Core Insights - Wumart Group has launched its hard discount store "Wumart Super Value" with the first six locations in Beijing, aiming to open 25 stores by the end of 2025 [2][4] - The company is adopting a cost-cutting strategy by simplifying SKU, reducing operational and packaging costs, and focusing on six key product categories [2][3] - Wumart Super Value plans to enhance its private label offerings, targeting over 60% of its product range to be private label items [3][4] Company Strategy - The project operates independently while leveraging Wumart Group's existing supply chain for some backend operations [4] - The store design emphasizes efficiency with a limited product selection of under 1,300 SKUs, which is expected to improve turnover rates and reduce inventory costs [2][4] - Employee count per store is limited to around 20, utilizing a job rotation system to optimize labor costs [2] Industry Context - The hard discount retail format is gaining traction in the industry, with competitors like Meituan and Aldi expanding their presence in China [4][5] - The traditional hypermarket model is facing challenges due to the rise of online shopping and new retail formats, prompting companies like Wumart to explore new growth avenues [5] - The 2024 China Supermarket Top 100 report indicates that Wumart Group's sales reached 57.897 billion yuan, ranking fifth with a year-on-year growth of 2.4% [4][5]

Group 1 - The core issue revolves around Sam's Club's recent decision to remove popular products, leading to backlash from middle-class consumers who feel undervalued [1] - Sam's Club quickly reversed its decision after receiving negative feedback, highlighting the challenges of catering to middle-class consumers [1] - Hema has shifted its focus from targeting urban middle-class consumers to expanding into discount retail, closing its membership stores [1][5] Group 2 - Hema NB has opened new stores in Jiangsu and Zhejiang provinces, marking its entry into county-level markets [2] - By the end of 2024, Hema plans to position Hema NB as one of its core business models, focusing on expanding into affluent county-level cities [3] - Hema NB has signed contracts for 355 stores, with expectations to reach 1,000 stores by the end of the year [4] Group 3 - Hema NB is set to undergo a rebranding to "Super Box NB," which will include changes to store signage and product branding [6] - The new branding aims to emphasize price competitiveness, with products like low-temperature fresh milk priced at 7.5 yuan for 950ml [6] - Hema NB's expansion strategy focuses on affluent areas within the Yangtze River Delta, with a current total of 263 stores across 12 cities [9] Group 4 - Hema NB's store locations are strategically chosen in high-GDP areas to ensure stable customer traffic, with a focus on urban centers [11][12] - The store's operational model includes cash payments and self-checkout options, catering to a broader demographic, including older consumers [16] - Hema NB's product selection emphasizes essential goods while maintaining a streamlined inventory of 1,000 to 1,500 SKUs to enhance efficiency [18] Group 5 - Hema NB's evolution from Hema Outlet to a discount store model reflects a shift in supply chain strategy, reducing unnecessary costs [17] - The store's product offerings include a mix of self-branded and popular brands, with a significant portion of self-branded items [19][20] - Hema NB's pricing strategy is competitive, with products like fresh orange juice priced at 9.5 yuan, significantly lower than competitors [20][23] Group 6 - The discount retail sector is becoming increasingly competitive, with new entrants like Walmart and Meituan exploring similar business models [24][27] - Hema NB faces direct competition from Aldi, which has a more established supply chain and pricing strategy [27][31] - Hema aims to leverage its digital capabilities and delivery services to enhance its market position against competitors [32][36]

Investment Rating - The report maintains a "Positive" investment rating for the snack wholesale industry [11] Core Insights - The snack wholesale industry is entering a 2.0 era, characterized by rapid expansion and a shift towards a full-category discount model as brands adapt to market saturation [4][9] - The industry has seen significant growth, with over 40,000 stores expected by the end of 2024, driven by a consumer trend favoring cost-effective options [8][45] - The transition to a full-category discount model is essential for brands to enhance profitability and customer experience, with supply chain optimization being a critical factor [10][53] Summary by Sections Industry Overview - The Chinese snack food industry exceeds 1 trillion yuan, with a low concentration due to diverse consumer preferences [7] - The evolution of the industry has been closely tied to changes in retail channels, moving from traditional retail to e-commerce and now to snack wholesale [7][23] Market Dynamics - The snack wholesale sector has experienced rapid growth, with a compound annual growth rate (CAGR) of 15% to 16% from 2022 to 2024, as consumers seek value for money [19][20] - The emergence of brands like "Snack Busy" and "Zhao Yiming" reflects the competitive landscape, with a focus on low prices and a wide range of products [8][9] Transition to Full-Category Model - As the snack wholesale market matures, brands are exploring full-category discount formats to maintain growth and profitability [9][53] - The success of this transition relies heavily on effective supply chain management and product selection [10][53] Competitive Landscape - The market is witnessing a dual oligopoly formation with "Snack Busy" and "Wanchen" leading the charge, controlling a significant share of the market [45][47] - The report highlights the importance of strategic mergers and acquisitions in enhancing brand influence and operational efficiency [47][50] Future Outlook - The snack wholesale industry is projected to continue its expansion, with an estimated 45,000 stores by 2025, indicating a robust growth trajectory [45][46] - The focus on supply chain efficiency and customer-centric strategies will be pivotal in navigating the competitive landscape [10][53]