“If I don't renovate, young people won't even step inside,” Lao Huang said with a wry smile. At the entrance of Lao Huang's store, the once-faded sign has been replaced with a bright, wide, and colorful storefront. The shelves, previously cluttered with miscellaneous items, have been reorganized into distinct sections, and the product displays now carry a touch of the refined aesthetic seen in 'internet-famous' stores. However, this renovation was not a proactive change but a reluctant move forced by three new snack stores that opened nearby. Behind this lies the challenge confronting millions of mom-and-pop shops across China: when discount stores open at a breakneck pace, chain convenience stores continue to expand into lower-tier markets, and near-field e-commerce's '30-minute delivery' cavalry simultaneously rolls over community commerce, traditional small stores are facing an unprecedented survival test.

Impact from Multiple Retail Formats

The 'Fall' of Traditional Small Stores

During the Spring Festival, I returned to my hometown in Guizhou. From the high-speed rail station to home, the road was lined with red and yellow storefronts, with a snack store appearing almost every other block. What surprised me even more was that Lao Huang's tobacco and liquor store, which had been open for over twenty years near my home, had also undergone a major transformation this year. “Business has been tough these past few years. Last year, three snack stores opened on this street. If we didn't make some changes, business would only get worse,” Lao Huang told me. Looking around, I noticed that besides the snack store 'Snack Era' right next to Lao Huang's shop, there were also 'Snack Busy' and 'Snack Preferred' further north. “I first saw snack stores when I traveled to Changsha, but they weren't a big deal then. There were almost none in our area. In the past year or two, they've sprung up like mushrooms after rain, one batch after another,” Lao Huang said helplessly. “On regular days, it's okay; there's only so much foot traffic, and none of the stores have engaged in price wars. But on membership days with 8.8 discounts, those snack stores do incredibly well. Their products are already cheaper than mine, and with membership discounts, there's no way I can compete on price.” New retailers always appear as 'price killers,' and snack stores are no exception. By integrating supply chains, shortening distribution channels, and working directly with upstream manufacturers, snack stores offer products at prices 20%-30% lower than traditional retail. Besides snack stores poaching Lao Huang's business, the two nearby chain convenience stores also have a significant impact. In Guizhou, late-night snacking is a popular culture, and at night, two or three barbecue stalls set up near Lao Huang's store. “In the past, people coming for late-night snacks would buy beer and drinks from me, but since those two convenience stores opened, it's been hard to sell anything from my freezer,” Lao Huang lamented. Previously, Lao Huang's store was the last to close on the street, but since the 24-hour convenience stores opened, he feels immense pressure. “Those convenience stores have too many categories—all kinds of imported drinks and beers that I never stocked before. Later, I tried to source some online, but it didn't work well.” Japanese convenience store chains have accelerated their localization in China in recent years, while regional convenience store brands dominate lower-tier markets. Unlike the flexible operations of mom-and-pop shops, convenience stores operate with more standardized models and differentiated products, making it difficult for mom-and-pop shops to compete effectively. In addition to snack stores and convenience stores, the influence of near-field e-commerce is becoming increasingly evident. In the past, delivery riders on the streets were mainly delivering food takeout, but now more and more riders are delivering retail items like groceries and daily necessities. When I asked Lao Huang if he had tried online delivery, he said, “I tried integrating with delivery platforms earlier, but the commissions and delivery costs were too high, and order volumes were pitifully low. Profits were almost entirely eaten up by the platforms, so I shut it down. ” Whether it's the low-price strategy and youthful appeal of snack stores, or the competition between convenience stores and near-field e-commerce for the 'last mile,' the impact on Lao Huang's business is undoubtedly enormous. Under the 'triple squeeze' of discount snack stores, chain convenience stores, and instant retail, Lao Huang's tobacco and liquor store is struggling to survive in the cracks.

Over Twenty Years in Business

Lao Huang's Tobacco and Liquor Store 'Holds On'

