Source: Retail Business Finance Wan Cheng In the 1990s, as a major commercial distribution hub in the Central Plains, Zhengzhou leveraged its advantages in convenient goods transportation to see the emergence of convenience store brands such as Silin Supermarket and Apollo Convenience Store, which originated from trading companies. After more than 30 years of development, the chain convenience store sector in Zhengzhou has now formed a pattern of tripartite competition among local chains (such as Yuelai Yuexi and Fulu Jia), leading domestic chains (such as Meiyijia and Tangjiu Convenience), and foreign chains (such as 7-ELEVEn Henan). The coverage density of convenience stores exceeds the national average, but it still faces deep challenges in regional competition and growth momentum. According to the "2024 China Urban Convenience Store Development Index" released by the China Chain Store & Franchise Association, in 2024, the number of people served per convenience store in Zhengzhou was 5,807 people per store (the lower the number, the higher the density). This figure is better than the national average (6,866 people per store) and close to the median of 40 surveyed cities (5,847 people per store). However, among the capital cities of the six central provinces (Wuhan, Hefei, Nanchang, Changsha, Taiyuan, and Zhengzhou), it ranks only fourth, behind Taiyuan (2,582 people per store), Wuhan (4,733 people per store), and Changsha (2,133 people per store). Moreover, compared with 2023, the number of people served per store increased by 328, indicating a trend of declining density. Figure: Population served per convenience store in various cities in 2024 From the perspective of brand landscape, local chain convenience store players in Zhengzhou seem to be "outwardly strong but inwardly weak." Many convenience store brands have opened stores in Zhengzhou, but the expansion capacity of local players is limited. For example, Yuelai Yuexi has only expanded to Jiangsu outside Henan Province; among the three major foreign brands, only 7-ELEVEn has entered Zhengzhou through a partnership with Sanquan. In terms of overall growth, the development of the chain convenience store sector in Zhengzhou is also under pressure. In 2024, the growth rate of the Zhengzhou convenience store development index was only 0.3%, a decrease of 4.25 percentage points from the previous year, and its ranking among the 40 surveyed cities dropped 16 places to 27th. What is worth exploring is: How should chain convenience store players in Zhengzhou "break the deadlock"? Can Zhengzhou become the next "City of Convenience Stores"? The Pain Point Is "Numerous but Not Strong" What level is the coverage of 5,807 people per store for chain convenience stores in Zhengzhou? Looking at data released by the China Chain Store & Franchise Association over the past five years, the highest coverage was in 2020, with 3,383 people per store. From 2021 to 2024, this figure stabilized between 5,000 and 6,000 people per store, showing a trend of declining density, reflecting a stage bottleneck in market expansion and growth. Figure: Coverage of convenience stores in Zhengzhou over the past five years It is worth noting that among the 14 surveyed cities with fewer than 4,000 people per store, Zhengzhou is not included. In contrast, Taiyuan, Shanxi, which is close to Zhengzhou, has a per capita coverage of 2,585 people per store, ranking third nationally. Taiyuan is more special because of the "alley warfare" competition between Tangjiu Convenience and Jinfu Convenience. However, compared with the capital cities of the six central provinces (Henan, Shanxi, Hunan, Hubei, Jiangxi, and Anhui), Zhengzhou's overall data for chain convenience stores is not advantageous. In fact, the six central provinces are geographically concentrated, and their per capita GDP differences are not large. Compared with the highly dense convenience store layouts in East and South China, the convenience store development ecology in the six central provinces is more similar and more worthy of comparison. According to 2024 data, among the capital cities of the six central provinces, Zhengzhou ranks fourth in per capita convenience store coverage, only higher than Nanchang, Jiangxi (9,906 people per store) and Hefei, Anhui (12,796 people per store). Additionally, looking at the changes from 2023 to 2024, among the capital cities of the six central provinces, only Wuhan saw an increase in chain convenience store density (4,733 people per store in 2024, a decrease of 2,738 people per store from 2023), while Zhengzhou had the third-highest decrease in density (5,807 people per store in 2024, an increase of 328 people per store from 2023), only better than Nanchang and Hefei. Figure: Convenience store coverage in capital cities of the six central provinces The gap in chain convenience store density may imply that there is still considerable room for growth in Zhengzhou's local convenience store ecosystem. In particular, Zhengzhou lacks a local chain convenience store brand with a thousand stores. According to the 2024 China Convenience Store Top 100 list released by the China Chain Store & Franchise Association, eight convenience store companies from Shandong were on the list, with total store numbers increasing from 4,005 in 2023 to 4,768 in 2024, an overall growth rate of 19%, more than double the national average growth rate. Specifically, in Qingdao, Shandong, the local Kehao Convenience Store increased its store count from 822 in 2023 to 1,113 in 2024, entering the "thousand-store club" while also ranking first among Shandong's listed companies with a growth rate of 35.4%. In contrast, Yuelai Yuexi was listed with 420 stores, ranking only 61st. In addition, two other convenience store brands from Henan were on the list: Jiayuan Convenience Store with 196 stores and Yishiduo with 129 stores, but these two brands mainly operate in other prefecture-level cities in Henan outside Zhengzhou. Source: China Chain