C-store fever: China’s convenience store market reached RMB140 billion in sales in 2018

The vibrant growth of the convenience store sector has been driven by rising urbanisation and newly emerging consumer lifestyles, and is expected to maintain this momentum in the years to come.

Indeed, latest research from the world’s leading market intelligence agency Mintel reveals that the convenience store market reached total sales revenue of RMB140 billion in 2018, at a CAGR (compound annual growth rate) of 24% over the past five years. Given consumers’ ongoing demand for convenience, Mintel predicts that the total sales revenue of the c-store market will reach an estimated RMB161 billion in 2019.

The number of convenience stores is predicted to rise as well, increasing rapidly from 75,000 units in 2018, to an estimated 117,000 units by 2024.

Chih-yuan Wang, Category Research Director, Retail, Mintel Reports – China, said:

“The convenience store sector has experienced double-digit growth, even at this challenging time for brick-and-mortar retail in China. This is due, in part, to consumers’ continuous pursuit of time efficiency, availability and instant fulfillment. Some c-store players have cooperated with delivery platforms to expand the physical shopping scenario and enabled ‘last mile’ coverage. Consumers can now order online for delivery, or order in advance and pick up in stores to save time by avoiding queues. It is predicted that the growth momentum of c-stores will continue, as small retail formats will continue to gain popularity in China’s retail market.”

A new leisure venue and community space

Shopping at convenience stores has become an integral part of Chinese consumers’ daily life. Mintel research reveals that more than three in five (61%) urban Chinese consumers* say that they shop at convenience stores several times a week, and 15% shop there more than once a day—those consumers that Mintel has classified as heavy shoppers. Meanwhile, just 2% of Chinese respondents say that they have not shopped at convenience stores in the last six months.

In addition, Chinese consumers do not just go to c-stores for shopping. A large number of Chinese respondents like to walk around in convenience stores without buying anything (45% of respondents overall vs 59% of heavy shoppers**); more than half of respondents like to eat inside convenience stores if there are seats available (50% of respondents overall vs 58% of heavy shoppers).

“Convenience stores are now a must in urban Chinese consumers’ everyday life and we see bright prospects for the future development of the market. In addition to dealing with the daily needs of consumers, convenience stores are places where consumers are willing to visit to kill time and have a quick meal. This suggested an opportunity for convenience stores to strengthen their social functions and provide a relaxing ‘third space’ in cities. With Chinese consumers’ willingness to eat inside c-stores, we’ve seen that more of these retailers are creating in-store seating areas to allow customers to wait for friends or just take a rest.” Chih-yuan continued.

Themed stores and new products boost appeal

Finally, Mintel research reveals that young and female consumers show more favour towards themed convenience stores. Over half (54%) of urban Chinese respondents like convenience stores decorated in different themes. Of this, nearly three in five (57%) female consumers claim that they prefer themed stores, compared to half (51%) of male consumers; while 62% of post-90s respondents say the same thing about themed c-stores, surpassing that of post-80s (55%) and post-70s (46%) consumers.

Meanwhile, a total of 56% of Chinese respondents say that they like to try new products in convenience stores, skewed towards post-90s (62%) and female consumers (60%).

“Our research shows that female and post-90s consumers show a clear preference for themed convenience stores rather than those in a unified standard. Catering to the fever for experience shopping, convenience store brands could consider introducing themes stores and limited-edition products to attract consumer footfall, as well as differentiate themselves from competitors. Manufacturers could also consider establishing strategic collaborations with c-stores, including launching limited-edition exclusives in certain convenience stores, as consumers, especially young and female consumers, are keen to try new products in c-store channel.” Chih-yuan concluded.

*3,000 internet users aged 20-49, March 2019
**456 heavy shoppers aged 20-49