---
title: "Under the Duel of Two Snack Giants, Small and Medium Snack Stores 'Have No More Opportunities'"
description: "A snack store can go from opening to closing in just two months, with some franchisees announcing store transfers after only 30 days. Industry insiders suggest that many owners profit from subsidies and transfer their stores within a few months, while the rise of two dominant players (Mingming Henmang and Wanchen Group) has left most small and medium snack stores with no chance in the snack category alone."
author: "楚勿留香"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2024-11-16"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/f2hgcvZ79kUy3nr_-fBY7g"
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# Under the Duel of Two Snack Giants, Small and Medium Snack Stores 'Have No More Opportunities'

> A snack store can go from opening to closing in just two months, with some franchisees announcing store transfers after only 30 days. Industry insiders suggest that many owners profit from subsidies and transfer their stores within a few months, while the rise of two dominant players (Mingming Henmang and Wanchen Group) has left most small and medium snack stores with no chance in the snack category alone.

How fast can a snack store go out of business?
Some snack stores close within just two months of opening, and some franchisees announce store transfers after only 30 days.
Of course, some so-called industry insiders say that most costs are recovered within two months: "The company provides subsidies, and after the opening activities are done, most costs are recovered in two months. Many owners make money from subsidies and transfer the store after two or three months."
Even insiders say, "To quickly recoup investment, the only way is for novices to take over. The physical retail financialization model has high turnover. If you rely on normal operations to recoup in two months, that's a dream!"
These claims are somewhat extreme, but an undeniable fact is that the success rate of snack store franchising is not as high as imagined.
On various short-video platforms, many snack store franchisees share cases of losses and closures.
One franchisee said they closed after two months, selling six to seven thousand yuan a day but still losing over 600,000 yuan.
**Even consumers joke, "In a small city, dozens of stores opened in a few months; even my kid knows it's a scam."**
Many franchisees join well-known snack brands, yet there are constant reports of franchise stores being transferred or closed.
The reasons for franchise store closures are many, possibly related to location, products, prices, quality, or competitive environment.
Analysts say this is also related to the inherent "defects" of snack stores: First, snacks are somewhat a necessity but not an absolute one; second, the consumption scenario is single, and single-store profitability is not strong; third, severe homogenization competition further undermines already low single-store profitability.
Now, the emerging bulk snack industry has formed a "two giants" (Mingming Henmang and Wanchen Group) dominance, and most small and medium snack stores have no more opportunities in the snack category alone.
In such a competitive snack industry, being sold out might be the most dignified "exit" for many small and medium snack brands.
On October 28, Three Squirrels announced that its wholly-owned subsidiary, Anhui Yijianshi Venture Capital Investment Co., Ltd., plans to invest a total of no more than 360 million yuan to acquire control or related business and assets of Hunan Ai Snack Technology Co., Ltd., Future Has Come (Tianjin) Technology Development Co., Ltd., and Anhui Zhiyang Food Co., Ltd.
The investment amounts for the three companies are 200 million, 60 million, and 100 million yuan respectively. This transaction is still in the preliminary planning stage, and the specific plan needs further negotiation.
**In the eyes of outsiders, this is the best outcome for the acquired snack enterprises.**
A founder of a domestic snack chain brand told the author that since the beginning of this year, franchising in various snack brands has become extremely competitive. "Snack brands not only receive no fees but also have to continuously subsidize. Head brands, in order to expand their territory, use capital expansion, which has affected smaller brands to some extent."
Many small and medium snack enterprises are dragged into competition with zero franchise fees, zero management fees, zero training fees, zero service fees, zero profit on decoration, and even huge subsidies for opening stores.
The living space for small and medium snack enterprises is further compressed. Of course, this is not about right or wrong; business competition is the "law of the jungle," survival of the fittest.
To some extent, purely doing snacks, small and medium snack enterprises basically have no chance. The best case is to stay in a corner and survive.
Therefore, many small and medium snack brands choose to transform, and they have no choice but to transform. Otherwise, another outcome might be bankruptcy.
Some snack enterprises have transformed into hard discount stores.
For example, Snack Youming, with over 3,500 stores, announced during this year's National Day that it has opened 189 "hard discount full-category wholesale supermarkets" nationwide, calling them the 4.0 version of its stores.
Analysts believe that Snack Youming's hard discount stores are an upgraded version of Le'erle, and if the financials work out, there is potential for future development.
In September this year, Snack Youxuan's subsidiary Huizhen Wholesale Supermarket began stocking; in August, Ai Snack announced the addition of a convenience store format; Qiahuo Puzi transformed into a supermarket by expanding full categories; Xixi Snack opened Wuxiaochao Wholesale Department...
