---
title: "Xinjiayi: 2% Private Label Products Generate 10% of Sales"
description: "Xinjiayi, a convenience store chain founded in Changsha in 2007, has entered a phase of rapid growth, expanding from its Hunan base to Jiangxi and Hubei. Despite private label products accounting for only 2% of SKUs, they contribute over 10% of sales, driven by a focus on quality and value."
author: "任文青Andy"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2025-02-18"
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# Xinjiayi: 2% Private Label Products Generate 10% of Sales

> Xinjiayi, a convenience store chain founded in Changsha in 2007, has entered a phase of rapid growth, expanding from its Hunan base to Jiangxi and Hubei. Despite private label products accounting for only 2% of SKUs, they contribute over 10% of sales, driven by a focus on quality and value.

"Whether it's called a convenience store or not doesn't matter; we're just selling goods. The core is: what customers do we serve, and in what way?" Xinjiayi founder Wu Minyi told me. Founded in Changsha in 2007, Xinjiayi has entered a phase of rapid development in recent years, with Hunan as its base and expansion into Jiangxi, Hubei, and other provinces. In 2024, the number of stores was around 1,100, and it is expected to reach 1,700 by 2025. In terms of absolute store count, Xinjiayi's growth seems unremarkable. However, as a local convenience store brand, Xinjiayi's store performance in the Hunan market far exceeds that of Japanese convenience store chains like 711 and Lawson, and it has already become the largest fresh food convenience store brand in Central China. More importantly, the past two years have also been a period of vigorous development for discount retail. Located in Changsha, the heartland of discount retail, Xinjiayi has not only avoided setbacks but has won consumer support through its unique product advantages. It is reported that in 2024, Xinjiayi achieved a year-on-year growth of 40%-50%, and growth is expected to be even faster in 2025! How did Xinjiayi achieve this? What inspiration does its development offer to the industry? Recently, I had an in-depth exchange with Xinjiayi founder Wu Minyi. Wu not only shared Xinjiayi's business philosophy but also elaborated on his deep thoughts on retail, current industry changes, and development opportunities. Next, I plan to share the "core content" of our exchange with you through an article.
#### **"Whether it's called a convenience store or not doesn't matter"**
In recent years, snack discount stores have developed rapidly, and the business of many regional convenience stores has been affected. Xinjiayi, located at the center of discount retail, has instead entered a period of rapid growth. I understand that many peers make special trips to study Xinjiayi. I'm particularly curious: what exactly has Xinjiayi done right? How do you position yourselves in the market? At the beginning of our exchange, I raised my questions. "Actually, we don't like to call ourselves a convenience store, or rather, the name doesn't matter," Wu told me. "**We're just selling goods. The core is: what customers do we serve, and through what methods?** When we started, we copied homework, like 711 and Lawson, but eventually found that what we copied was all cost. For example, **in China, many convenience stores follow Japanese practices, requiring items like oden and rice balls. But such products may have demand in first- and second-tier office buildings, yet they are not suitable in many regions.** Take Hunan, for instance: this market consumes tens of billions of yuan in spicy snacks, over 10 billion yuan in milk, and several billion yuan in beer each year. Compared to oden, shouldn't you focus on doing these products well? We thought that customers mainly come to the store to buy food and drinks. After a long period of exploration, Xinjiayi gradually built advantageous categories with warmth, focusing on elements like cold, hot, and addictive. For example, fresh milk: our 500ml fresh milk is priced at 4.9 yuan, with a repurchase rate exceeding 40%. Xinjiayi's fresh milk sales account for over 20% of the Hunan market channel share.
For example, fresh beer: 3.9 yuan per jin (500g), selling over 100,000 bottles a week. Another example: freshly ground coffee, 4.9 yuan per cup, with excellent taste. Now we sell tens of thousands of cups a day, with annual sales exceeding 100 million yuan! Traditional convenience stores mainly meet immediate needs with smaller packaging. In addition to this, we also consider family life needs and the needs of manual laborers, so we also have large-format products, such as 5L Nongfu Spring water, 6-pack tissue, and 1kg ice cubes. You ask how we define ourselves? We don't tell stories; we just serve customers well and provide what they need. If you confine yourself to the framework of a convenience store, it's hard to innovate and find what you should do well. **Doing a good job as a high-cost-performance retail store in small cities, clearly thinking about who you serve and how you serve them—that's the essence.**
