---
title: "The Pain of Traditional Terminal Stores: Struggling to Survive, Yet Unable to Thrive"
description: "Terminal stores, a unique group in the FMCG industry, are often family-run mom-and-pop shops, especially in county and township markets. They bear the brunt of terminal sales but are frequently overlooked, facing challenges from channel compression and shifting consumer demands. This article explores their plight and the empowerment initiatives by Tongfu Group, including a live-stream ordering event aimed at revitalizing these stores."
author: "田静"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2024-08-05"
language: "en"
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# The Pain of Traditional Terminal Stores: Struggling to Survive, Yet Unable to Thrive

> Terminal stores, a unique group in the FMCG industry, are often family-run mom-and-pop shops, especially in county and township markets. They bear the brunt of terminal sales but are frequently overlooked, facing challenges from channel compression and shifting consumer demands. This article explores their plight and the empowerment initiatives by Tongfu Group, including a live-stream ordering event aimed at revitalizing these stores.

Terminal stores are a unique group in the FMCG industry. Most of these stores are operated by couples, commonly known as mom-and-pop shops, especially in county and township markets. When business is slow, the couple can manage; during peak seasons, they might hire a relative or two, or have their children help during holidays. Behind them, the family unit is the core, working hard for their livelihood. This group carries the banner of terminal sales but is often neglected. They are at the grassroots of the sales chain, directly facing consumers, yet they lack sufficient resources and support. Market fluctuations and changes in customer demand can render their efforts futile. During a visit to a township terminal store, when asked about business, the owner sighed, "Just so-so, barely making a living. Price pressure is intense; business is tough these days." Indeed, they are struggling to survive but unable to thrive, and the survival situation for traditional terminal stores is not optimistic...

**Channel Squeeze**
**The Chill at Terminal Stores Deepens**
As the Mid-Autumn Festival approaches, manufacturers are busy preparing for the peak season ordering. New Distribution observed that Tongfu Group's Tongfu Sharing Platform has launched a series of empowerment plans for terminal small stores. New Distribution learned that on **August 7**, the platform will launch **the first live-stream ordering event specifically for physical stores** — the **"National First Thousand-Merchant, Ten-Thousand-Store Live Ordering Event."**

It is understood that this online live-stream ordering event targets the procurement needs of millions of physical small stores in county markets, jointly initiated by manufacturers, distributors, and physical stores, i.e., Tongfu Premium Stores. It will use a combination of physical and digital live-stream ordering, with 200 manufacturers online simultaneously, offering a thousand products, to smooth physical distribution channels, solve distribution pain points for manufacturers and distributors, help physical small stores operate efficiently, and deliver low-priced, high-quality products to county consumers. Why is Tongfu Group doing this? Due to the squeeze from online channels, the survival of terminal stores faces severe challenges. According to the National Bureau of Statistics, in 2023, the proportion of online retail sales in total retail sales of consumer goods continued to rise, with physical goods online retail sales growing 8.4% and accounting for 27.6% of total retail sales. This trend indicates that more consumption is shifting online, and the changing market structure puts persistent pressure on traditional supermarkets. Additionally, the proliferation of snack and discount supermarkets adds insult to injury for traditional terminal small stores. During a market visit, a snack food distributor in Shandong told New Distribution: "On a commercial street, there were several convenience stores and small shops, all doing well. In the first half of last year, a snack store opened, and at its peak, it sold nearly 40,000 yuan a day, taking away a large share of business. In the second half, it was worse—four snack stores opened on the same street, and the surrounding small shops were nearly bankrupt, barely retaining some customers thanks to tobacco licenses." In county markets, the impact is even more severe: although there were only five Haolaixiang snack stores of over 100 square meters locally, after six months, the business of surrounding traditional stores generally declined by more than 20%. The chill at terminal stores is intensifying.

