Bulk snack stores open on the Third Ring Road

Ask AI · Why are bulk snack stores moving into first-tier city core areas after saturating down-tier markets?

Reporter Zheng Mingzhu

With their highly saturated storefronts, eye-catching yellow signboards, and pricing branded as “great value” … these bulk snack stores that have been capturing ground in county towns and suburban areas are now moving toward the core zones of first-tier cities.

According to an incomplete tally by an Economic Observer reporter, just since this year, led by brands such as Zhaoyiming Snacks and Haoxianglai, multiple snack bulk stores have opened densely within Beijing’s Third Ring Road, including Zhaoyiming Snacks Jinsong Third Community store, Zhaoyiming Snacks Fangzhuang Fangguyuan store, Zhaoyiming Snacks Jiaoda East Road store, and Haoxianglai Snack Paradise Dongxinglong Street store, among others.

Originating in down-tier markets, these bulk snack brands are opening a new battlefield in the core areas of high-tier cities. This marks a new stage for the industry as it shifts from large-scale expansion to uncovering new growth opportunities.

Diving into the community

The reporter recently visited three bulk snack stores in Beijing’s core areas: Haoxianglai Snack Paradise Dongxinglong Street store, Zhaoyiming Snacks Jiaoda East Road store, and Zhaoyiming Snacks Jinsong Third Community store, among others.

Compared with down-tier market stores that often take up corner locations and are larger than 150 square meters, these stores are relatively smaller, roughly around 100 square meters. Their shelving aisles are narrower, and the layout is tighter. From the products on offer, at the spot right when you enter, there are freezers filled with all kinds of beverages. Among them, both the Zhaoyiming Snacks Jiaoda East Road store and the Zhaoyiming Snacks Jinsong Third Community store also have ovens at the entrance, selling items such as baked sausages and egg tarts. The baked sausages cost 1.9 yuan per stick, and the egg tarts cost 9.9 yuan for six, consistent with other Zhaoyiming stores.

Most of the businesses living side by side with these bulk snack stores are small food-and-beverage shops, electric vehicle stores, and dried-fruit stores. Around the stores there are mostly mature residential communities, and within roughly 300 meters you typically have primary schools, middle schools, or universities.

During weekdays, these stores have relatively fewer customers during the day. Taking a bulk snack store on South Second Ring Road as an example: on weekday afternoons around 4:00, the number of people entering the store in ten minutes is about 10. But by the time people get off work, foot traffic gradually increases—around 5:30, the number of people entering in ten minutes is about 30.

A security guard near another store said that the bulk snack stores have very good customer flow, especially during after-school and after-work hours, when checkout lines often form outside the door. A staff member at a bulk snack store within the Third Ring Road said that nearby elementary and middle school students are the main consumer groups.

The pace at which bulk snack brands such as Haoxianglai and Zhaoyiming Snacks are entering the core areas of first-tier cities is accelerating. Within Beijing’s Third Ring Road, Zhaoyiming Snacks has opened multiple stores in a concentrated way over the past more than three months, and Haoxianglai Snack Paradise Dongxinglong Street store also opened this March. At the same time, Very Busy Snacks opened the Weifang store in Pudong, Shanghai in 2025, located less than 4 kilometers from the Oriental Pearl.

In response to the “city expansion” strategy, Wanchen Group, Haoxianglai’s parent company, said in its reply to the Economic Observer that Haoxianglai’s site selection always follows its own unique principles, with the core being continuously improving the profit level of franchisees. In particular, as its instant retail business expands, the store service radius has extended from the traditional 1–2 kilometer “regular customer circle” to 3–5 kilometers of potential new customer groups, enabling the brand to reach more young white-collar workers and family users who pursue efficiency.

Why “move into cities”

One important reason bulk snack stores are moving into cities at this time is that down-tier markets are trending toward saturation.

After several years of rapid expansion, the bulk snack industry has formed a highly concentrated market structure. According to data from Zhushi Consulting, as early as 2024, the industry’s CR2 for bulk snack (Mingming Very Busy + Wanchen Group’s market share) had already reached 75.1%.

As of November 2025, Mingming Very Busy had more than 21k stores nationwide. As of December 31, 2025, the number of bulk snack stores under Wanchen Group exceeded 18k.

With lower rents and labor costs in down-tier markets, and with consumers being more price-sensitive, bulk snack stores focused on high value-for-money were able to expand quickly. For a long time, down-tier markets therefore became the core layout area for this kind of brand.