Store & Franchise Association Another local convenience store brand in Zhengzhou, "Fulu Jia Convenience Store," is a brand under Mixue Bingcheng, which opened its first store in 2019, but currently has no plans for expansion outside the province, with more strategic resources focused on expanding its namesake craft beer brand. In summary, "numerous but not strong" may be the biggest pain point of Zhengzhou's chain convenience store ecosystem. Zhengzhou has a large number of convenience stores (in 2021, there were about 3,000 convenience stores) and many brands. According to 2024 data, the top three in the China Chain Convenience Store Top 100—Meiyijia, Yijie, and Kunlun Haoke—all have a presence in Zhengzhou, but the latter two rely on Sinopec and PetroChina stations that exist nationwide, and Meiyijia has a nationwide "broad net" layout with nearly 38,000 stores. Obviously, Zhengzhou is not particularly special in attracting chain convenience store brands; even though modern convenience stores have sprouted since the 1990s, the overall development is still in an early stage, and various chain brands are still deeply engaged in "alley warfare" and competing for the "Iron Throne" of the head. From Grabbing Locations to Competing on Supply Chains Although the overall ecosystem is "numerous but not strong," competition among chain convenience store brands in Zhengzhou is quite fierce. Yuelai Yuexi, established in Zhengzhou in 2019, has now expanded to surrounding cities such as Luoyang and Kaifeng, with annual sales exceeding 1 billion yuan. In October 2020, the first 7-ELEVEn store in Henan opened, with first-day sales exceeding 650,000 yuan, setting a new global single-day sales record for 7-ELEVEn. In addition, in 2021, Tangjiu Convenience entered Zhengzhou, considering it an important city for its "brand eastward expansion"; in 2024, Yijie Convenience Store's first online delivery store in Henan, "Yijie Quick Purchase," chose to land on Chengnan East Road in Zhengzhou. Figure: Yijie Quick Purchase As mentioned earlier, since there is no local convenience store "super-head" brand with more than a thousand stores in Zhengzhou, various brands can be said to be in "open-book" competition, fiercely competing on locations, supply chains, and service scenarios, which to some extent is also raising the overall level of Zhengzhou's convenience store ecosystem. In terms of "grabbing locations," compared with street-side locations with unstable foot traffic and many mom-and-pop stores, convenience stores in Zhengzhou are seizing consumption scenarios with more stable traffic and more concentrated choices, such as subway stations, railway stations, and core business districts. In December 2023, the convenience store brand "Bianli Dan" under the local retail group Dennis officially entered Metro Line 3's Orthopedic Hospital Station, Dongzhou Station, and Haichang Temple Station, making it the first chain convenience store brand in Zhengzhou to open "subway convenience stores." Figure: Bianli Dan store at Zhengzhou Metro Line 3 Moreover, looking at Zhengzhou's major public transportation venues, almost one chain convenience store brand occupies one area. For example, 7-ELEVEn's third store in Zhengzhou opened at Xinzheng Airport, and Fulu Jia Convenience Store also entered Zhengzhou East Railway Station shortly after its establishment. Figure: 7-ELEVEn store at Zhengzhou Xinzheng Airport From the pace of location layout, chain convenience store players in Zhengzhou are still deeply educating the market and cultivating consumption habits. In the future, they will increase market investment and innovate consumption scenarios, such as "24-hour operation," which is relatively rare in the northern market. According to statistics, due to weather and market factors, the proportion of convenience stores operating 24 hours a day in Zhengzhou is 39.13%, while Yuelai Yuexi insisted on 24-hour operation from its inception, which is conducive to activating the local "night economy" model. Moreover, in the core fresh food category of convenience stores, chain convenience stores in Zhengzhou leverage Henan's advantage as a major food province, using central kitchens and independent warehousing and logistics infrastructure to provide consumers with a rich selection of self-operated fresh food products. For example, Yuelai Yuexi has built its own central kitchen food base in Yuanyang County, Xinxiang City. Its rice balls, sushi, bento boxes, and steamed buns are all self-produced and self-sold. A relevant person in charge of Yuelai Yuexi once told the media that fresh food is the main source of profit for Yuelai Yuexi. Another example is 7-ELEVEn's cooperation with Sanquan Food, a local Henan company. Sanquan exclusively supplies fresh food products such as bento boxes, prepared noodles, rice balls, sushi, and sandwiches to 7-ELEVEn stores in Henan. Sanquan has been a fresh food supplier to 7-ELEVEn since 2017 and has customized nearly 50 fresh food products for 7-ELEVEn stores in Jiangsu. While deepening supply chains, chain convenience store brands in Zhengzhou are also cultivating local consumers' habit of "solving three meals a day at convenience stores," which is a shift from meeting needs to creating demand scenarios. 