#### **"Make products good, sell at good prices"**
I see many private label products in Xinjiayi stores. I understand that many peers also regard Xinjiayi as a learning model in this area. The retail industry is now focusing on private brand development. Could Wu share Xinjiayi's practices and thoughts on this? "The overall market is declining, and what's declining is the standard products of brand manufacturers. If you only sell standard products, you can cut prices, but so can others. So private label products are very important," Wu said. "**Retail enterprises doing private brands don't need people who understand brands; they need people who truly understand products.** Make products good, sell at good prices—that's enough. For example, our private label fresh milk and fresh beer sell well, simply by controlling quality well and making prices affordable. In today's terms, it's quality-price ratio. How much is raw milk per jin? How much is coffee beans per gram? Then packaging industrial products, like paper cups, how much per gram? Break it down to the smallest molecule; these costs can be calculated. Then set a reasonable profit and sell at a good price. This doesn't require brand knowledge, but it does require product knowledge. **Traditional convenience stores give the impression of high prices. Only by understanding products, making them good, and selling at good prices can you create differentiation.** Currently, our stores have 1000+ SKUs, with private label products accounting for only 2%, that is, over 40 SKUs, but they contribute more than 10% of store sales. In the future, we hope to reach 30-50%. Some companies do private label products with a large number of barcodes, but the more barcodes, the higher the cost. Why would I do so many? The fewer SKUs, the better! Our logic is—**do subtraction as much as possible, don't complicate things.** For example, hard discount talks about removing middlemen; we've been doing this for a long time. We are now national first-level agents for over 100 leading brands, and only a few small brands are supplied by middlemen. We also don't have so-called channel fees; these are practices that complicate retail. Another example is promotions. Actually, I think there shouldn't be promotions. Set a good price, and if consumers repurchase, that's enough. Of course, we still have them now, but personally, I don't like these actions. Xinjiayi members have a high repurchase rate: breakfast reaches 50%, fresh milk 41%, and "cold" products about 36%. High quality, low price, providing consumers with better quality-price ratio products—consumers will pay.
#### **"No change, no opportunity; change brings opportunity"**
The retail industry is undergoing significant changes now: discount supermarkets are rising, instant retail is developing rapidly, and supermarkets are adjusting. How does Xinjiayi view these changes, and what is the next key development direction? I want to know Wu's thoughts on the current industry transformation. "**Change is good. Without change, there's no opportunity. When the market changes, we have opportunities,**" Wu said. Take hard discount: where is it hard? Quality, shelf life, price—these are hard, which is beneficial to consumers and promotes retail evolution. For example, Snacks Are Busy (Liangpin Pufa) does emotional value very well. Customer needs are changing; if you keep up with changes, you have opportunities. Another example is instant retail. Now consumers shop online in large proportions. We operate 24 hours, plus delivery services, providing consumers with 24-hour service and improving store operational efficiency. Overall, our offline sales account for 84%, and online accounts for 16%. Xinjiayi has a high share on Meituan and Ele.me! **Regarding the next key focus, it's the county market.** We conducted consumer research, and consumers said they prefer a feeling of browsing in stores. On the other hand, e-commerce logistics costs in lower-tier markets are still relatively high. With a good store environment, differentiated products, and prices that don't pressure consumers, there's a great opportunity. County stores, combined with Xinjiayi's low-temperature and short-shelf-life specialty categories, can directly increase sales by about 2,000 yuan. After six months of operation, same-store sales after renovation have grown by 40%-50%. Of course, this requires supply chain support, especially cold chain logistics. **Xinjiayi has been investing in this area over the past few years. The cold chain logistics center phase one covers over 10,000 square meters, with a self-owned refrigerated and frozen distribution system, enabling daily fresh delivery of refrigerated and frozen products to all stores—fresher, more economical, and warmer.** The logistics park phase two covers 31,000 square meters and has been completed. Xinjiayi's self-built logistics distribution system can support 10 billion yuan in sales and meet the daily refrigerated and frozen delivery needs of 4,000 stores. The market is changing rapidly now, but our core thinking hasn't changed: satisfy consumers and let franchisees make money. We've done well in this regard. **Xinjiayi franchise stores generally recoup their investment in just over a year.** Now franchisees are even more active in opening stores than we are. There are several favorable conditions here, such as cheaper property rents and increasingly favorable bank loan rates. These are all opportunities brought by change. **In general, there are still ways to make money. The market will push you, but more often, you push yourself.**
#### **Final Thoughts**
In 2024, the retail industry is undergoing tremendous transformation. How to break through the status quo and find future development paths? Snack discount stores, full-category discount supermarkets, supermarket adjustments—everyone is exploring. Wu's sharing made me realize that labels like "convenience store" and "hard discount" are just tags. **It doesn't matter what label you put on; don't be bound by labels.** Starting from the essence of retail, doing products well, serving customers well, and letting franchisees make money—these are the core and the key to long-term development for retail enterprises. In 2025, the retail industry remains in a period of great change. I hope Wu's sharing inspires you. Due to space limitations, Wu's thoughts cannot be detailed one by one. **From March 17-19, 2025, the 10th China FMCG Innovation Conference, the 4th China FMCG Hard Discount Conference, and the 4th China FMCG Distributor Conference will be held in Chengdu.** **Xinjiayi founder & CEO Wu Minyi will attend. Interested friends are welcome to register.**
**【New Order · Symbiosis】**
******The 10th China FMCG Innovation Conference**
**Time: March 17-19, 2025**
**Location: Chengdu, China**


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