Chinese Embrace Convenience Stores

Across the country, retailers are influencing their communities for the good.

October 07, 2014

SUZHOU, China – In China, convenience stores are making inroads into the busy lives of the Chinese, the China Post reports. In Hong Kong, many stores, such as Lan Kwai Fong, Sheung Wan and Wan Chai, are branching out into alcohol, which has proven popular with Milliennials.

“Most kids now will go to 7-Eleven instead of going to a bar. The line at 7-Eleven in Lan Kwai Fong goes out the door, selling beer, wine, and liquor. As a consumer, I think it is cool now to have that option. If I'm going to drink on the street anyway, I can pay one tenth of the price,” James Fisher, a U.S. expat entrepreneur, told the China Post.

Over on the mainland, the convenience store industry closed in on nearly $9 billion in sales last year, up sharply from 2009 ($4.8 billion). Part of the success has been the market’s segmentation.

“Convenience stores are different in Beijing, Shanghai, and Guangzhou. They are not unified. Branding is different. Strategies are different. Sometimes, one company has different brands in different cities and provinces,” said Atthieu David, president of Daxue Consulting. David reported that China has around 200 different chains, with the largest being Bright Food, Chengdu Hongqi, China Resources, Dongguan and 7-Eleven.

David pointed to smaller cities as where the most c-store growth will occur in the coming years. “Suzhou is the fastest growing market. The number of convenience stores is growing the fastest in second tier cities. In 2013, Suzhou doubled. Changsha had 20% growth.” David expects double digit growth in second-tier cities and single digit growth in cities like Shanghai and Beijing, which are “not as healthy because they may have too many now,” he said.

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