Lao Huang's tobacco and liquor store has been on this street for nearly twenty years. In the early years, getting a tobacco and liquor license was easy, and profits were good. Besides tobacco and alcohol, Lao Huang also sold bulk snacks and candies, and business was brisk during holidays. His children work elsewhere, and Lao Huang and his wife live upstairs. Since they own the storefront, they have no rent pressure, and as both owner and employee, they don't worry about payroll. Lao Huang is well aware that they run a business based on repeat customers, and repeat purchases are key. That's why his shelves are mostly stocked with popular national brands. “In the past, I had good relationships with the neighbors. When WeChat Pay wasn't as widespread, my credit ledger was full. During the New Year, I could sell a lot of Xu Fuji crispy candies alone. All I had to do was open the door, turn on the TV, and wait downstairs. Now it's tough—competition is fierce, and the environment is bad,” Lao Huang said. When I asked Lao Huang why he didn't just close the store and do something else instead of spending money on a new sign and renovation, he replied, “This store is like my third child; I can't just close it. Even if I can't keep the young people, I need to keep the old customers who buy cigarettes and grab a bottle of water on the way.” Traditional mom-and-pop shops are mostly located in urban villages in first-tier cities, second- and third-tier cities, or townships. Lao Huang's predicament is a true reflection of millions of mom-and-pop shops across China. In recent years, the number of convenience stores in China has reached 321,000. In first- and second-tier cities, convenience store density continues to increase, and they are also expanding into third-tier and below cities. After a period of rapid growth, snack stores have also opened over 40,000 stores in just two years, sweeping through second- and third-tier cities as well as townships.

Through snack stores and convenience stores, we see that the trend of chain operations in community retail is strengthening. They leverage the efficiency advantages of scale and standardized operations to squeeze the business of traditional small stores. The rapid development of near-field e-commerce also poses a challenge to traditional small stores. Small stores that understand online operations can generate incremental business, but those that don't may be negatively affected. Facing such formidable competitors, Lao Huang is certainly one of the millions of small store owners who continue to learn how to run their stores better and how to avoid being left behind by the times.

Upgrading in the Cracks

The Considerations Behind the 'Facelift'

I visited just before the Spring Festival, and Lao Huang's storefront was filled with a dazzling array of gift boxes. Before actually talking to Lao Huang, I thought he was just following the trend of snack stores by changing his sign and decor. But from our conversation, it became clear that Lao Huang had given careful thought and had a clear understanding of the renovation he had invested in. His store isn't large, but the layout shows ingenuity. He increased the lighting brightness. Lao Huang said, “The lights in the store used to be too dim; from a distance, people thought we were closed. So I took this opportunity to update the old decor.” He also optimized the displays, moving best-selling items like drinks and snacks to the entrance, and even adopted a bulk-snack section in the middle of the store, mimicking snack stores. “I kept the bulk candies. Even though young people don't buy them now, the elderly who bring their grandchildren still appreciate them,” Lao Huang said. To avoid direct price competition with snack stores, Lao Huang also introduced local specialty products. Outside the store, he displays local snacks like potato chips and beef jerky, as well as alkaline noodles and free-range eggs. “It's my own business. If those snack stores and convenience stores do something well, it doesn't hurt to learn from them,” Lao Huang said. “In recent years, we've also switched suppliers. The current supply platform offers exclusive discounts and helps optimize product selection. Overall, despite the intense competition, we can barely hold on.” Since the renovation, Lao Huang has noticed a slight improvement in business. Mom-and-pop shops have always been a unique presence in the Chinese market, often stereotyped as conservative and unprogressive. For most small store owners, the biggest step forward they can take is becoming a community group-buying leader. It's rare to see someone like Lao Huang who proactively explores new avenues and undertakes bold reforms.

Final Thoughts

“Renovating is just the first step. Next, I need to figure out how to compete with those 'big guys,'” Lao Huang said, standing in his refreshed store, his tone weary but resilient. This year, we see supermarkets adjusting, convenience stores adjusting, and mom-and-pop shops adjusting. Everyone is adjusting, all with a common goal—to survive. The chain trend in community retail and the reshaping of consumption habits by near-field e-commerce are irreversible. Mom-and-pop shops can never defeat the chain giants, but their existence remains the last line of defense for the city's vibrant street life. In this battle between old and new retail formats, the answer to survival may lie in this phrase: “You don't need to defeat anyone; you just need to find your own 'irreplaceability.'” The retail industry will continue to evolve, and the chain process won't pause. Traditional small stores will still face tough times. How should the distributors behind these small stores respond to these changes? From March 17 to 19, the 10th China FMCG Innovation Conference will be held in Chengdu, alongside the [4th China FMCG Distributor Conference]. We will invite over a dozen outstanding distributors from the industry, including those with deep operational experience in categories like snacks, daily chemicals, and seasonings, as well as benchmarks who have transformed into B2b and deeply serve small stores. They will share how they shifted from manufacturer-centric to store-centric business and how they highlight their industry value in a volatile market environment! 【New Order · Symbiosis】 The 10th China FMCG Innovation Conference Date: March 17-19, 2025 Location: Chengdu, China