** Convenience stores are the essence of everyday life** When cooking and running out of oil, salt, soy sauce, or vinegar, you can just go downstairs to buy them; when tired from an evening walk, you can turn a corner to grab a bottle of water; when hungry late at night, you can immediately get a sandwich. But a lesser-known fact is that the top three cities in China's urban convenience store development index are not first-tier cities. △ A convenience store inside the Xiamen International Conference and Exhibition Center sells various hot foods. Photo courtesy of China Chain Store & Franchise Association. In September this year, the China Chain Store & Franchise Association released the "2022 China Urban Convenience Store Development Index," with Xiamen, Taiyuan, and Dongguan ranking in the top three. Notably, Xiamen has been at the top of the index for three consecutive years. Since 2014, the association has published the index for eight consecutive years, and in the past four years, Xiamen, Taiyuan, and Dongguan have consistently appeared in the top five. In this consumer sector, first-tier cities have fallen behind, while new first-tier and second-tier cities have risen. Why is this happening? The up-and-comers beat the incumbents Xiamen has many arcaded buildings, mostly in the old city area of Siming District. As the starting point of the city's development, Xiamen's Siming District is similar to Beijing's Dongcheng and Xicheng districts, Shanghai's Bund, Guangzhou's Yuexiu and Liwan districts, and Shenzhen's Luohu. It is also where convenience stores are concentrated. Not only are there local Jianfu convenience stores, but also international brands like Lawson. A reporter from Times Weekly randomly walked into a Jianfu store and found, besides room-temperature products, fresh food, and coffee, a multi-functional government service machine offering services such as social security, residence permits, public security, housing provident fund, transportation, notarization, credit reports, and real estate registration inquiries. Photo by Chen Xionghai of a government service machine in a Xiamen convenience store. The China Urban Convenience Store Development Index shows Xiamen ranking first for three consecutive years. But this does not mean Xiamen's convenience store sector is mature. "The index mainly involves four indicators: growth rate, saturation, 24-hour ratio, and business environment. Xiamen's top ranking for three years is mainly due to its high growth rate and rapid store expansion in recent years," Wang Hongtao, executive deputy secretary-general of the China Chain Store & Franchise Association, told Times Weekly. Data shows Xiamen's convenience store growth rate has ranked first for two consecutive years, with rates of 21.02%, 10.34%, and 7.14% from 2020 to 2022. In contrast, cities with more mature convenience store sectors like Guangzhou, Shenzhen, Dongguan, and Taiyuan have maintained lower growth rates, around 2% in 2022. In 2017, Xiamen had one convenience store per 5,045 people (source: 2017 China Urban Convenience Store Index), far below Dongguan's one per thousand. At that time, netizens on Zhihu even asked: Why haven't FamilyMart, Lawson, and 7-Eleven opened stores in Xiamen? △ Convenience stores have become frequent places for people to shop. Image source: Tuchong Creative. Just five years later, these convenience stores have all appeared in Xiamen. At the 2022 China Convenience Store Conference, a representative from Xiamen Municipal Commerce Bureau introduced that Xiamen has over 2,260 branded chain convenience stores, including well-known companies like Meiyijia, 7-Eleven, and Lawson, as well as the local enterprise Jianfu, showing diversified development. Compared with Xiamen, Taiyuan and Dongguan started earlier and are considered established convenience store cities. Both cities have long been in the top five of the development index and also rank high in saturation. For example, in the 2022 list, Dongguan ranked first with 2,052 people per store, and Taiyuan third with 2,587 people per store. In the past four years, Dongguan and Taiyuan have consistently been in the top three for saturation. Despite years of development, Xiamen's saturation in 2022 was lower than these two cities, at 3,227 people per store, ranking fifth. The 'urban genes' behind convenience stores Many first-time visitors to Taiyuan notice that international brands like 7-Eleven and FamilyMart are absent, and the streets are filled with local Taiyuan convenience stores—Tangjiu and Jinfu—with one every 300 to 500 meters. On Qingnian Road, only 1.6 kilometers long, there are five Tangjiu stores. Taiyuan can be considered an