Core Viewpoint - The snack retail industry, particularly the bulk snack stores, continues to thrive despite challenges, with significant growth in revenue and new store openings, indicating a strong market demand and potential investment opportunities [4][5][6]. Group 1: Industry Growth and Trends - The bulk snack industry has seen a compound annual growth rate of nearly 200% from 2022 to 2024, with major players like Mingming Hen Mang and Wancheng Group achieving substantial revenue increases [4]. - In the first quarter of this year, while 1,094 snack stores closed, 1,400 new stores opened, showcasing a net positive growth in the sector [5]. - The average annual revenue for successful snack stores can reach up to 6 million, with some owners reportedly making their first million through this business model [4][11]. Group 2: Business Model and Consumer Behavior - The business model of bulk snack stores relies heavily on low pricing and high SKU variety, with many stores offering private label products that attract price-sensitive consumers [12][13]. - The average transaction volume for major players in the industry is significant, with Mingming Hen Mang recording 1.6 billion transactions in 2024 and a high repurchase rate of 75% [16]. - The strategy of offering mini versions of popular snacks allows consumers to try various flavors without the risk of waste, further driving sales [14]. Group 3: Challenges and Market Dynamics - Despite the apparent profitability, many store owners face challenges such as high operational costs, difficulty in hiring staff, and intense competition leading to price wars [18][20][32]. - The saturation of the market is evident, with reports of multiple stores opening in close proximity, leading to reduced sales for existing stores [28][37]. - The shift in consumer spending patterns, particularly in urban areas, has made it crucial for snack retailers to adapt their strategies to target lower-income regions where demand remains strong [22][25].

Core Viewpoint - The snack retail industry, particularly the bulk snack stores, continues to thrive despite a wave of store closures, with significant revenue growth reported by leading companies in the sector [3][5][6]. Group 1: Industry Growth and Trends - The bulk snack industry is experiencing a "violent rise," with major players like Mingming Hen Mang and Wancheng Group achieving nearly 200% compound annual growth rate in revenue from 2022 to 2024 [3][5]. - In 2022, Mingming Hen Mang reported a profit of 800 million, a year-on-year increase of 284% [3]. - Despite a "transfer wave" in the industry, where many snack stores are closing, new openings are outpacing closures, with 1,400 new stores launched compared to 1,094 closures in the first quarter of this year [5]. Group 2: Business Model and Consumer Behavior - The business model of bulk snack stores relies heavily on low pricing and high SKU variety, attracting consumers with competitive pricing compared to convenience stores [11][12]. - The average transaction volume for Mingming Hen Mang is projected to reach 1.6 billion transactions in 2024, with a high repurchase rate of 75% [12]. - The presence of private label products, which make up a significant portion of inventory, allows stores to maintain low prices and adapt quickly to consumer preferences [11][12]. Group 3: Challenges and Market Dynamics - The industry faces challenges such as high employee turnover and difficulties in hiring competent staff, which can impact store operations [14][16]. - The competitive landscape is intensifying, with many new stores opening in close proximity, leading to price wars and reduced profitability for existing stores [28][30]. - Franchisees are experiencing pressure from brand owners to lower prices and increase inventory diversity, which can strain their profitability [29][30]. Group 4: Market Segmentation and Location Strategy - The trend indicates a shift towards rural and lower-tier cities for snack store openings, where operational costs are lower and consumer spending remains robust [20][21]. - Urban locations, while initially attractive, may not yield the expected returns due to higher costs and lower disposable income among consumers [22][23]. - Successful franchisees are increasingly focusing on smaller towns and counties, where consumer behavior and spending patterns favor snack purchases [20][21].