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Convenience Stores - China - July 2019

Covered in this report

According to the National Standard Retail Business Category ( 零售业态分类) (GB/T18106-2004), convenience stores (CVS) are defined as a small-store grocery-focused retail format which offers convenience services for people needing to undertake topup shopping or make distress purchases. The sector has also become increasingly prominent in consumers’ last-minute meal shopping.

In practice, convenience stores should:

  • Be open seven days a week and have 16-24 hours of operational store opening times;
  • Sell an extended range of goods including a range of knownvalue items such as food, drinks, basic household groceries and newspapers;
  • Provide a range of services, including, but not limited to, mobile phone top-up, utility bills payment, credit card repayment, and parcel delivery;
  • Serve a local community within easy reach by foot or by bicycle;
  • Usually trade from a unit around 100 sq. metres in size

“The convenience store sector has maintained vibrant double-digit growth, even at a challenging time for brick-and-mortar retail, thanks to consumers’ continuous pursuit of time efficiency, availability, and instant fulfilment. Ready meals and freshly made beverages in c-stores are winning over Chinese consumers as they provide a quick and economical option for proper meals and afternoon tea. C-store brands should explore the possibility of positioning themselves as relaxing third spaces in cities to better serve local communities and busy office workers.”

–    Scarlett Zhao, Associate Research Analyst

This report will look at the following areas:

  • A new leisure venue and community space for city dwellers
  • Better understand and reward loyal customers
  • Introduce themed/pop-up stores to differentiate from competitors

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this report
        • Excluded
          • Definitions
          • Executive Summary

              • The market
                • Convenience stores still going strong despite the slowdown in offline retailing
                  • Figure 1: Best-and Worst-case retail sales forecast of convenience stores (excluding petrol station convenience stores), China, 2014-24
                  • Figure 2: Best-and Worst-case forecast of convenience store numbers (excluding petrol station convenience stores), China, 2014-24
                • Companies and brands
                  • Market share of most leading convenience stores remained stable
                    • Figure 3: Leading convenience store chains’ market share, 2017/18
                  • More private label products are launched by leading brands
                    • C-stores can also introduce shopping festivals to stimulate short-term consumption
                      • The consumer
                        • C-stores are a must in everyday life
                          • Figure 4: C-store shopping frequency, March 2019
                        • Soft drinks, dairy products and snacks still top product purchased in convenience stores
                          • Figure 5: Products bought in c-stores, March 2019
                        • An economical dining space for working people
                          • Figure 6: Products bought in c-stores, by selected demographics, March 2019
                        • Heavy shoppers care more about c-store services
                          • Figure 7: Factors influencing choice of convenience stores, March 2019
                        • The advantages of popular c-store brands
                          • Figure 8: Top ten convenience stores visited by surveyed consumers, March 2019
                        • Consumers expect more ready meal options from c-stores
                          • Figure 9: Ideal convenience stores, March 2019
                        • Themed stores and new products are favoured by young and female consumers
                          • Figure 10: Attitude towards convenience stores, by selected demographics, March 2019
                        • What we think
                        • Issues and Insights

                          • A new leisure venue and community space for city dwellers
                            • The facts
                              • The implications
                                • Figure 11: café bar in 7-Eleven, Taiwan
                                • Figure 12: FamilyMart ParCafé
                              • Better understand and reward loyal customers
                                • The facts
                                  • The implications
                                    • Figure 13: 7-Eleven x Avengers: Endgame
                                  • Introduce themed/pop-up stores to differentiate from competitors
                                    • The facts
                                      • The implications
                                        • Figure 14: Lawson x Hello Kitty
                                    • The Market – What You Need to Know

                                      • Convenience store format holds positive outlook
                                        • Government policies provide more support towards life service providers
                                          • Cooperation with delivery platforms expand the coverage of convenience stores
                                          • Market Size and Forecast

                                            • Convenience store sales growth exceeds most retail formats
                                              • Figure 15: Convenience stores sales revenue (excluding petrol station convenience stores), China, 2014-19
                                              • Figure 16: Best-and Worst-case retail sales forecast of convenience stores (excluding petrol station convenience stores), China, 2014-24
                                            • Number of convenience stores soars to 75,000 in 2018
                                              • Figure 17: Convenience stores numbers (excluding petrol station convenience stores), China, 2014-19
                                              • Figure 18: Best-and Worst-case forecast of convenience store numbers (excluding petrol station convenience stores), China, 2014-24
                                          • Market Drivers

                                            • Deregulation of ready-to-eat and light meals in convenience stores
                                              • Young generation focus more on convenience and instant fulfilment
                                                • Figure 19: % of heavy shoppers, by generation, March 2019
                                              • Delivery services enable convenience stores to expand “last mile” coverage
                                              • Key Players – What You Need to Know

                                                • Leading convenience stores’ market share remained relatively stable
                                                  • Leading brands introduce more own brand products in stores
                                                    • Convenience stores can create their own festivals
                                                    • Market Share

                                                      • The market remains fragmented but leading brands are expanding aggressively
                                                        • Figure 20: Leading convenience store chains’ market share by number of outlets, 2017/18
                                                      • Meiyijia exceeded 10,000 stores and maintains leading position
                                                        • E-commerce companies strongly enter the c-store market
                                                        • Competitive Strategies

                                                          • Leading brands launch private labels
                                                            • More than half of c-brands have introduced customer loyalty programs and customer management systems in 2018
                                                              • Figure 21: Availability of customer loyalty programs among Chinese convenience store brands, 2017-18
                                                            • Different products are introduced according to neighbourhood and purchasing preference
                                                              • Figure 22: Lawson & Fresh Fruits in Hanghzhou
                                                          • Who’s Innovating?

