---
title: "Why Are Young People Losing Interest in Near-Expiry Food?"
description: "Near-expiry food stores, once a hit among young consumers due to low prices and discounts, are now facing a shakeout as competition intensifies and consumer interest wanes. Brands are pivoting to private labels and membership models to survive, but the industry still lacks a dominant leader."
author: "王慧莹"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2022-08-28"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/why-are-young-people-losing-interest-in-near-expiry-food-9572f84f/"
markdown: "https://xinjignxiao.com/en/articles/why-are-young-people-losing-interest-in-near-expiry-food-9572f84f.md"
original_source: "https://mp.weixin.qq.com/s/WRrpSXappGQRGNQA2wJ0Lg"
translation: "https://xinjignxiao.com/zh/articles/%E5%B9%B4%E8%BD%BB%E4%BA%BA%E7%88%B1%E8%BF%87%E7%9A%84%E4%B8%B4%E6%9C%9F%E9%A3%9F%E5%93%81-%E4%B8%BA%E4%BB%80%E4%B9%88%E4%B8%8D%E9%A6%99%E4%BA%86-9572f84f.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/why-are-young-people-losing-interest-in-near-expiry-food-9572f84f/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# Why Are Young People Losing Interest in Near-Expiry Food?

> Near-expiry food stores, once a hit among young consumers due to low prices and discounts, are now facing a shakeout as competition intensifies and consumer interest wanes. Brands are pivoting to private labels and membership models to survive, but the industry still lacks a dominant leader.

********Click to read the original article for details********
**"Every time I go to the basement floor of a mall, I see many peers queuing to pay at near-expiry food stores." Guan Guan, born in the 1990s, still remembers her encounter with a near-expiry food store last year.**
This scene has become quite common. In the past two years, with the consumption downgrade brought by the pandemic, near-expiry food with "low prices and big discounts" has become a favorite among young people, and near-expiry food stores have sprung up like mushrooms.
A batch of discount stores such as HotMaxx, HiGet, and Prosperity Market have spread across shopping malls in major cities, embarking on a path of chain and brand expansion.
Capital also followed the trend. In June 2020, HotMaxx, which had just been founded, secured tens of millions of RMB in Series A funding from GSR Ventures, Cloud9 Capital, and Rìchū Capital. In addition, Sequoia Capital China and Plum Ventures invested in discount food brands like Zhekouniu and Aizhekou.
**In fact, in the trend of consumption downgrade, near-expiry food has become a huge windfall, and the first batch of players have already made a fortune.** But as more players flood in and competition intensifies, victory often belongs to the few.
Some have already fallen.
Recently, according to Investment World, the parent company of the discount store brand Prosperity Market, Shanghai Bengbengmiao Technology Co., Ltd., stated in a contract dispute lawsuit with a supplier this year that it was preparing to apply for bankruptcy because its business had stalled and it had no cash flow.
**This is the first case of a near-expiry food company collapsing, but it may not be the last; the industry's elimination round has just begun.**
As the heat of the consumer market fades, the problems of near-expiry food stores are also emerging one by one. Unstable supply sources and uneven food quality have been questioned by brands for a long time.
More importantly, consumers' enthusiasm for near-expiry food has a shelf life. Brands relying solely on low prices are far from enough, and players are also trying to tear off the near-expiry label.
**Of course, to retain consumers and improve profitability, players must compete on multiple fronts.**
**01** **A Player Goes Bankrupt, Industry Elimination Begins**
**Once hugely popular near-expiry food stores are undergoing a major industry reshuffle.**
Recently, according to Investment World, the discount retail brand Prosperity Market is facing a bankruptcy crisis. In 2020, riding the wave of the pandemic, Prosperity Market emerged, positioning itself as "Your Treasure Discount Store Nearby." At its opening, it was dubbed "China's Don Quijote."
At that time, the pandemic was recurring, and the consumer environment was not optimistic. The low-priced Prosperity Market was particularly popular, quickly opening more than 20 stores in just one year. **At the beginning of last year, Prosperity Market also received funding from Challenger Ventures.** Behind this financing, Tang Linsen, founder of Genki Forest, also brought a long-term cooperation with Genki Forest to Prosperity Market.
Prosperity Market adopted a franchise model, targeting female consumers aged 15-35. The stores combined discounts with "national trend" and had a strong anime style, making them popular check-in spots. Prosperity Market also spent a lot on marketing; founder Fan Zhifeng revealed that each store had about 40,000 RMB in monthly marketing expenses.
Image source: Prosperity Market WeChat official account
**But the market environment changes rapidly, and with more and more players in the near-expiry food track, fierce competition caused Prosperity Market to fall.**
Signs of crisis had appeared earlier. According to Jiemian News, Prosperity Market's 20 stores had been taken over by HotMaxx. Some Prosperity Market stores were not renamed, but the receipts showed the company as HotMaxx.
