---
title: "Where Is the Future of China's Chain Retail?"
description: "The future of China's chain retail cannot rely solely on Pangdonglai; we need more and better Mingming Henmang, Haozhaizi, Baiguoyuan, and Guoquan. Traditional supermarkets are losing relevance, with new retail demand met by instant retail, convenience stores, and membership stores on one hand, and various vertical chain brands on the other. Leading players in bulk snack, maternal and child snack, fresh produce chain, and ingredient chain sectors have already entered the top 100 chain list. Next, hard discount and beauty chain segments may also see new stories."
author: "徐霁"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2024-06-26"
language: "en"
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---

# Where Is the Future of China's Chain Retail?

> The future of China's chain retail cannot rely solely on Pangdonglai; we need more and better Mingming Henmang, Haozhaizi, Baiguoyuan, and Guoquan. Traditional supermarkets are losing relevance, with new retail demand met by instant retail, convenience stores, and membership stores on one hand, and various vertical chain brands on the other. Leading players in bulk snack, maternal and child snack, fresh produce chain, and ingredient chain sectors have already entered the top 100 chain list. Next, hard discount and beauty chain segments may also see new stories.

Where is the future of China's chain retail? We cannot pin all hopes on Pangdonglai. We need more and better Mingming Henmang, Haozhaizi, Baiguoyuan, and Guoquan.
Traditional supermarkets are increasingly losing their presence. New retail demand is being met on one side by instant retail, convenience stores, and membership stores, and on the other by various vertical chain brands.
Leading players in bulk snack, maternal and child snack, fresh produce chain, and ingredient chain industries have begun to enter the top 100 chain list. Next, hard discount and beauty chain segments may also usher in their own new stories.
**Rise of Vertical Chain Retail**
The chain top 100 list over the past two decades finally saw its biggest change in 2023.
The top spot shifted from the super giant Suning to Walmart, marking the first time a foreign enterprise topped China's chain top 100. Hema entered the list for the first time in 2022 and last year became the store growth champion among the top 10. The unassuming Meiyijia climbed several places against the trend, breaking into the top 10. Foreign chains, after two rounds of retreat, were thought to be quiet, but surprisingly, relying on Walmart, Aeon, Lawson, 7-Eleven, etc., they became the most stable growth segment in the list.
Of course, the most noteworthy in the list is the rise of new forces in various vertical chain segments.
Mingming Henmang, formed by the merger of Liangpin Henmang and Zhao Yiming, entered the list for the first time, directly ranking 30th. Last year, its store count reached 7,000, up 159.3% year-on-year, and sales scale reached 23.865 billion yuan, up 196.1% year-on-year, making it the dual growth champion. Just a few days ago, its store count exceeded 10,000, ushering the bulk snack industry into the era of 10,000 stores.
Liangpin Henmang and Zhao Yiming are both young, founded in 2017 and 2019 in Changsha, Hunan, and Yichun, Jiangxi, respectively. The consumption downgrade trend in the K-shaped consumption divergence has propelled bulk snacks to rapid rise. Backed by capital, they raised the banner of affordability and, relying on a franchise model, expanded rapidly across the national market. The merger at the end of 2023 directly made them the industry leader, entering the China chain top 100 list at the fastest speed.
Maternal and child chain retail brand Haozhaizi (301078.SZ) ranked 37th in the 2023 chain top 100 list. In 2023, it had 1,160 stores and sales scale of 16.332 billion yuan.
In 1998, Wang Jianguo founded Five Star Appliance, becoming one of Suning's (002024.SZ) and Gome's most important competitors. From 2006 to 2009, Five Star Appliance was sold to Best Buy and later taken over by JD.com.
After exiting Five Star Appliance, Wang Jianguo took the more than one billion yuan he cashed out, gathered his old team, and founded Haozhaizi in 2009, and launched the B2B platform for lower-tier markets, Huitongda, in 2010.
In 2021, Haozhaizi went public on the A-share market. Huitongda attempted to list in Hong Kong but has not yet succeeded. In last year's chain top 100 list, JD Five Star Appliance ranked 25th, with 1,298 stores and sales scale of 28.968 billion yuan.
From this perspective, Wang Jianguo is truly the retail king who has cycled through cycles in the Chinese market.
Baiguoyuan (02411.HK), the leading fruit chain retailer, ranked 41st in the chain top 100 list last year with 6,093 stores and sales scale of 14.2 billion yuan. Its smaller peer Xianfeng Fruit ranked 70th with 2,290 stores and sales scale of nearly 6 billion yuan.
Qian Dama, often located next to them, has been under rumor pressure in recent years, but its ranking in the chain top 100 list remains strong. In 2023, it had 2,936 stores and sales scale of 13.728 billion yuan.
Although Guoquan Shihui's ranking in the list is not high, its strength should not be underestimated. It only started opening stores in 2017 and rose abruptly during the special three years. In 2023, its store count exceeded 10,000, reaching 10,307, with sales scale of 7.447 billion yuan.