Under multiple pressures, a significant change is reflected: **traditional sales models have failed, and consumer demand is shifting from a single price orientation to quality and service, pursuing "value for money."** Tongfu Group's "National First Thousand-Merchant, Ten-Thousand-Store Live Ordering Event" is held during the Mid-Autumn peak season, breaking with traditional thinking. Through measures such as product structure, product mix, and price advantages, it helps terminal small stores refine their products, improve operational service capabilities, and establish an efficient fulfillment model for terminal stores.

**Tailor-Made Ordering Event**
**Empowerment for Terminal Stores**
So, what is the specific path for terminals to create incremental growth? Liu Chunxiong, a channel digital marketing expert, advocate of new marketing, and dean of the Marketing Digitalization Research Institute, once proposed a method: **"Jump out of the terminal, enter the C-end, and treat the terminal as a starting point."** In simple terms, it means restructuring the relationship between people, goods, and places, changing the traditional logic of managing shelves to "**managing products**" logic, and deriving product assortments from consumer demand. It is understood that this "National First Thousand-Merchant, Ten-Thousand-Store Live Ordering Event" will break traditional product structures, covering 1.06 million terminal stores on Tongfu Cloud Business, 100,000 Tongfu Premium Stores, a thousand manufacturers, and 500 operators.

**First, scientific stocking.** Tongfu advocates not overstocking. Through big data support, manufacturer-distributor collaboration, and Tongfu's supply chain, it helps terminal stores avoid issues like unsold goods and overstocked near-expiry products caused by excessive pressure. As is well known, during peak seasons, manufacturers push hard to sell inventory, setting unlimited sales targets for distributors, while downstream small stores have slow turnover and can't sell. Manufacturers pressure distributors, distributors pressure stores, layer by layer, leading to chaotic stocking, burdening stores with heavy inventory, and leaving piles of near-expiry products, wasting manpower, materials, and logistics costs. Therefore, at this "National First Thousand-Merchant, Ten-Thousand-Store Live Ordering Event," stores can order based on their sales situation, and replenish offline at any time. The Tongfu Sharing Platform, manufacturers, local operators, and Tongfu market personnel will provide guidance and services for replenishment and stocking. Additionally, if stores face capital shortages, Tongfu Group will provide corresponding supply chain financial support.

**Second, product empowerment.** Through a series of big data analyses, Tongfu Group provides terminal stores with essential, high-quality, low-priced bestsellers and combinations. Especially in county markets, the consumption capacity of lower-tier markets has begun to release "upward" potential. In the first quarter of this year, per capita consumer spending of rural residents nationwide was 5,050 yuan, a real increase of 9.2%, 1.5 percentage points higher than urban residents. McKinsey predicts that by 2030, over 66% of China's personal consumption growth will come from lower-tier markets, especially county towns. While county consumption grows rapidly in "quantity," it also shows new changes in "quality," gradually transitioning from "product-focused" to "brand-focused," and from a single "price-focused" to multiple "quality-focused" aspects, i.e., cost-performance. Therefore, at this ordering event, Tongfu brings together dozens of well-known brands and hot-selling products, such as Mengniu, Yili, Pepsi, Three Squirrels, Xinxiangyin, etc., cooperating directly with manufacturers, offering the lowest prices, with a full chain directly to terminal stores, reducing costs and increasing efficiency.

**Finally, professional guidance.** During the live stream, well-known domestic marketing experts will appear to teach business strategies and special techniques for organizing goods, as well as courses to improve operational capabilities, allowing terminal store owners to understand current retail trends and business methodologies, and to empower and upgrade both products and store operations. It is worth emphasizing that this online "National First Thousand-Merchant, Ten-Thousand-Store Live Ordering Event" is a bold innovation and breakthrough in form, and will be normalized in the future, continuously upgrading small stores, providing store owners with industry trends, and ensuring they don't fall behind.

**Linking Manufacturers, Distributors, Stores, and Customers**
**Evolution of Terminal Stores**
So, being at the grassroots of the consumption chain and squeezed by multiple online and offline channels, especially in many county markets where terminal store owners have slower ideological updates, will terminal small stores disappear? No! Why? Because small stores solve the last 100 meters and the immediate 5-minute problem for consumers. Every small store has its own ecological niche. As long as food delivery doesn't achieve nationwide instant 5-minute delivery, small stores will never die. Clearly, the sales model of "terminal is king" has not died but evolved.