Prosperity Market founder Fan Zhifeng disclosed in a podcast that after running Prosperity Market for a year and a half, the stores had been taken over by HotMaxx, and the brand was handed over to investor Challenger Capital, while he returned to his old supply chain business.
From its peak to the bottom, Prosperity Market took only two years.
Although the bankruptcy story has just emerged, Prosperity Market has undoubtedly sounded an alarm for those in the near-expiry business. An elimination round is quietly underway, and industry problems have been brought to the table.
**The first issue is the source of goods, i.e., the supply chain.**
In fact, the supply chain in the food industry is inherently complex. A brand may have many distributors scattered across regions, making it difficult to integrate. Extending to near-expiry food, unlike the stable supply from regular suppliers, a batch of goods often changes hands multiple times, leading to unstable sourcing channels.
Hot-selling products are often in short supply, while unpopular products accumulate inventory, and ultimately, the stores and brands bear the consequences.
**More critically, near-expiry food is inherently close to its expiration date. If management is not strict, quality control is hard to guarantee.**
In the food industry, products in large supermarkets generally need to be removed from shelves if more than two-thirds of their shelf life has passed, while e-commerce warehouses cannot exceed one-third. Therefore, near-expiry products usually have a shelf life of 1-6 months. If it is less than one month, food quality and safety issues need attention.
**And this is precisely the time frame in which the near-expiry food industry operates.** In July this year, HotMaxx was fined 7,000 RMB for selling expired chocolate. At the same time, incidents of arbitrarily changing expiration dates, damaged packaging, and counterfeit products have repeatedly occurred in the industry.
Food labeled as near-expiry quickly becomes a hot potato.
In reality, most of the products that end up in near-expiry food stores are brands that cannot be sold in supermarkets, so price is the only driving force for consumers to enter these stores.
But low-priced, high-quality supply sources prefer to cooperate with large chain customers, making it difficult for many small near-expiry food merchants to obtain goods. According to All-Weather Tech, an industry insider said, "This is a 'fast in, fast out' industry. Whoever holds the goods bears the risks. This also makes warehouses more willing to cooperate with large chain discount stores."
**This also means that achieving scale effects is key to the development of near-expiry food stores, which intensifies industry competition and reshuffling.**
Compared with convenience stores and supermarkets, which meet rigid demand, the business of near-expiry food stores is not rigid or stable, and it may not accommodate so many players. The fall of Prosperity Market may just be a microcosm of the near-expiry food store industry.
The reshuffle of this internet-famous track has just begun.
**02** **Near-Expiry Food Was Only Popular for Two Years**
Han Yu is a regular at near-expiry food stores. Every time he passes by, he goes in to stock up. A small basket full costs only 100 RMB, which is a good deal. **But recently, Han Yu noticed a significant change: the variety of products in near-expiry food stores is decreasing. "Even if the staff promotes at the door, there are rarely as many people as before."**
Guan Guan even said bluntly, "Discount stores are cheap, but the food is really unpalatable."
The near-expiry food that young people once loved seems to have "gone out of style." Little did they know, this was a "tens of billions market" they had eaten into existence.
According to the "2020 China Near-Expiry Food Industry Market Analysis and Consumer Research Report" released by iiMedia Research, the total output value of China's snack industry exceeded 3 trillion RMB in 2020. Even if only 1% of inventory enters the near-expiry market, that would be a scale of 30 billion RMB.
Online, near-expiry food remains popular. Last year, Taobao and Science Popularization China released the "Near-Expiry Consumption Cold Knowledge Report," stating that 2.1 million people buy near-expiry food on Taobao every year, with nearly 10,000 related snack stores.
**On Douban, the "I Love Near-Expiry Food" group has 93,000 members, shouting the slogan "Enjoy undiscounted deliciousness at discounted prices."**
In recent years, with the pandemic impacting offline retail and consumers becoming more conscious of consumption downgrades, near-expiry food has become a "hot commodity."
The most prominent manifestation is the crazy influx of capital.
**According to incomplete statistics from Lianxian Insight, although near-expiry food brands such as HotMaxx, Prosperity Market, and Elephant Life were established one after another starting in 2016, their financing was mainly concentrated after the pandemic.**
Take HotMaxx as an example. It received four consecutive rounds of financing between 2019 and 2020, with amounts reaching tens of millions of RMB, backed by investment institutions such as GSR Ventures and 5Y Capital. With such halo, HotMaxx not only secured prime locations in business districts but also became a popular check-in spot for consumers, making it a first-tier player.
During this period, HiGet, Elephant Life, and Prosperity Market also successfully completed financing rounds.
At the same time, near-expiry food also benefited from favorable policies. In May 2019, the "Opinions of the Central Committee of the Communist Party of China and the State Council on Deepening Reform and Strengthening Food Safety Work" was issued, which strictly prohibited the resale of expired food, and to some extent, regulated the near-expiry food industry.
**The market frenzy also attracted giants to enter.**
In October 2021, Hema Fresh opened a fresh food outlet store in Shanghai, with products mainly being fresh perishables or near-expiry food; three months later, Suning opened its first discount supermarket in Ma'anshan, announcing plans to expand into Jiangsu, Zhejiang, and Shanghai, with a target of 100 stores in 2022.
