---
title: "The Summer of Convenience Stores"
description: "Why has the internet failed to disrupt convenience stores? Despite the rapid growth of the internet and its impact on traditional industries, convenience stores have remained an exception. According to the \"2019 China Convenience Store Development Report\" jointly released by KPMG and the China Chain Store & Franchise Association, the industry grew at a stable and rapid rate of 19% in 2018, with a market size exceeding 200 billion yuan. Notably, the average daily sales per store surpassed 5,300 yuan, a year-on-year increase of about 7%."
author: "林川"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-09-07"
categories: "Retail Formats"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/the-summer-of-convenience-stores-9de79328/"
markdown: "https://xinjignxiao.com/en/articles/the-summer-of-convenience-stores-9de79328.md"
original_source: "https://mp.weixin.qq.com/s/vrr_gbigddDOACljp9l5_Q"
translation: "https://xinjignxiao.com/zh/articles/%E4%BE%BF%E5%88%A9%E5%BA%97%E7%9A%84%E5%A4%8F%E5%A4%A9-9de79328.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/the-summer-of-convenience-stores-9de79328/"
citation: "林川. “The Summer of Convenience Stores.” New Distribution, 2019-09-07. https://xinjignxiao.com/en/articles/the-summer-of-convenience-stores-9de79328/"
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---

# The Summer of Convenience Stores

> Why has the internet failed to disrupt convenience stores? Despite the rapid growth of the internet and its impact on traditional industries, convenience stores have remained an exception. According to the "2019 China Convenience Store Development Report" jointly released by KPMG and the China Chain Store & Franchise Association, the industry grew at a stable and rapid rate of 19% in 2018, with a market size exceeding 200 billion yuan. Notably, the average daily sales per store surpassed 5,300 yuan, a year-on-year increase of about 7%.

