According to 2013 China Urban Convenience Stores Index which is released by China Chain Store & Franchise Association, the average saturation level of convenient stores on the Chinese mainland is one convenience store for around every 5000 people, which is relatively low compared with Japan and Taiwan for every 2000 people. The industry data has revealed a great potential in the Chinese convenience store market.
Growth Shown in Industry DataIn 2013, under the pressure of the impact of the slowdown of the economy, the government’s anti-corruption policies and emergence of e-commerce, the convenient stores are continued to enjoy double-digit growth and become fastest-growing retail sector with a growth rate of 19.5 percent on average in 2013, higher than the slower growth of department stores and hypermarkets.
Competition of Traditional BrandsMarket growth led to fierce competition, despite the rapid expansion of convenience stores, profits and the scale of business, convenience store brands are relatively low. The reports show that among 176 brands in the 26 cities, more than 10 brands compete in large cities.
High rents have become the biggest hurdle for convenience stores in major cities such as Beijing and Tianjin in the quest to open new stores for Seven-Eleven (Beijing) Co Ltd.
Having focused its Chinese business on closing money-losing locations, Japanese convenience store chain Lawson plans to open 180 stores, five times the 2013 level. In 2012 and 2013, Lawson kept openings to around 40 stores a year while it shut down more locations to improve profitability amid rising rents. Lawson will have 550 locations in five Chinese cities by year-end. It fell behind rivals Seven-Eleven Japan and FamilyMart, which have around 2,000 and 1,100 locations in China, respectively.
New Entry of HypermarketsAmerican company Walmart, the French company Carefour, etc.. are shifting their previous strategy in China from Hypermarkets to convenience stores.
Last month, France’s Carrefour confirmed that it is expanding in China with its Easy Carrefour convenience chain store brand. German’s Metro opened its first convenience store in Shanghai. One of China’s biggest local brand, RT-mart, has also announce its opening of its convenience stores. .