oasis for convenience stores in the north, with high saturation and brand concentration. In Wang Hongtao's view, Taiyuan's convenience store development is mainly due to the early start of the sector, which "educated" consumers and cultivated their consumption habits. Public information shows that in the late 1990s, a group of retailers with Shanxi merchant genes transformed into local businesses. In 1998, Tangjiu founder Yang Wenbin visited Japan and was impressed by the scene of finding convenience stores anywhere and buying needed products and services, so he introduced the format to Shanxi. Soon, the first Tangjiu store opened on Yifenyuan in Taiyuan. Learning from Japanese convenience store models, besides selling daily necessities, it was the first to offer 24-hour service, set up refrigerated cabinets for yogurt, and use rice cookers to sell hot foods like corn and tea eggs. A 24-hour convenience store in Pingyao County, Shanxi, sells fresh food like buns and sandwiches. Photo by Chen Xionghai. "After nearly 30 years of development, the two companies have created a situation of high density, high quality, and good service, giving consumers a clear understanding of the convenience store format, which also puts Taiyuan at the forefront of the index," Wang Hongtao said. He believes that northern cities face three unfavorable factors for convenience store development: long winters mean only "half a year of business," wide roads with medians mean only "half a street of business," and underdeveloped nighttime consumption means only "half a day of business." Taiyuan's success among northern cities is somewhat accidental. Compared with Taiyuan, Wang Hongtao believes Dongguan's convenience stores are deeply rooted in Guangdong's "small shop (store) culture," whereas northern cities historically had large department stores as the main commercial format. In terms of development logic, Taiyuan's convenience stores are top-down, cultivating consumer habits; Dongguan's are bottom-up, upgrading the lower-tier market. Dongguan has many industrial parks, and Meiyijia and Tianfu convenience stores are closely associated with these parks. At the entrance of convenience stores, you often see two or three tables and chairs placed by the owner, directly derived from Guangdong's "sit at the store" culture, meeting the low-cost leisure and social needs of industrial workers. Sitting at the entrance drinking beer and eating melon seeds, they can stay for one or two hours. Photo of tables and chairs placed by the store owner at a convenience store entrance. Source: Xiaohongshu. Tianfu Convenience Store Chairman Ouyang Huajin told Times Weekly that in the early stages, compared with ordinary mom-and-pop stores, Tianfu had better refrigeration and freezing conditions, and supply chain and manufacturer support effectively reduced procurement costs, gradually replacing the market of individual grocery stores. Ouyang Huajin said convenience stores are a fast-paced consumption venue, originating from rapid urban economic development; the more migrant population, the better convenience stores develop. Zhang Li, chairman of Jianfu Convenience Store, shares the same view. He told Times Weekly that Xiamen's convenience store development is inseparable from the influence of the migrant population. "Taiwan has a developed convenience store sector. In Xiamen, there are many Taiwanese people, which is also the social foundation for convenience store development." Leading enterprises shape the convenience store city "For convenience stores to fully develop, there needs to be a local enterprise to 'take the lead.' The relationship between local leading enterprises and their cities is like 'seed' and 'soil,' complementary; only when both conditions are met can convenience stores flourish," Zhang Li said. A clear phenomenon is that Xiamen, Taiyuan, and Dongguan all have local leading convenience store enterprises: Xiamen has Jianfu, Taiyuan has Tangjiu and Jinfu, and Dongguan has Meiyijia and Tianfu. In the 2021 China Convenience Store TOP100 list, Meiyijia and Tianfu ranked 2nd and 4th, Jianfu 12th, and Tangjiu and Jinfu 14th and 19th. The leading enterprises in these convenience store cities contribute significantly. Zhang Li analyzed that the development of convenience store cities is a combination of contingency and inevitability, and also requires seizing historical opportunities. Taiyuan's Tangjiu and Dongguan's Meiyijia both transformed from state-owned enterprises; without these two companies, Taiyuan and Dongguan would not have their positions in the convenience store field. △ Convenience stores warm many people's stomachs. Image source: Tuchong