---
title: "The First Wave of Expiry-Date Discount Store Pioneers Have Already Gone Their Separate Ways"
description: "Today, stepping into any HotMaxx or Hi-Tech Go, the impression differs from the memory of \"expiry-date food discount stores\": \"expiry-date\" items are now rare, and \"food\" is no longer the sole主力 on the shelves. Apart from discounts, it is almost indistinguishable from an ordinary department store. Since the expiry-date food boom in 2020, the industry has evolved for three years, and change is inevitable. Or rather, such observation is hardly new. Three years may not be long, but as a track that precisely rode the wave of era dividends and consumer sentiment, it has been enough for players to complete a survival-of-the-fittest reshuffle, entering an era where the strong get stronger."
author: "王明雅"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2023-07-13"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/Kf0_RRuTXWaMWWax9_3zNA"
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---

# The First Wave of Expiry-Date Discount Store Pioneers Have Already Gone Their Separate Ways

> Today, stepping into any HotMaxx or Hi-Tech Go, the impression differs from the memory of "expiry-date food discount stores": "expiry-date" items are now rare, and "food" is no longer the sole主力 on the shelves. Apart from discounts, it is almost indistinguishable from an ordinary department store. Since the expiry-date food boom in 2020, the industry has evolved for three years, and change is inevitable. Or rather, such observation is hardly new. Three years may not be long, but as a track that precisely rode the wave of era dividends and consumer sentiment, it has been enough for players to complete a survival-of-the-fittest reshuffle, entering an era where the strong get stronger.

Now, stepping into any HotMaxx or Hi-Tech Go, unlike the fixed impression of "expiry-date food discount stores" in memory, here, "expiry-date" items are already rare, and "food" is not the only main force on the shelves. Apart from discounts, it is almost no different from an ordinary department store.

Counting from the outbreak of expiry-date food in 2020, the industry has evolved for three years, and change is inevitable. Or rather, such observation is hardly new. Three years may not be long, but as a track that precisely hit the era dividend and consumer sentiment, it is enough for players to complete a survival-of-the-fittest reshuffle and enter an era where the strong get stronger.

According to the law, the victors represent the course.

In offline stores, the top tier such as HotMaxx and Hi-Tech Go are expanding nationwide, while the second tier such as Elephant Life and Discount Niu are dividing up their respective regions. This battlefield has already shown signs of defeat—after a large number of individual businesses were swallowed up, last year, the once-popular Boom Boom Market also went bankrupt in a slump.

In terms of scale, HotMaxx is far ahead. Currently, the company has over 500 stores, and after opening franchising in April this year, it will expand even faster in first- and second-tier cities. Hi-Tech Go, often mentioned alongside it, has 200 stores.

"From the proportion of tail-end goods in our stores, Hi-Tech Go and we are no longer direct competitors." At the FBIF2023 Food & Beverage Innovation Forum, Zhang Ning, co-founder of HotMaxx, mentioned in an interview with media including New Retail Business Review.

The logic behind this is that **through the concept of "expiry-date food," discount stores have long completed initial market education and transformed into their own closed-loop business tracks.** Breaking it down, it includes the competition between soft and hard discount models, differences in business philosophy, and the polishing of site selection strategies—although ordinary consumers still find it hard to notice the differences.

In the end, the results can only be tested by time.

**Changes**

Let's start with specific phenomena.

Take the HotMaxx store at Beijing Longde Plaza, which New Retail Business Review often visits, as an example. With the overall upgrade of the shopping center's tenant mix, last year, it moved from the original open temporary location into a regular storefront. Obviously, in terms of influence and popularity, it has also become stronger.

Shortly before summer, the store added a freezer to sell ice cream. It is understood that some HotMaxx stores in Shanghai and other places have also introduced packaged frozen items like hot pot meatballs. At the entrance, Barbie dolls, car models, and other children's toys are piled into a small mountain, mixed with blind boxes and building blocks. On Children's Day, they even hung up promotional signs to attract business.

Food and daily chemical products now almost fill the entire store in a 5:5 ratio. After picking and choosing, you can even find a few good pairs of cotton socks. Pet food has also begun to become a "focus," occupying more and more shelves in a prominent position diagonally across from the cash register.

Such "deployment" would not be an unintentional act by a store manager.

On a shallow level, people's expectation of expiry-date stores is to buy snacks, drinks, and other necessities at lower prices, but from a corporate perspective, this logic is the "result," not the "process."

