still four times ours, so the space is enormous. Mature brands in Japan, South Korea, and Singapore, like "Super Cheap Hall" Don Quijote, have been profitable for 27 consecutive years, basically serving as a bellwether for the industry. Therefore, we believe the track will inevitably differentiate; high- and low-tier markets, and eastern and western markets, will differ, but opportunities always exist.

**Further Reading**


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