Creative. He also frankly stated that cities like Shanghai and Guangzhou do not lack the soil for convenience store development; what they lack is a good "seed." From the perspective of "soil," Zhang Li believes Xiamen's rapid convenience store development is closely related to the local business environment, including policy support from the local government. Xiamen has not only written the promotion of convenience store development into government reports but also provided financial support from logistics to store opening. In recent years, Xiamen has issued the "Implementation Plan for Promoting the Development of Branded Chain Convenience Stores in Xiamen" and policies to promote retail growth, promoting the branding, chaining, and intelligent development of convenience stores by expanding development space, simplifying licensing procedures, and optimizing food operation permit conditions, with financial support for building logistics distribution centers, expanding chain operation scale, and strengthening supply chain capabilities. Taiyuan also drafted the "Implementation Plan for Promoting High-Quality Development of Chain Retail" in 2021, providing financial rewards for brand chain retail enterprises that file for franchise, in three aspects: optimizing urban service outlets, extending chain brands to rural areas, and transforming old and new retail momentum. In the business environment indicator of the 2022 China Urban Convenience Store Development Index, Taiyuan and Xiamen were rated as "good," and Dongguan as "fair." Wang Hongtao said that local leading convenience store enterprises help consumers form a clear understanding of the chain concept and also influence local government policy orientation. Out of consideration for serving consumers, local governments tend to support local leading convenience store enterprises. "As an extension of convenience store services, Xiamen allows local convenience store enterprises to operate roadside breakfast carts, and Taiyuan lets local convenience store enterprises actively participate in pandemic supply assurance. In contrast, convenience store competition in first-tier cities like Shanghai and Guangzhou is more market-oriented, while local brands in these cities hold absolute advantages." Convenience store cities and local leading enterprises achieve mutual success, and these enterprises also carry the distinct characteristics of their cities. Meiyijia and Tianfu, originating from Dongguan, have 26,168 and 6,626 stores nationwide (data from 2021 China Convenience Store TOP100), second only to oil company convenience stores, surpassing international brands like Lawson, FamilyMart, and 7-Eleven, and far exceeding local brands like Jianfu, Tangjiu, and Jinfu. This is closely related to Dongguan's manufacturing-based industrial structure. "Convenience stores in Xiamen and Taiyuan are mostly concentrated in urban areas, with a smaller scope; although local density is high, the total number is limited. In contrast, Dongguan's convenience stores are widely distributed at the town and village level, serving industrial workers, with a broader scope. This also makes us pay more attention to a down-market strategy when opening stores, going to towns in eastern, western, and northern Guangdong," Ouyang Huajin said. Although township convenience stores are not as high-end as international brands, compared with local small shops, they can be called "fashion stores." △ Meiyijia Chairman Zhang Guoheng introduced that China has a complex, diverse, and vast market, and CBD commercial area consumption demand is only a small part. In response, Zhang Guoheng said, "Choose what kind of consumers, open what kind of stores. China is vast, with rich personal consumption, family consumption, and CBD consumption scenarios. Meiyijia follows a full-market, full-store-type development strategy, creating fresh food stores, community stores, theme stores, and life stores, covering from CBD to communities and villages." This phenomenon is also reflected in Xiamen. A Times Weekly reporter found that the same brand convenience store in Siming District (on the island, with more tourists) sells fresh food and coffee, while in Jimei District (outside the island), it only sells standardized industrial products. Similarly, Meiyijia and Tianfu in Dongguan decide whether to sell fresh food, coffee, and other hot foods based on whether the store is in a CBD or at the town/village level. "Going down-market has benefits, but it also solidifies consumers' brand perception. For example, if you want to buy a sandwich or rice ball, you wouldn't go to Tianfu, so we also plan to launch a higher-end sub-brand," Ouyang Huajin said.