Some enterprises have transformed from snack stores to family food premium stores, with Qihuojie being a typical representative.
Zhang Yuhai, founder of Qihuojie, said that no industry can have only one business model or only one brand. The current situation is very competitive, and small brands find it hard to survive. But as long as they strive for differentiation, complement the market, truly achieve "consumer value first," continuously improve internal strength, reduce costs and increase efficiency, stick to their positioning, and stay true to their original intention, more brands will survive.
Currently, Qihuojie adheres to its differentiated positioning and "altruistic" values. A considerable number of old franchisees continue to open stores and introduce new franchisees.
"Overall, we are advancing steadily while maintaining development. The current core contradiction is to ensure store quality, so the pace of store development has slowed down," Zhang Yuhai said.
Under the "two giants" pattern, Mingming Henmang Group and Wanchen Group continue to open stores.
According to Frost & Sullivan data, as of June 2024, the total number of stores under Mingming Henmang Group's two brands, "Snack Very Busy" and "Zhao Yiming Snacks," exceeded 10,000, making it the first enterprise in the industry to break the 10,000-store mark.
By October this year, the number of stores under the two brands exceeded 13,000, another big step forward.
An insider revealed that Wanchen Group's snack store count has also exceeded 10,000. Some analysis suggests that based on public data, by the end of 2024, Wanchen Group's snack store count will reach 12,000.
Of course, these two giants also face their own challenges. The insider said that in the first half of this year, same-store sales for snack stores basically had no growth. That is, same-store growth has basically stalled, with more expansion through franchising and increasing store numbers.
For Mingming Henmang Group, the biggest challenge may be to get listed as soon as possible.
In August this year, media reported that Mingming Henmang Group planned an IPO in Hong Kong, but the group responded that it currently has no listing plans.
Behind the rise of Mingming Henmang and Wanchen Group is strong capital support and strategic investment layout.
For example, Mingming Henmang introduced hundreds of millions in financing in 2021 and laid out supply chain bases nationwide, gradually building a complete chain from raw material procurement to terminal sales. Through this integrated model, giants reduce unit costs and achieve efficient allocation in supply chain and logistics, thus gaining a price advantage.
Some of Mingming Henmang's main snack products are about 20% cheaper than traditional brands, quickly attracting a large number of cost-conscious consumers.
In addition, Mingming Henmang and Wanchen not only open stores densely in first- and second-tier cities but also extend to third- and fourth-tier cities and even county-level markets to ensure penetration at every consumption level. They also focus on e-commerce platforms, effectively covering consumers of different ages and regions through online and offline integration.
In contrast, small and medium snack stores, due to limited channel resources, find it difficult to compete with giants. This crushing advantage of omni-channel control makes survival even harder for small and medium snack brands.
It is worth noting that the price war between the "two giants" has entered a white-hot stage, with frequent member discounts and limited-time promotions continuously compressing market profit margins in the snack category.
For example, in 2023, during the "Member Day" activity launched by Mingming Henmang, some hot-selling snacks were priced as low as under 5 yuan, attracting a large number of customers but making it difficult for competitors to follow.
In the second half of 2023, Mingming Henmang's price war increased its turnover by about 18%, but small and medium snack stores, unable to profit from low-price competition, saw sales plummet, and many small and medium brands had no choice but to close to avoid further losses.
Even in terms of brand awareness, small and medium snack enterprises cannot compare with the "two giants."
Not only small and medium snack stores, but traditional snack brands are also squeezed by giants. Brands like Bestore and Three Squirrels face multiple pressures in market share and brand image.
With the expansion of the "two giants," more and more traditional snack stores are on the decline.
This can be seen from the market performance of Bestore (603719.SH), Lai Yifen (603777.SH), Baicaowei (acquired by Haoxiangni in 2016), Three Squirrels (300783.SZ), and Yanjin Puzi (002847.SZ).
In 2023, Bestore saw a revenue decline of 15%, with revenue of 8.046 billion yuan and net profit of 180.3 million yuan, down 14.76%. In 2022, Bestore's revenue and net profit were 9.44 billion yuan and 335 million yuan respectively.
Lai Yifen and Three Squirrels also saw revenue declines.
In 2023, Lai Yifen achieved operating revenue of 3.977 billion yuan, a year-on-year decrease of 9.25%, its first revenue decline since listing in 2016; net profit attributable to the parent was 57 million yuan, down 44.09% year-on-year, and non-GAAP net profit attributable to the parent fell sharply by 80.43%.
In 2023, Three Squirrels' revenue was 7.115 billion yuan, down 2.45%; net profit was 220 million yuan, up 69.85% year-on-year.
