The rise of bulk snack stores has taken the Chinese market by storm, reflecting a significant trend fueled by the younger generationThis phenomenon is particularly visible in urban areas, where college students and young professionals are frequenting these snack havens, often merging snack purchases with their leisure outings.

For instance, Xiao Cheng, a university student born in 2004, represents this youthful demographic perfectlyHer school is conveniently located near a bustling shopping district accessible by subway, where popular shopping centers like Wanda Plaza feature a number of bulk snack storesXiao Cheng and her roommates have developed a habitual synergy; their weekly shopping trips are often accompanied by excursions into stores like “Snack Busy” and “A Di A Di,” where they stock up on a myriad of snacksThe lure of indulging in snacks while binge-watching TV shows has become part of their routine

“Whenever we pass by these stores, we think about ‘replenishing our stash,’” she shared, revealing her group's tendency to act on promotions from their favorite snack venues.

What drives the allure of these bulk snack establishments? First and foremost, it’s the variety and cost-effectivenessThe consensus among Xiao Cheng and her peers is that the array of choices coupled with lower prices gives them great valueThis trend is not new, as snack shops have existed in various forms, from traditional convenience stores to specialized outlets like “Bestore” and “Liangpin Shop.” The bulk snack format can be traced back to around 2010 with brands like “MrsBoss” and “Sugar Nest,” but it only exploded in popularity after 2022. The term “bulk” comes from Japanese, originally referring to wholesale sales, but in the context of China, it signifies a gathering of various snack types at competitive prices.

According to market research firm iiMedia Research, the market size for snack collection stores in China skyrocketed from 21.1 billion yuan in 2019 to 46.2 billion yuan in 2022, with projections reaching 80.9 billion yuan in 2023 and 104 billion yuan in 2024, forecasted to hit 154.7 billion yuan by 2027. The annual compound growth rate for the period from 2022 to 2027 is expected to be approximately 25%.

The industry landscape is fiercely competitive, characterized by a rapid influx of new players

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Snacks shops previously had a diverse landscape, but with the entry of bulk snack retailers, the competition has intensified significantlyThese firms are competing for market share by forming alliances and employing various strategies to attract franchisees while increasing their visibility through the sheer number of outletsThe current scenario can be described as a transformation from a blue ocean into a red ocean; the competition has reached fever pitchPlayers are engaging in close-range battles through price wars while also experimenting with new business models to uncover fresh growth avenues.

The structural dynamics present a “two major and many strong” scenario in the bulk snack industryAs of 2024, the number of bulk snack stores in the country exceeded 35,000. A report published by Huafu Securities in December 2024 ranked the top five brands by store count: "Zhao Yiming" with nearly 8,000 locations, "Snack Busy" with nearly 7,000, "Want to Come" with about 6,000, "Snack You Ming" with over 3,000, and "Love Snacks," also around 3,000. Other emerging brands range between 1,000 and 2,000 stores, including “Lai You Pin,” “Sugar Nest,” and “Snack Selection.”

The industry has effectively created a competitive landscape dominated by a few; "Ming Ming Snack Busy Group," formed from the merger of Zhao Yiming and Snack Busy, stands as a counterpart to Wanchen Group, which owns brands like Want to Come and Lai You Pin

Initially engaged in mushroom research and sales, Wanchen Group went public in 2021 and entered the bulk snack market by establishing the brand "Lu Xiaochan" in 2022, followed by acquisitions of other brands, significantly boosting their store count to over 7,000 as of July 2024, with ambitions for 10,000 stores by 2025.

Expand and acquire; this has been the mantra for Wanchen GroupReportedly, their revenue soared from 549 million yuan in 2022, where bulk snacks only contributed 12% of sales, representing around 66.56 million yuan, to an astounding 9.294 billion yuan in 2023, where bulk snacks made up a whopping 94%, amounting to 8.759 billion yuan, and a store count exceeding 4,700. By the third quarter of 2024, their revenue reached 20.613 billion yuan, showcasing a remarkable year-on-year growth exceeding 300% primarily due to scaling their bulk snack operations.

In contrast, Ming Ming Snack Busy has also exhibited rapid growth, making it a significant player in the market

Established in 2017, Snack Busy garnered significant investment in 2021, quickly surpassing 1,000 stores by March 2022 and 2,000 by November of the same yearZhao Yiming, founded in 2019, followed a similar trajectory, quickly attaining a notable store count and securing substantial investments for expansionTheir recent merger has forged a formidable entity, which had already surpassed 10,000 locations in June 2024, with expectations to reach 15,000 by the end of the year according to Huafu Securities projections.

The merger of Snack Busy and Zhao Yiming has inevitably stirred controversyJust a month before the merger, “Good Good” offloaded its entire stake in Zhao Yiming, leading to subsequent litigation over alleged concealment of serious operational matters affecting minority shareholdersThe case is still pending after two appeals.

Additionally, the State Administration for Market Regulation penalized the Snack Busy and Zhao Yiming merger for failing to file for prior approval, issuing a fine of 1.75 million yuan

They found that this merger did not lead to a monopolistic effect but underscored the fragmented nature of the market.

This transient market evolution reveals significant insightsThe once-disparate bulk snack brands have consolidated into a powerhouse through Wanchen Group's integrations, while the rise of Ming Ming Snack Busy and Zhao Yiming gradually transformed the landscape into a competitive triad, culminating in the dominant duopoly post-merger.

Within this duopoly, competition is fierce, with brands deploying enticing policies to woo franchisees; for example, "Want to Come" waives all franchise-associated fees, while Ming Ming offers an even more attractive “five-zero plan” eliminating various costs while providing sizeable subsidies for store setups.

For many, the first encounter with a bulk snack store impresses them with the sheer affordability

For instance, an office worker named Xiao Feng was drawn when he spotted Pepsico soda priced at just 1.8 yuan per bottle at Snack BusyThis price is compelling compared to general supermarket prices exceeding 3 yuan for a standard canInitially cautious about quality, especially regarding expiry dates, he soon found that the goods were often fresh, alleviating his concerns.

It’s this pricing advantage that primarily stems from minimized procurement costsReports indicate that bulk snack retailers directly engage with upstream suppliers, eliminating costs like entry fees and bar codes, allowing them to offer prices 20% to 30% lower than supermarkets.

Yet, some consumers are becoming wary of a phenomenon dubbed "snack ambush." For instance, Xiao Hongshu users have highlighted discrepancies where two similarly sized snack bags were significantly different in pricing – one being 49.6 yuan per kilogram while the other was only 27 yuan per kilogram, raising questions about fair pricing.

Such experiences create a sense of unease among shoppers, prompting suspicion about whether favorable pricing truly reflects quality

The bulk weights and pricing schemes employed by competitors have led to confusion among consumers, who often find it challenging to discern the true value of what they're purchasing.

In this ongoing confrontation, even established brands face risks of survivalA noteworthy example includes Xiao He, a young entrepreneur who used her savings to open a bulk snack store in her hometown, only to watch her business suffer after a competing store opened nearbyDespite initial success, her establishment struggled, leading to its closure just months later due to overwhelming competition.

As the competition does not relent, major brands continue to engage in razor-thin profit margins, with Wanchen Group recently reporting a loss of 82.93 million yuan in 2023, offsetting it somewhat with a slight profit of only 8.407 million yuan in the first three quarters of 2024.

New contenders observe the field with keen interest, such as traditional tea brands diversifying into the snack market and others trying to follow suit in lowering prices