7-ELEVEn founder Toshifumi Suzuki once said: "Our real competitors are not other convenience store brands, but ever-changing customer needs." To adapt to refined and vertical consumer demands, convenience store players are not only competing on channel scale or a single novel product, but on "multi-dimensional retail technology." Ma Qian, head of Yuelai Yuexi, once said that from brand positioning, store development, procurement and product selection, differentiation setting, to supply chain integration, financial backend, and logistics systems, chain convenience stores will engage in a full-scale competition. From this perspective, chain convenience store brands in Zhengzhou still need to solidly practice their basic skills. Practicing "Basic Skills" Is the Way Out It should be clear that opening a convenience store also requires calculating a macroeconomic "big account." The coverage density of chain convenience stores and the cultivation of convenience store consumption habits are, to some extent, positively correlated with a city's economic size and consumption vitality. Still taking the capital cities of the six central provinces as an example, Zhengzhou's GDP in 2024 was 1,453.2 billion yuan, second only to Wuhan and Changsha; but its per capita GDP was 111,000 yuan, only higher than Taiyuan, ranking fifth. However, Zhengzhou has always attached great importance to the development of chain convenience stores. As early as 2021, the Henan Provincial Department of Commerce identified Zhengzhou as one of the first batch of key cities in Henan Province for the development of brand chain convenience stores, undertaking the key promotion and construction tasks for brand chain convenience stores. This means that Zhengzhou's chain convenience store ecosystem still has significant room for growth. Another major impact of economic factors on Zhengzhou's convenience store ecosystem is that the volume of local individual businesses is large enough. Most shops around schools and at the bottom of residential buildings are leased by individual operators to open vegetable stores, grocery stores, or breakfast shops. These mom-and-pop stores are also strong competitors for chain convenience stores. According to data from the Zhengzhou Municipal Market Supervision Administration in 2024, there are approximately 1.1607 million individual industrial and commercial households in Zhengzhou. Facing more intense "cross-industry" competition, local chain convenience store players in Zhengzhou still need to deeply expand their channel end and open stores as close to consumers as possible. Yang Zhi, head of 7-ELEVEn Henan, once said: "Wherever the young customer group that is wealthy, busy, and particular about life is, 7-ELEVEn should open stores there." Its first store in Zhengzhou is located in the core business district Guomao 360, and 7-ELEVEn Henan plans to open 500 stores in the province in the next ten years. Another major feature of Zhengzhou's consumer market is the large number of college students (many universities). 2024 data shows that the number of college students (including undergraduates and postgraduates) in Zhengzhou reached 1.46 million, second only to Guangzhou, ranking second nationally. As the younger generation, college students are more willing to accept new things. In the future, chain convenience stores in Zhengzhou can continue to refine location selection and operations, and deepen campus stores. For example, Fulu Jia Convenience Store's first store in Zhengzhou opened at Henan University of Economics and Law, and Yuelai Yuexi also has campus stores, such as the one at Henan Experimental Middle School. Figure: Yuelai Yuexi Franchising is also an effective means to expand the scale of convenience stores. This year, Yuelai Yuexi announced the opening of franchising, with models divided into full investment and joint investment. The former requires an actual investment of 250,000 yuan, with an income distribution ratio of 96% of sales gross profit; the latter requires an actual investment of 80,000 yuan, with an income distribution ratio of 85%. In addition, in terms of consumption habits, due to the existence of a large number of individual small stores, office workers have more alternatives for breakfast, drinks, and other consumption choices. This is also why Zhengzhou Metro only introduced chain convenience stores in 2023, and the current number and density are far less than Shanghai. Take a residential area in Zhongyuan District, Zhengzhou, for example. On a street less than 50 meters long, there are three breakfast shops and one breakfast stall, mainly selling steamed buns, pancakes, and spicy soup; there are also two comprehensive small supermarkets selling FMCG, daily necessities, and fresh produce. The diversion of breakfast shops from chain convenience stores will affect their profitability because the cooked food, fresh food, and other breakfast products sold in convenience stores have high gross margins. Relevant statistics show that the gross margin of fresh food products in domestic convenience stores is about 30%-33%, and some foreign convenience stores can achieve a gross margin of 35%. But consumers will also "vote with their feet." As the density of convenience stores increases, chain convenience store brands in Zhengzhou must continue to provide quality products with more price competitiveness. At present, the production of Yuelai Yuexi's central kitchen has formed a standardized process. A new product takes 13 weeks from concept to launch. On the channel side, there is a monthly product elimination rate of 5%-10%. Its cooperative central kitchen factory, Yuezhifeng, also provides supply chain customization services for companies such as Pangdonglai. The "2024 Convenience Store Industry Development Overview" by the China Chain Store & Franchise Association also pointed out that in 2025, convenience store companies will continue the digital transformation of store standardization and expansion of online business, and "continuously optimizing category structure" will replace "trying new store types" as one of the three new key tasks. Competition is still fierce, and the development path of Zhengzhou's convenience store ecosystem is bound to have more "good shows." To make consumers gradually get used to visiting convenience stores and to grow a local head brand with a thousand stores in Zhengzhou, it is not just a matter of one brand practicing basic skills; it requires scale effects and brand clustering. In this context, only by consolidating supply chain resilience and innovating consumption scenarios can Zhengzhou's chain convenience stores break through the "siege of mom-and-pop stores" and the squeeze of national brands.