---
title: "Will Convenience Stores Completely Replace Mom-and-Pop Shops?"
description: "In everyone's memory, there may be a small shop at a street corner or alley near home, accompanying us as we grow up. But in recent years, these small shops have become fewer and less prosperous. Many chain convenience stores have appeared on the streets. According to the experience of developed countries, when per capita GDP exceeds $10,000, convenience stores begin to grow explosively. China has now reached this critical point, and convenience stores will radiate from large cities like Shanghai and Shenzhen to the whole country."
author: "江瀚"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-04-29"
language: "en"
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---

# Will Convenience Stores Completely Replace Mom-and-Pop Shops?

> In everyone's memory, there may be a small shop at a street corner or alley near home, accompanying us as we grow up. But in recent years, these small shops have become fewer and less prosperous. Many chain convenience stores have appeared on the streets. According to the experience of developed countries, when per capita GDP exceeds $10,000, convenience stores begin to grow explosively. China has now reached this critical point, and convenience stores will radiate from large cities like Shanghai and Shenzhen to the whole country.

In everyone's memory, there may be a small shop at a street corner or alley near home, accompanying us as we grow up. But in recent years, these small shops have become fewer and less prosperous. Many chain convenience stores have appeared on the streets. According to the experience of developed countries, when per capita GDP exceeds $10,000, convenience stores begin to grow explosively. China has now reached this critical point, and convenience stores will radiate from large cities like Shanghai and Shenzhen to the whole country.

A convenience store is a physical store located near residential areas, focusing on selling immediate goods or services, with the primary goal of meeting convenience needs, and adopting a self-service shopping method as a small retail store.

The rise of convenience stores originated from the large-scale and suburbanization of supermarkets, first appearing in the United States. In the U.S., large supermarkets like Walmart are usually built in suburbs, requiring driving. Therefore, nearby small retail formats are needed to supplement and facilitate residents' lives.

As of the end of 2017, according to the number of convenience stores, the top 20 convenience store enterprises in China are shown in the table below. Sinopec Easy Joy, PetroChina Kunlun Haoke, and Meiyijia lead far ahead in store count. Among foreign brands, FamilyMart has 2,181 stores, 7-Eleven has 1,644 stores, and Lawson has 1,399 stores.

From the logic of the entire market, it is an inevitable trend for convenience stores to replace mom-and-pop shops. Why do we say this? The mom-and-pop shops we are familiar with are usually located inside residential communities or at the ends of small streets and alleys, privately run in the form of husband-and-wife stores. These shops can be said to be the smallest component of our daily life ecosystem. However, because they are deeply embedded in our daily living communities, these shops often play a very important role in our daily lives.

However, in the era of convenience stores, the problems of these small mom-and-pop shops are very serious.

**First, the cost of storefronts makes it difficult to form a true cost advantage.**

In economics, there is a very clear concept called **economies of scale.** When you make something bigger, when you form economies of scale, your marginal cost decreases. Through this decreasing marginal cost, you can use a very large volume to sell at a very low cost. But small mom-and-pop shops often do not have this advantage; they purchase individually and are individual entities. Their market bargaining power is very weak, and this extremely weak bargaining power makes it difficult for the prices of goods in small shops to achieve the price advantage of convenience stores. Their product categories also struggle to reach the average level of convenience stores.

**Second, the rise in storefront costs.**

Unlike convenience stores, which are chain-operated, these small shops are often husband-and-wife stores. Their profitability is relatively limited. But now, with the continuous rise in commercial real estate prices and increasing rent costs, these small shops inevitably face the pressure of rapidly rising rents.

**Third, relatively backward business concepts.**

The mom-and-pop shop is centered on a husband-and-wife store business concept, which is completely different from chain convenience store operations. This relatively backward management method also determines that its profit level is relatively low.

**Fourth, limited business hours.**

These husband-and-wife shops often open around 7 or 8 in the morning and close around 9 or 10 at night. But in reality, most convenience stores now operate 24 hours a day. Under such circumstances, the disadvantage in operating hours becomes apparent.

Looking back at convenience stores, China's convenience stores have formed a sweeping trend. Various convenience stores are rapidly spreading in first- and second-tier cities, and even in third- and fourth-tier cities, local chain convenience stores are emerging. **Chain convenience stores use unified management and unified purchasing to form economies of scale, and through cooperation with the internet, they begin to create many new retail plays.** They also accumulate large amounts of user data for user analysis. Through this **combination of new retail and traditional convenience store chains**, new-type convenience stores have developed rapidly and formed a comprehensive spread.

Under such circumstances, convenience stores in hot first- and second-tier cities have begun to fully replace daily mom-and-pop shops. In third- and fourth-tier cities, convenience stores are also rapidly appearing, while daily mom-and-pop shops actually have two very special trends.

**First, comprehensive incorporation.** Internet giants represented by JD.com and Alibaba have begun to fully incorporate daily mom-and-pop shops. These shops, uniformly operated by internet institutions, will gradually acquire certain characteristics of convenience stores.

**Second, the full conversion of mom-and-pop shops into convenience stores.** Some convenience stores adopt a franchise model to incorporate daily mom-and-pop shops. In a sense, some more proactive shop owners have also transformed their shops into convenience stores.

This trend of mutual integration has formed and will become a common feature of the last mile of China's new retail.

Source: Jianghan's Vision (Qianlong)

Tips will be paid 400-2000 yuan once adopted.

**China FMCG + Internet Professional New Media**
**Committed to FMCG manufacturer transformation and channel digital solutions**


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