**New Stories Yet to Be Verified**
The above new chain forces are all vertical retail players from bulk snack, maternal and child snack, fresh produce chain, and ingredient chain industries.
In the early days, chain supermarkets dominated the list, with a small number of department stores, and vertical formats were rare.
Later, vertical retail formats such as Suning, Gome (00493.HK), Macalline, and Easyhome (000785.SZ) rose and entered the top of the chain industry, mainly because they were the first to nationalize and increased market concentration through industrial mergers and acquisitions.
The path of Mingming Henmang, Haoxianglai, and other leading bulk snack brands is similar. In fact, before the merger of Liangpin Henmang and Zhao Yiming, the leader in the bulk snack industry was Haoxianglai. The latter also grew through industrial integration.
A-share listed company Wanchen Group (300972.SZ) successively acquired Lu Xiaocan, Haoxianglai, Laiyoupin, Yadi Yadi, etc., and unified them under the brand "Haoxianglai" in September 2023.
The market expects that mergers and acquisitions in the bulk snack industry will accelerate. Besides Mingming Henmang and Haoxianglai, the second tier of bulk snack includes Lingshou Youming, Lingshi Youxuan, Qiahuo Puzi, Ai Lingshi, Dai Yonghong, etc. Where will they go?
Generations of vertical chain players have partially replaced traditional formats such as chain supermarkets and department stores. What used to be bought in malls and supermarkets can now be solved with more professional solutions. Moreover, in many cases, vertical chains offer better products, lower prices, more accessible consumption scenarios, and stronger user stickiness.
However, vertical chain industries also face their own challenges that need to be overcome.
Bulk snacks are the hottest chain retail track in recent years, but behind the rapid expansion, the industry's characteristics are clear: aggressive expansion, ultra-thin profits, and intense competition. As store layouts become denser, terminal sales will inevitably be affected. How to balance the interests of brands, franchisees, and suppliers is a problem that must be solved.
Fresh produce retail looks beautiful, but this high-loss, low-margin business is hard to make money. Baiguoyuan and Qian Dama rose through franchising but also have to bear the pain of food safety risks.
Haozhaizi acquired Leyou last year, with store count growing 128.3%, but sales scale only grew 7.8%. No amount of explanation helps; the core reason is declining operational efficiency.
For Haozhaizi, the short-term pain is the same as traditional chain supermarkets; the long-term pain is the shrinking potential customer base. At this stage, the value of expanding scale is far less than deepening business.
Guoquan (02517.HK) faces similar challenges. According to the chain top 100 list, Guoquan's store count increased 8.4% to 10,307, but sales scale was 7.447 billion yuan, down 34.4% year-on-year.
During the special years, hotpot lovers found comfort in Guoquan. But when the catering market returns to normal, how much room is there for this supplementary demand? Can expanding to non-hotpot scenarios like barbecue solve Guoquan's operational efficiency problem?
Only by solving their own problems one by one can vertical chain retail players gain stable development space and remain in this barometer of the chain retail market.
China's retail market is huge. Data shows that in 2023, total retail sales of consumer goods exceeded 47 trillion yuan. Among this, generations of great enterprises have been born. Retailers also face endless competition, always, as the saying goes, "the waves behind drive on those before."
Besides old formats like supermarkets, department stores, and convenience stores, new forces like bulk snacks, maternal and child snacks, fresh produce chains, and ingredient chains are constantly opening up new opportunities.
The Chinese market lacks its own hard discount leader. Among Leerle, Haotemai, Haitigou, Biyide, Tiaoma, Jinbaibai, Zhekouniu, Aotele, Xunwushe, and Duoletun, who will break out first? Perhaps a similar story has already happened in bulk snacks.
Beauty chains are also a relatively blue ocean market. Who will step up to publicly challenge the slightly aging Watsons?
**What other new opportunities in chain retail exist in such segments?**
**From August 20-22, 2024, the "2024 6th China FMCG Conference" with the theme "Crossing the Shrinking Era" and the "3rd China FMCG Hard Discount Conference" & "3rd China FMCG Distributor Conference" will be held grandly in Shanghai.** At this conference, all roles in the FMCG industry chain will gather, allowing you to grasp industry trends at a glance, understand hot track indicators, penetrate industry resources, and precisely connect with leading brand owners, head retail platforms, and national excellent distributors with over 100 million in sales, providing you with precise decision-making, efficient cooperation opportunities, and on-site learning of exclusive methodologies from FMCG giants! Keynote speeches, roundtable dialogues, report interpretations, closed-door salons, and networking dinners—this thousand-person event has something for you!
**🔺Scan code for ticket consultation🔺********Recommended Reading********


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