The listing prospectus of Mingming Very Busy shows that as of the end of 2024, the proportion of its stores in first-tier and new first-tier cities was only 17.6%, while nearly 70% of stores were still located in third-tier cities and below. Wanchen Group also told the Economic Observer that Haoxianglai has always regarded down-tier markets as the foundation for development and its basic business.

However, after rapid expansion, the dividends of down-tier markets are fading.

A store manager in a county town in Henan once told the Economic Observer that in the county town where he is located, six bulk snack stores have opened in the past two years, but consumer numbers have not increased; meanwhile, competitors have become more and more numerous, and the stores’ daily sales have declined significantly. On social platforms such as Xiaohongshu, over the past half year, multiple netizens have shared that bulk snack stores near their homes have closed. Wanchen Group’s financial reports also show that in 2025, the net increase in new stores was 4,118, down about 56.5% year-on-year compared with 2024. The number of store closures increased year-on-year by 96.7% to 602.

In January this year, a research report published by broker CICC showed that the industry’s “dual-strong” pattern in the 3.0 stage of the bulk snack segment has basically taken shape, entering a development stage centered on optimizing store operations and improving supply-chain efficiency. High-tier cities may have started earlier, but penetration improvements have been relatively gradual due to rental costs and competitive pressure.

So, first-tier brands in the bulk snack category are the first to turn their attention to first-tier city core areas, where penetration is still not high.

The cost ledger of “moving into cities”

When you open stores in the core areas of first-tier cities, the first challenge is cost pressure.

Within Beijing’s Third Ring Road, a store manager of a bulk snack store newly opened in 2026 worked out the numbers. The combined investment for initial renovation and initial stocking is about 700k yuan per store. The brand owner does not charge franchise fees; renovation, shelving, display setup, and so on are handled uniformly by the brand owner, but the costs are borne by the franchisee.

The store manager specifically emphasized the rental pressure: annual rent is 500k yuan. The store’s average daily sales are between 10k and 20k yuan. “Our gross margin isn’t high to begin with, so the rent pressure is definitely not small,” the manager said. The store’s average gross margin rate is about 20%.

Compared with the cost structure in down-tier markets, this pressure is even more direct. According to a September 2025 report by 36Kr, taking the Henan region as an example: right now, if you franchise a bulk snack store of a certain brand with 120 to 150 square meters, the initial investment budget should start at 600k yuan excluding rent, and the product profit margin is 19% to 20%. The annual rent for a 20-to-150 square meter store is about 200k to 300k yuan.

It is understood that the above bulk snack stores were transformed from fresh grocery supermarkets. Because large fresh supermarkets newly opened nearby split the customer base, the store owner switched to running a bulk snack store. After the transformation, foot traffic increased compared with before, and currently there is no direct competition from similar formats nearby. This is also a shared characteristic of store location selection for bulk snack stores in core urban areas—trying to avoid direct head-on competition with stores of the same type.

Facing down-tier market saturation and cost pressure in first-tier cities, players are also seeking breakthroughs.

Mingming Very Busy and Haoxianglai have both begun actively expanding product categories, trying to operate discounted supermarket new store formats. In 2025, Zhaoyiming launched a 3.0 store format called “Saving Money Supermarket,” expanding categories from snacks to daily chemicals, fresh food, and low-temperature frozen products, and it also added a baking section to improve sales per square meter. In 2025, Haoxianglai introduced two major store formats, including a Haoxianglai Saving Money Supermarket with more than 180 square meters. New categories include frozen fresh food, rice-noodles-grains-and-oils, daily necessities, and IP trend collectibles. The “All-Food Premium Stores” also added fruit categories, and the store area requirement is no less than 220 square meters, with warehouse area not less than 150 square meters. Meanwhile, both Mingming Very Busy and Haoxianglai are building their own brands, shortening the supply chain, and connecting directly with manufacturers.

Mingming Very Busy’s chairman and CEO Yan Zhou said in a media interview this January: “The goods we sell in Shanghai are exactly the same as the goods sold in a certain township in Changsha. We don’t have community stores, school stores, commercial district stores, or office building stores. This is one-face for ten thousand stores—it’s our headache. In the future, we hope to have one-thousand faces across ten thousand stores. Besides opening stores, we need to build refined operations—from ‘one face for ten thousand stores’ to ‘a thousand faces for ten thousand stores,’ so that every place has differentiated merchandise assortments.”