Source | Lingshou
In 2025, China's snack industry presents a strange scene: Stores are opening more and more, but growth is slowing down, prices are getting more competitive, and consumer demands are becoming more diverse.
When Zhang Yuhai, founder of Qihuo Street, stood on the stage, the audience was filled with retail entrepreneurs from across the country. His first sentence in the official speech was: "We are fortunate to still be alive."
This statement is not only candid but also feels like a reality with warmth.
Nine years ago, Qihuo Street started from Anhui, focusing on the snack track. Today, it remains one of the few brands nationwide that adhere to a high-quality route, survive fierce competition, and achieve good development.
Zhang Yuhai's speech was more like a genuine review of the snack industry by someone who has fought hard in the storm. Qihuo Street has also broken through the involution through model innovation, found an upward path, and built a trust barrier with quality differentiation.
The Essence of Involution
For me personally, in the past two years, only two words have left the deepest impression.
The first word is "alive."
I am glad we are still alive. In today's environment, being able to survive is the only reason we can breathe a sigh of relief.
The second word is "involution."
In the past two years, the entire retail industry has been very competitive, especially the snack industry, where involution is becoming increasingly severe.
What exactly is the involution about? It's about talent, resources, innovation, efficiency, price... To what extent has it escalated?
In the snack industry, my feelings may not be entirely accurate, but they are the most genuine. The leading snack companies are already fighting fiercely, like "if you don't make things easy for me, I won't make things easy for you," all striving to be number one.
Mid-tier snack companies are also struggling and anxious. Because there hasn't been much innovation, they are mostly imitating. So when leading snack companies compete alongside you, you basically have no breathing space and are under constant pressure.
As for the tail-end companies, they are being flipped by competition, discounted, and abandoned by consumers, gradually being eliminated by the environment.
From our perspective, what snack companies are doing—whether competing for resources, innovation, teams, or value—seems correct.
But fundamentally, what are they really doing? We thought for a long time and concluded that the essence of involution is competing for the "trust relationship between merchants/brands and consumers."
What is a trust relationship? It means that through our efforts, or through various methods, tactics, and even strategies, we can make consumers believe in us, continue to patronize our brand, and make our business better.
In other words, if consumers no longer trust you, nothing you do will work; if they trust you, they will come even without advertising.
The Industry Is Differentiating
Looking at the current market environment, China's retail industry faces significant challenges, but there is also clear differentiation: some companies are declining, while others are growing against the trend.
In the ordinary camp—most traditional retailers are similar, currently experiencing declining performance, shrinking customer traffic, reduced loyalty, fewer store openings, more closures, and operational difficulties; but in the high-trust camp, such as Pangdonglai, Sam's Club, Aldi, and Hema, customer traffic is booming, performance is growing against the trend, and user loyalty is extremely strong.
Why this differentiation? Because consumers' trust relationships have been redistributed.
Consumers have given their trust to brands that have long adhered to quality, value, and service.
So our conclusion is: all efforts of a company should revolve around "building consumer trust."
In the past two years, the industry has been discussing "adjustment and reform," but few have truly succeeded. Why? I summarize three points:
First, changing consumer perception is extremely difficult.
Consumers come because they think you are good; but if their perception has become "you are not good," it is very hard to make them trust you again with one adjustment.
Once perception is formed, it can become the biggest obstacle for a brand.
Second, using old models to load new content is very difficult.
The previous store area, SKU count, and spatial structure were designed for the old model. If you want to add more categories and high-frequency products, it may not fit or be correct.
Thus—the adjustments you make are not what consumers want.
Third, most adjustments are based on an "internal perspective" rather than a "consumer perspective."
Many companies rely on internal data to build adjustment models, but this data is based on the results of consumers being "forced to choose" under the old model.
This data can sometimes mislead you. It may not reflect consumers' true needs, only that they "could only consume this way," so many adjustments go astray.
True Innovation: Not Creating Concepts, But Fast, Low-Cost, Continuous Trial and Error
We believe that innovation has been described as too "great" in the past. Later, I heard an expert say something that enlightened me: Innovation is not greatness; it is daily. If you achieve three things—not deviating from market laws, not deviating from corporate strategy, and conducting small-cost trials and rapid iteration every day—innovation will naturally occur.
Many seemingly "impressive" innovations ultimately fail; instead, ordinary and unremarkable attempts often truly move consumers.
Our future innovation strategy is: fast, low-cost, continuous trial and error, and following market logic.
Given the market environment, we have mainly done four things in the past two years.
First, focus on physical stores and food.
We have always insisted on one thing: we only do food, and only sell safe food for our families to eat.
Food is our root and our capability. We hope to establish "Qihuo Street = high-quality food" in consumers' minds.
Over the past nine years, we have never compromised on the quality bottom line. No matter how others lower prices or promote, we adhere to the quality line. This is the fundamental reason we have survived fierce competition.
Second, upgrade the food structure: fresh, clean, and good ingredients.
Since last year, we have redefined food with three standards:
Fresh and short shelf life—the fresher, the safer and healthier; Clean ingredient lists—add as little as possible, reduce additives, and make truly clean snacks; Good ingredients and good quality—in the era of cost-effectiveness, use good ingredients to make consumers feel "value for money."
We summarize this in three words: excellence, detail quality, and good quality.
Third, introduce high-frequency, strongly related categories to increase repurchase and average order value.
Around the core of "snacks," we have added freshly baked bread, premium fruits, cooked food (on-site processing), light meals, children's food, and healthy food. These categories have high frequency, rigid demand, and high overlap with snack consumers.
They bring higher repurchase rates, higher average orders, and more stable customer loyalty.
Fourth, add value through service; service must match quality.
Products are fundamental, but service is a bonus. In recent months, we have focused on service, and the results are clear: areas with good service see a noticeable increase in performance.
Only when service matches quality can a true trust loop be formed.
No matter how the future changes, no matter how we innovate or expand categories, one thing remains unchanged: we only sell safe food to our families, and also to the families of our franchisees.
Quality is the bottom line; trust is the goal.