**Only Yanjin Puzi achieved double growth in revenue and net profit.**
In 2023, Yanjin Puzi achieved revenue of 4.115 billion yuan, up 42.22% year-on-year; net profit was 506 million yuan, up 67.76%.
In terms of revenue scale, Bestore still leads. However, net profit has been overtaken by Three Squirrels and Yanjin Puzi.
According to a report by 21st Century Business Herald, since 2019, the landscape of the five companies has changed dramatically: Three Squirrels dropped from 10 billion in revenue four years ago to 7.1 billion, Haoxiangni has divested Baicaowei, Lai Yifen has stagnated, Bestore has declined, while Yanjin Puzi has seen significant revenue growth.
Now these companies are all facing challenges and have made some adjustments.
Take Yanjin Puzi as an example. It entered the bulk channel in 2021 and has now become the largest supplier to Snack Very Busy. In 2022, Snack Very Busy contributed 211 million yuan in sales, becoming Yanjin Puzi's largest customer, accounting for 7.31% of total sales.
Entering 2024, the situation has changed again.
On October 28, Yanjin Puzi Food Co., Ltd. released its third-quarter report. In the first three quarters of 2024, Yanjin Puzi achieved operating revenue of 3.861 billion yuan, up 28.49% year-on-year; net profit attributable to shareholders of the listed company was 493 million yuan, up 24.55%.
In addition, another former internet-famous snack, Three Squirrels, also achieved good results in the first three quarters.
In the first three quarters of this year, Three Squirrels achieved revenue of 7.169 billion yuan, up 56.46% year-on-year; net profit attributable to the parent was 341 million yuan, up 101.15%.
In contrast, another leading snack company, Bestore, had poor third-quarter results. In the first three quarters of this year, Bestore achieved revenue of 5.48 billion yuan, down 8.66% year-on-year; net profit attributable to the parent was 19.3903 million yuan, down 89.86%.
In fact, as early as 2023, Bestore saw a revenue decline of 15%, with revenue of 8.046 billion yuan and net profit of 180.3 million yuan, down 14.76%. In 2022, Bestore's revenue and net profit were 9.44 billion yuan and 335 million yuan respectively.
At the beginning of 2023, Bestore invested in Zhao Yiming Snacks, which followed in its A-round financing. But in less than a year, Zhao Yiming Snacks merged with Snack Very Busy, and less than a month before the merger, Bestore withdrew from Zhao Yiming Snacks' shareholders.
In December 2023, Bestore, as a former shareholder, filed a lawsuit against Zhao Yiming, claiming it was not informed in advance of the integration of Zhao Yiming and Snack Very Busy, missing the opportunity to sell shares at a high valuation.
Although selling shares early made a profit, it was not worth it for Bestore.
As reported by Jiemian News, it lost not only indirectly controlled market share but also the time window.
**Facing the rapid rise of bulk snacks, Bestore has also made adjustments.**
On one hand, the company attracts more consumers by lowering prices. In November 2023, Bestore announced the largest price cut, with an average reduction of 22% on 300 products, and a maximum reduction of 45%.
On the other hand, Bestore seeks a way out through differentiated demand and product innovation, while also developing its bulk snack brand, Snack Wanjia.
In November last year, Bestore clarified its store opening plan for Snack Wanjia, planning to open 500 new stores this year. Snack Wanjia is a new brand launched by Bestore in 2022 to expand its snack bulk chain business.
Analysts believe that Bestore's significant price cuts have not boosted performance for two reasons: First, due to fierce market competition, Bestore's products no longer have advantages, and market share is being taken; second, Bestore's heavy investment in offline channels has increased operating costs, leading to lower profits.
More notably, Bestore recently fell into a "ingredient label" fraud scandal. A blogger posted a video on social media claiming that "Bestore's product ingredient labels are fraudulent, sour and spicy noodles have no noodles, and lotus root starch is mixed with cassava starch."
On November 4, the Dongxihu District Market Supervision Administration in Wuhan said it had filed a case for investigation and would handle it according to laws and regulations. Bestore also issued a statement in response: Regarding recent reports by netizens about "ingredient label fraud" in its lotus root starch and sour and spicy noodles, preliminary checks showed that the relevant products passed multiple batch inspections this year by the company and its manufacturers, with all indicators qualified. Currently, local regulatory authorities have sampled and are investigating the company's related products.
**From the snack industry perspective, food safety remains a top priority.** Of course, competition in the snack industry will continue, and more snack stores may close in the future. But whoever consistently puts food safety first and provides high-quality, cost-effective snack products may occupy a favorable position in future competition.


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