**Unfortunately, the frenzy of near-expiry food stopped in the first half of this year. As the tide receded, the heat of near-expiry food also dissipated. Now, financing news in the industry is becoming rarer, players who cannot hold on are forced to leave, and those still at the table are actively seeking change.**
**03** **Low Prices Alone Are Not Enough**
The near-expiry food business is becoming increasingly difficult, and players are looking for new ways out.
**Fan Zhifeng, founder of Prosperity Market, once said: "If a near-expiry food store only sells near-expiry products, then it is the brand's sewer." In other words, for near-expiry food brands to develop long-term, relying solely on selling low-priced near-expiry food is far from enough.**
Refer to Dollar Tree, the largest near-expiry retailer in the United States, which has over 10,000 stores. Near-expiry products account for only 20% of the items in its stores, while the rest are private label products and exclusive products developed in cooperation with brand manufacturers.
It is not hard to understand the need to broaden the brand dimension. Near-expiry food itself has not yet captured consumer mindshare. As more players enter, once supply chain fluctuations cause price increases and the price advantage is lost, near-expiry food stores will fall into risk.
**Head brands seem to have realized this and are trying to tear off the near-expiry label.**
Image source: HotMaxx WeChat official account
Take HiGet as an example. Currently, HiGet has over 200 directly operated stores and opened a franchise model in June this year.
HiGet founder Zhang Qiang once introduced that the current product structure in stores is 70% food and 30% daily necessities. Among them, private label products account for 20%-30%.
Data shows that HiGet's parent company, Beijing Youpin Kuma Technology Co., Ltd., has registered trademarks for several food, daily necessities, and office supplies brands, including "Muqi Qiqi," "Qiang Xiaolu," "Yikou Le," "KASUREOO," "Chu Bensheng," and "Xiaoshi Wanxiang."
According to Bright Company, Zhang Qiang once said that HiGet's private label products mainly cover nuts, daily necessities (such as toothpicks, dental floss, napkins, and braised snacks), and plastic bags.
Zhang Qiang also revealed that the gross margin of HiGet's private label brands is about 42%. **Nowadays, "near-expiry" in near-expiry food stores is more of a traffic attraction tool, using low-priced products to attract consumers, who then come to the store to buy high-profit products like private labels, thereby achieving profitability.**
Another offline-focused player, HotMaxx, is also expanding its product sales channels. After joining Meituan and Ele.me, it is now starting to lay out on Taobao and mini-programs.
**Whether it is launching private labels or expanding sales channels, the intention of head players is the same: to form scale effects and gain bargaining power at the source.** Qi Xinyu, founding partner of Yunxin Capital, once said in an interview with Sina Technology that near-expiry is just an early entry point to establish the "good goods, cheap prices" mindset. As store scale expands, it is an inevitable trend for companies to expand categories and integrate upstream supply chains.
It is worth mentioning that some near-expiry food stores have coincidentally set their sights on membership systems.
HiGet has incubated a new brand, "Weightless Treasure," which is a membership-based warehouse discount store model. The first Weightless Treasure store opened in Beijing at the end of last year, covering an area of over 2,000 square meters, with nearly 6,000 SKUs, involving multiple categories such as fruits, internet-famous daily necessities, and imported fresh food, with an average transaction value of 60-100 RMB.
Image source: HiGet WeChat official account
Elephant Life has also launched a warehouse discount store brand, "Huimai Miao," and introduced a 9.9 RMB monthly card, 99 RMB annual card, and 139 RMB family card (including a main card and a supplementary card) at its original stores. Stores with monthly sales exceeding 360,000 RMB have membership card consumption accounting for 60%.
The membership card model aims to enhance consumer stickiness. HiGet founder Zhang Qiang revealed, "Currently, 20% of sales come from members, and the proportion of member sales overall remains at 20%-30%."
**In essence, near-expiry food stores are still a traffic business. Only with enough foot traffic can they support the turnover needs of the store.** Head players are now opening stores in densely populated business districts, while also improving turnover efficiency through refined operations.
From near-expiry food stores to brand discount stores, consumers need novelty, and near-expiry food stores are eager to tear off the "near-expiry" label. For price-sensitive consumers, low prices are still attractive, but this is a long-term battle. Players still need to work on supply chains and brand reputation.
During Japan's economic downturn, the near-expiry giant "Don Quijote" emerged, and in the United States, "Dollar Tree" appeared. As HiGet founder Zhang Qiang said, after economic downturns, discount giants will emerge in all countries, and China is no exception.
**But for the industry as a whole, it is still in a fragmented stage without a leader. It will take time to birth a true giant. And for brands, the prerequisite for reaching this goal is to survive.** (At the request of the interviewees, Guan Guan and Han Yu are pseudonyms.)
Source: Lianxian Insight (ID: lxinsight)
 **_-END-_**


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671