Kang, the owner of Xiangbei Supermarket, a township supermarket in Zhao County, Hebei, told New Distribution that she runs a general store in a local village, covering about 300 square meters, with a full range of categories including food and beverages, daily chemicals and seasonings, and rice, flour, and oil, meeting the daily needs of the entire village. She joined Tongfu Premium Store in March this year. Before joining, she had over 2,000 SKUs and average daily sales of 3,000-4,000 yuan; after joining, SKUs increased to over 4,000, and average daily sales reached 7,000-8,000 yuan, doubling, and even exceeding 10,000 yuan during holidays. Kang said, "The biggest help after joining the Premium Store is expanding new customer flow, retaining old customers, and increasing visibility within a hundred miles around the village." How did they do it? Tongfu arranges dedicated staff on-site, conducts stored-value gift activities at the opening to attract more people, and after drawing customers, continuously launches bestsellers and special offers to retain them.

In rural markets, neighbors are acquaintances, and once there is a special offer, it spreads throughout the village and even neighboring villages. Soon, Xiangbei Supermarket saw a steady stream of customers, with 50% from surrounding villages, and its reputation suddenly took off. In Kang's words: "Now big brands like Liuhe Taohu and Yili are proactively coming to me; that never happened before." "The most convenient thing is that there are daily bestsellers and special offers. I order online on Tongfu Cloud Business, and Tongfu arranges logistics to deliver to the store. The key is that the prices are lower than my own purchase prices. I've already hired an extra staff member, but I still feel overwhelmed; I might need to add another person." Kang said. At this "National First Thousand-Merchant, Ten-Thousand-Store Live Ordering Event," Kang is also prepared to stock up on big-brand bestsellers. Kang emphasized that rural people now recognize brands, and this ordering event mainly aims to find big-brand, high-volume products that are good quality and low price, easy to sell, and with higher profits.

Indeed, Bian, a county terminal store owner in Xingtang County, Hebei, also mentioned that although in rural areas, villagers' brand awareness is higher than a few years ago. Products that are low-priced and from big brands are in high demand and sell quickly. Xiangbei Supermarket is just one example among thousands of premium stores; in other county markets, there are more "Xiangbei Supermarkets."

Clearly, Tongfu's premium store model has received positive feedback. Whoever creates incremental growth for terminals will receive more existing business from them.

Undoubtedly, the terminal market is the decisive battleground for the future; whoever controls the terminal wins.

**Final Thoughts**
Terminal small stores, as an "individual operation" format in offline retail channels, lack brand endorsement and risk resistance, appearing "shaky" under the surging channel impact. Especially in county markets, behind them are tens of thousands of family livelihoods. People's Daily published an article by Huang Yajun, Secretary of Pengxi County Party Committee, titled "Developing New Quality Productive Forces to Promote High-Quality Development of County Economy," which mentions: "Adhere to new quality productive forces as the traction to empower high-quality development of the county economy." Tongfu actively responds to major development policies such as the national rural revitalization strategy, platform economy development, real economy development, new quality productive forces economic thought, county economy development, and deep integration of digital and real economies, positioning Tongfu Premium Stores as "New Commercial Comprehensive Service Centers." In addition to FMCG empowerment, it will also add cross-industry empowerment, including services like parcel collection and delivery, savings outlets, and physical examinations, truly becoming a sustainable development model, and continuously exploring growth paths for terminal small stores, bringing long-term benefits. In the short term, Tongfu Premium Stores provide stable income sources for millions of families; in the long run, they bring not only economic value but also infinite social value. It is using new quality productive forces to promote high-quality transformation, activate and boost the vitality of county consumer markets, and turn tens of thousands of terminal small stores into "**New Commercial Comprehensive Service Centers**" for local county retail markets.


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