                                                            • Brand limited-edition products in c-store channel are emerging
                                                              • Figure 23: Haagen-Dazs x To b. by agnes b.
                                                            • Shopping festivals can also be promoted in c-stores
                                                              • Figure 24: FamilyMart “Crazy Wednesday”
                                                            • New technology improves c-store operation efficiency
                                                              • Figure 25: CES Asia Suning stand
                                                          • The Consumer – What You Need to Know

                                                            • Only 2% of surveyed consumers have not shopped at c-stores
                                                              • Ready-to-eat meals growing in popularity
                                                                • Heavy shoppers place high requirements on c-store services
                                                                  • Which c-store brand is more popular?
                                                                    • Imported products could be another differentiator for c-stores
                                                                      • Young and female consumers show more favour towards themed c-stores
                                                                      • Purchase Frequency

                                                                        • Convenience stores play a crucial role in urban life
                                                                          • Figure 26: C-store shopping frequency, March 2019
                                                                        • Young adults and married consumers with children are more likely to be heavy shoppers
                                                                          • Figure 27: % of heavy shoppers, by generation and family structure, March 2019
                                                                          • Figure 28: Cashier area of FamilyMart
                                                                        • Convenience stores are more of a shopping and dining venue for heavy shoppers
                                                                          • Figure 29: Attitude towards c-stores, by consumer groups with different consumption frequency, March 2019
                                                                          • Figure 30: Attitude towards c-stores, by consumer groups with different shopping frequency, March 2019
                                                                          • Figure 31: Attitude towards c-stores, by consumer groups with different shopping frequency, March 2019
                                                                          • Figure 32: Lawson capsule vending machine
                                                                      • Products Bought

                                                                        • Soft drinks, dairy products and snacks are still the most purchased products
                                                                          • Figure 33: Products bought in c-stores, March 2019
                                                                        • Ready-to-eat meals keep gaining popularity
                                                                          • Figure 34: Products bought in c-stores, March 2019
                                                                          • Figure 35: Heated ready-to-eat food in c-stores
                                                                        • A new urban ‘canteen’ for working people
                                                                          • Figure 36: Products bought in c-stores, by selected demographics, March 2019
                                                                          • Figure 37: ready-to-eat food in 7-Eleven in Wuhan
                                                                      • Drivers to Select Convenience Stores

                                                                        • Product quality and product variety are still the key to attract footfall
                                                                          • Figure 38: important factors when choosing a convenience store, March 2019
                                                                        • Low tier city consumers tend to be more price sensitive
                                                                          • Figure 39: Attitude towards convenience stores, March 2019
                                                                        • Better services are key to engage heavy shoppers
                                                                          • Figure 40: important factors when choosing a convenience store, by consumer groups of different shopping frequency, March 2019
                                                                          • Figure 41: FamilyMart with Fit & GO
                                                                      • Most Visited Convenience Stores

                                                                        • FamilyMart is gaining popularity in East region and 7-Eleven is winning in South region
                                                                          • Figure 42: Top ten convenience stores visited by surveyed consumers, March 2019
                                                                          • Figure 43: Top four most visited convenience store chains crossed by regions, March 2019
                                                                          • Figure 44: Top four most visited convenience stores crossed by cities, March 2019
                                                                        • Ready-to-eat and freshly made drinks are the strength of foreign convenience store brands
                                                                          • Figure 45: Top four most visited c-stores crossed by purchased product, March 2019
                                                                        • The operating strengths of leading c-store brands
                                                                          • Figure 46: Top four most visited c-stores crossed by drivers to visit c-stores, March 2019
                                                                      • Ideal Convenience Stores

                                                                        • More meal options are wanted in c-stores
                                                                          • Figure 47: Ideal convenience stores, March 2019
                                                                          • Figure 48: FamilyMart rice boxes
                                                                        • 30-49s want more daily necessities in c-stores
                                                                          • Figure 49: Factor of “more daily necessities”, by selected demographics, March 2019
                                                                        • Imported products could be the path to brand elevation
                                                                          • Figure 50: Factor of “more imported food”, by selected demographics, March 2019
                                                                      • Shopping Preference

                                                                        • Location and convenience are still key
                                                                          • Figure 51: Attitude towards convenience stores, March 2019
                                                                        • Consumers show more rationality in selecting products
                                                                          • Figure 52: Attitude towards convenience stores, March 2019
                                                                        • Themed stores and new products are appealing to young and female consumers
                                                                          • Figure 53: Attitude towards convenience stores, by selected demographics, March 2019
                                                                          • Figure 54: FamilyMart hidden menu
                                                                      • Meet the Mintropolitans

                                                                        • 1 in 5 Mintropolitans are c-store heavy shoppers
                                                                          • Figure 55: Shopping frequency, by selected demographics, March 2019
                                                                        • Product quality is also a key factor to attract Mintropolitans
                                                                          • Figure 56: Gap of influencing factors of brand image between MinTs and non-MinTs (as benchmark), by selected demographic, March 2019
                                                                        • C-stores offer a relaxing venue for leisure and shopping for Mintropolitans
                                                                          • Figure 57: Attitude towards convenience stores, by selected demographics, March 2019
                                                                      • Appendix – Market Size and Forecast

                                                                          • Figure 58: Total value sales of convenience stores (excluding petrol station c-stores), China, 2014-24
                                                                          • Figure 59: Total number of convenience stores (excluding petrol station c-stores), China, 2014-24
                                                                      • Appendix – Methodology and Abbreviations

                                                                        • Methodology
                                                                          • Fan chart forecast
                                                                            • Abbreviations

                                                                            Convenience Stores - China - July 2019

                                                                            £3,486.28 (Excl.Tax)