**Why has the internet failed to disrupt convenience stores?**
With the rapid development of the internet, almost every traditional industry has suffered varying degrees of impact.
But convenience stores are an exception! According to the "2019 China Convenience Store Development Report" jointly released by KPMG and the China Chain Store & Franchise Association:
In 2018, China's convenience store industry maintained stable and rapid growth, with an industry growth rate of 19% and a market size exceeding 200 billion yuan. Notably, the average daily sales per store exceeded 5,300 yuan, a year-on-year increase of about 7%.
That is to say, **even in the face of the internet's impact, convenience stores still show strong vitality!** More incredibly, traditional convenience stores have also spawned new business formats, seizing market areas that originally belonged to the catering industry.
**The "Fast" and "Good" of Convenience Stores**
**Even the internet is not enough to overturn them** Starting from 2015, a large number of FMCG companies experienced a wave of closures, including department stores, supermarkets, and brand stores, and there has been no sign of relief so far. Even Carrefour China, the second-largest retail chain group in the world, was acquired by Suning for a mere 4.8 billion yuan! So why haven't convenience stores been impacted? In fact, **it is not that formidable competitors have overlooked them, but that the internet's business model cannot cause a disruptive impact on convenience stores!**
For example, although internet shopping is very convenient, it is not as fast as convenience stores; although internet shopping is very affordable, for users, they simply do not care about price. Imagine, as a consumer, would you be willing to walk 2 kilometers to a supermarket to buy a bottle of water, or go to the convenience store downstairs? Even if the convenience store's price is 50 cents more expensive.
Apart from the business model level, another important reason why convenience stores cannot be overturned is that **24-hour convenience stores are becoming increasingly warm.** Traditional convenience stores are mostly located near residential areas, providing daily necessities and catering more to emergency needs; but with the continuous development of cities, new business formats such as "convenience store + catering" have also emerged.
Late at night, although there are various restaurants and snacks on the streets of the city, for many tired overtime workers, convenience stores are "warmer than a boyfriend," not only providing hot staple foods and bread to fill the stomach, but also offering a quiet place to rest for a while, releasing tired body and soul.
Enjoy the tranquility and solitude of the convenience store alone! Imagine, can the internet provide this sense of space and convenience, including hot rice and staple foods?
**Fresh E-commerce Platforms and Unmanned Shelves**
**Also Not a Threat** For many people in retail, solving the "last mile" problem may be the last offline dividend. Because of this, various business model innovations have sprung up like mushrooms after rain. Take campus O2O as an example.
In 2014, campuses attempted the "last mile" by having more diligent people provide delivery services to lazier people, that is, delivering to dormitories. The result proved that this was only a pseudo-demand, and it disappeared within just one year! Imagine, even if this model had succeeded, once supermarkets provide delivery services, this model of "middlemen earning hard-earned running money" would also die instantly.
Following that, the fresh O2O e-commerce platform model was born.
Take Miss Fresh and JD Daojia as examples.
Their core business model lies in: **on the one hand, deeply cultivating global high-quality supply chains, selecting thousands of SKUs, and launching customized products for high-frequency consumer needs; on the other hand, fully promoting the construction of front warehouses, and through the logistics of "city sorting center + community distribution center," achieving one-hour delivery service for all categories.** However, what this model attempts to overturn is still traditional supermarkets like Walmart and Yonghui Superstores. Because Miss Fresh and JD Daojia can neither solve the rigid needs of mobile populations in a short time, nor provide the consumption scenario of "space + hot food." More importantly, the delivery time and minimum order amount thresholds have created new consumption barriers.
Then there are unmanned shelves. Unmanned shelves, which have repeatedly refreshed financing amounts, can be said to be the next new retail trend after shared bikes and shared power banks.
However, this model was ultimately proven to be a failure. The reasons are nothing more than the huge cost of replenishment and the difficulty of continuous tracking; in addition, the costs of loss and site rental are also relatively high. More critically, the variety of selectable product categories is too limited. Although unmanned shelves have a tendency to evolve into unmanned supermarkets, if that really happens, it would only be the difference between manned and unmanned!
**The Dilemma of Convenience Stores Lies in Themselves, Not Outside**
Admittedly, although convenience stores have not been disrupted by the internet and have shown strong vitality, it does not mean there are no problems. Among them, the most critical issue is that **convenience stores find it difficult to achieve profitability, especially for chain stores!**
**First, low sales per square meter and low labor efficiency lead to low gross margins.** Although many convenience stores have many product categories, in fact, only a few products contribute to high sales, and the vast majority of products are just for display. Whether it is store location selection, product SKU selection, or product display and iteration, it is difficult to maximize the utility per square meter of the store. **Second, although foot traffic is high, "retained users" are relatively low.** Although convenience stores focus on traffic management, **the importance of the existing market lies in that it can both increase repurchase rates and enhance brand awareness.** Imagine, among convenience stores within a 500-meter radius, would you prefer to go to FamilyMart or another unknown convenience store?
So, how should improvements be made?
**Improve User Experience Satisfaction**
**Strengthen the "Fast and Good" Characteristics of Convenience Stores** As for "convenience," it can be solved through location selection; what really needs improvement is how to become "better"? In my opinion, **the key is to maximize user experience satisfaction!** For example, increase the proportion of hot food sales; for example, make product display and placement more scientific; and for example, add dine-in areas. Especially hot food is both the most advantageous way to resist the impact of the internet and the most effective means to increase store stickiness. Of course, the taste and hygiene of cooked food are also very important. **Furthermore, efforts should be made in operations.** For example, establish a membership system for the store, use this membership system to establish connections with members, frequently launch promotional activities and tasting events, and increase the proportion of repeat customers.
For another example, you can build a virtual store through the Meituan platform. In this way, you can both increase the store's coverage radius and increase overall sales; and achieve profit optimization under low gross margins. **Finally, find ways to reduce the store's "supply chain costs," "management costs," and "product costs."** In this regard, domestic convenience store brands should really learn from 7-ELEVEN and FamilyMart!
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## Citation metadata

- Publisher: New Distribution
- Author: 林川
- Published: 2019-09-07
- Canonical: https://xinjignxiao.com/en/articles/the-summer-of-convenience-stores-9de79328/
- Original source: https://mp.weixin.qq.com/s/vrr_gbigddDOACljp9l5_Q

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