Billion-dollar market: Soft drinks, dairy and snacks are most purchased products in Chinese convenience stores
Among the purchases include carbonated soft drinks, juice, bottled water, milk, yoghurt, potato chips and chocolate bars.
Chih-yuan Wang, category research director, retail, China at Mintel Reports told FoodNavigator-Asia: “Food and drink are the main products in convenience stores, especially ready-to-drink beverages, confectionaries, snack food etc.”
The report pointed out that dairy products in particular, which tend to be more costly than other food items, were gaining popularity among Chinese consumers with high personal income, and those living in tier one cities.
“As consumers seek fresher products and increasing acceptance of chilled dairy products, convenience stores’ cold-chain transportation and high turnover rates are clear advantages to bringing in more dairy products with a shorter shelf life,” the report said.
In terms of other food items, Wang said health foods and supplements were not generally sold in convenience stores in China.
Wang said most of the products stocked were produced domestically, but added “imported products are gaining popularity but haven’t yet become the main products.”
Mintel predicts that the market value of Chinese convenience stores will reach RMB 246 billion (US$35bn) by 2024, from RMB 140 billion (US$20bn) in 2018. It grew at a CAGR of 24% over the past five years.
Given consumers’ ongoing demand for convenience, coupled with rising urbanisation, this momentum and vibrant growth is expected to keep up in the years to come.
The number of convenience stores is predicted to increase too, from 75,000 units in 2018, to an estimated 117,000 units by 2024.
In 2018, the top 10 convenience store brands accounted for 53.5% of market share.
East Asia influence
The top four most visited brands were FamilyMart, 7-Eleven, Meiyijia and Lawson respectively.
According to Wang, Chinese convenience stores were generally influenced from Japan, Taiwan, and Hong Kong.
The popularity of FamilyMart was attributed to more consumers in the East region visiting convenience stores.
Wang added there was a huge gap in visits between urban and rural areas. Within China, consumers living in the North region such as Changchun and Yantai had lower levels of visiting convenience stores overall.
Meiyijia currently owns the most number of stores in China, at 15,000 units.
More private label
The report also indicated room for private label development in China’s convenience stores, “(which) still lags far behind that of equivalent chains in developed countries.”
For instance, FamilyMart in China has launched its own snack food brand, YUMMY, and 7-Eleven has introduced its own private label line, Seven Select.
According to the report, many large chain operators are also increasing their fresh and healthy products, private label products, as well as premium and imported food offerings to improve profitability.
The report also recommended exporters to target local distributors, which convenience store operators rely on, rather than working directly with the convenience stores.
Based on the growing number of outlets and popularity with consumers, the report concluded that convenience stores will grow over the next three years and may become an important distribution channel for imported foods.