**"HotMaxx is not a purposeful, rigid-demand consumption channel; it is emotional."** Zhang Ning defined.

It can be understood this way:

A common scenario is that after watching a movie or having a meal in a shopping center, you stroll around and happen to walk into a HotMaxx. Facing ultra-low discount products, you can try new snacks or flavors without burden, or, thinking of the toothpaste or tissue that is almost used up at home, you pick up a replacement. In short, happiness, novelty, and satisfaction are all low-cost.

"HotMaxx's blind boxes and pet food sell very well, and blind boxes move very fast." Zhang Ning said. People not only pay attention to their own emotions but also to the needs of their pets.

To meet the requirement of "satisfying emotional consumption," more abundant categories are needed. A set of data is that a regular HotMaxx store has thousands of SKUs, but the company's warehouse behind it has a scale of over 100,000 SKUs. After analysis through the company's internally built digital capabilities, different single items are then distributed to each store.

The huge and complex SKU tests the company's operational capability. **For HotMaxx, it uses "category structure stability" to replace "SKU stability."** For example, HotMaxx has built over 20 major categories, with core subcategories under each major category. Following this system, brands do not need to be stable; only categories need to be constant.

Hi-Tech Go, often mentioned together with HotMaxx by the capital market and consumers, was established in 2021. Although its scale is not as large as HotMaxx, it also has nationwide expansion attributes, based in first- and second-tier cities, and enters shopping centers.

Its founder Zhang Qiang once mentioned in a media interview that as a discount store, **Hi-Tech Go provides users with entertainment value, not rigid demand.** But unlike HotMaxx's final form—approaching "a store that solves worries"—Hi-Tech Go hopes to gain fame through categories such as beauty products and big-brand samples.

Currently, more than half of Hi-Tech Go's products rely on imports. Big-name beauty products favored by female consumers are placed in the store's traffic-driving positions, which aligns with its consumer profile of "young women aged 18-35."

**This is the "divergence" of top players in first- and second-tier cities within the same track.**

**Course**

Three years ago, expiry-date food suddenly rose in China.

The reasons for the industry's explosion have been laid out to the public. First, affected by the pandemic, including the lengthened cycle of import and export trade, many manufacturers' products were unsold, inventory piled up, and expiry-date stores took over. Then, the new consumption wave surged fiercely—snail noodles, self-heating rice, sparkling water, etc.—with cruel competition. Products not chosen by consumers eventually flowed to expiry-date stores.

But what has never changed in expiry-date stores is that expiry-date is just one of the traffic gimmicks. Most stores are composed of less than 30% big-brand expiry-date items, some unknown small brands, and imported products.

Today, this originally "extensive" model has finally branched out, scattering to find the true course.

**HotMaxx satisfies "emotional consumption" needs, and its solid infrastructure is the continuously rolling 100,000 SKUs**—food, daily chemicals, toys, pet food, and even ice cream. It looks like a business without boundaries. The reason is that **on the one hand, a team of 100 buyers reports information; on the other hand, it seeks brands' "inventory surplus" and "capacity surplus."**

Inventory surplus is easy to understand—in layman's terms, it is the unsold tail-end goods of brands. How to understand capacity surplus?

Now, more and more co-branded products with brands appear in HotMaxx stores, such as Three Squirrels, Qiaqia Melon Seeds, and Xi Luo Hui Snail Noodles, with packaging directly printed with the HotMaxx logo. This is actually one concrete manifestation.

Zhang Ning gave an example: the cooperation between HotMaxx and Lay's potato chips is a digestion of "overcapacity." After the latter acquires potato raw materials upstream, the regular channel supply is complete, but there is still a small amount of remaining capacity, so it can do special customization with HotMaxx.

"In this way, the price the brand gives HotMaxx does not make money, but the brand's factory raw materials will not be left over, and HotMaxx only accounts for a small part of its sales channels, which will not affect the brand's overall market." He added.

To some extent, it can also be counted as part of HotMaxx building its own brand influence.

Correspondingly, **Hi-Tech Go has begun to significantly increase its own brands**, covering snacks and daily chemicals. A typical example is "Qiang Xiao Lu," created in imitation of the popular braised snack brand Wang Xiao Lu. Currently, Hi-Tech Go's own brands account for 20%-30%, with a gross margin of about 42%, which is quite impressive compared to introduced products.

HotMaxx has also incubated its own brand "Xia Qu," but Zhang Ning said that HotMaxx's focus will not be placed there. For a company committed to the principle of "no waste," it is unnecessary.

In the past three years, **the decline of commercial real estate has indirectly provided opportunities for HotMaxx and Hi-Tech Go.** For example, they can obviously enter shopping centers more conveniently and quickly, and even become the latter's preferred traffic-generating stores. Zhao Peng, co-founder of Hi-Tech Go, once said: "Brand discount stores were born at the right time; they help many shopping centers solve the problem of vacant stores."

Zhang Ning also frankly admitted that after discovering HotMaxx's traffic-generating ability, many shopping malls have even considered giving it first-floor locations.

For HotMaxx and others developing in first- and second-tier cities, this luck is important. After all, occupying major business district locations allows them to reach urban young white-collar workers more closely and provide "happiness value."

This actually brings out another course. **In the expiry-date track, distinguished by target audience, regional brands like Elephant Life prefer community locations.** So they have taken a different path.

Su Haihui, founder of Elephant Life, once compared the difference between himself and HotMaxx: "They are more like retail stores, while we are more like supermarkets. We have fresh milk, low-temperature baking, and frozen products." Of course, Elephant Life also has a minority of expiry-date products; more than 40% of its products are still tail-end goods, a feature that cannot be avoided in this track.

Public data shows that Elephant Life, rooted in Jiangsu, currently has more than 70 stores. Discount Niu in Zhengzhou is comparable and has already planned to expand out of the province. In addition, Aotle in Chengdu and others are also steadily expanding.

In summary, the industry pattern is roughly the coexistence of "super strong" and "strong."

**Review**

Okay, expiry-date stores—now, let's formally abandon this catchy name and call them "discount stores."

To be honest, this model is not new. Domestic entrepreneurs in this track are accustomed to benchmarking against the United States' Costco, Germany's ALDI, and Japan's Don Quijote when telling stories.

Costco and ALDI have both opened in China. The former is more importantly labeled as a warehouse supermarket, while the latter is called "the poor people's supermarket," essentially cheap goods rather than discounts. As for ALDI, after opening in Shanghai, it even stood on the same track as Hema.

Don Quijote is indeed more referential. This Japanese company, founded in the 1980s, currently has more than 600 stores globally. Initially, it did provide brand tail-end goods and near-expiry food, and later slowly incubated its own brand matrix.

Domestically, Haoshiqi, founded in 2016, is considered early, but unfortunately, as an e-commerce special sale, its influence and reputation have never been established.

**No matter how they benchmark, domestic entrepreneurs in the discount track must explore a path suitable for themselves and the market, while also ensuring they do not fall behind in the race.**

Last year, the once-popular expiry-date discount store Boom Boom Market collapsed in a hurry. From announcing franchising to bankruptcy liquidation, it took less than three months. At its peak, it had over 60 stores, and in the end, some stores were directly taken over by HotMaxx.

Boom Boom Market is not the only player that retreated. In Beijing alone, small chain discount stores such as Discount MAMA and Bengong Snack Innovation Research Institute disappeared silently, not to mention the individual small shops that were swept away.

**Within discount stores, there is a dispute between soft and hard discount models.** In general, the former targets the "fat meat" of tail-end goods, while the latter, after large-scale low-price centralized procurement, calculates gross margins and makes pricing lower than traditional supermarkets. The business logic is not wrong, but fierce competition has made tail-end goods no longer "fat" but a hot potato. In the end, only wealthy players can stay at the table.

As more influential Hi-Tech Go and HotMaxx successively open franchising, closer hand-to-hand competition will gradually emerge.

**Another trend worth noting is that Hi-Tech Go has recently begun promoting "membership cards."** Similar to the membership logic of warehouse supermarkets, membership cards offer cheaper member prices. Founder Zhang Qiang mentioned in an interview with media "Bright Company" that currently, 20% of its sales come from members, and member sales proportion generally maintains 20%-30%.

From a corporate perspective, this seemingly "beautiful" business logic is not shared by consumers. On Xiaohongshu, complaints about Hi-Tech Go "misleading recharge of 99 yuan for membership" are endless. The essence is, as a retail store originally focused on low prices, how can consumers psychologically accept "paying to get lower prices"?

The "Market-End Expiry-Date Food Business Status Report" released by the China Chain Store & Franchise Association mentioned that from 2016 to 2020, the market size of the expiry-date food industry had a compound annual growth rate of 7.8%. Based on this, by 2026, the market size will reach 47.1 billion yuan.

From the beginning of the internet's intervention in transforming various industries to the arrival of the new consumption wave, there is always a new trend every year. Speaking of which, how lucky are discount stores? They had era dividends when they rose, and now they hit the common "rational consumption" mentality of young people, still having expansion potential after three years.

That is, although the strong get stronger, fortunately, there is still ample space in the future.


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