The "hard discount" supermarket sector in China
Round Table China
Jan 02
The "hard discount" supermarket sector in China
The "hard discount" supermarket sector in China
Round Table China
Jan 02
In cities across China, a new kind of supermarket is gaining ground—not with flashy displays or endless aisles, but with stark simplicity and unbeatable prices on basics like rice, oil, and water. These hard discount stores are redefining what consumers expect from grocery shopping, but their lean model raises questions about sustainability and trade-offs behind the savings.
Hard discount supermarkets in China are transforming retail by offering essential goods at ultra-low prices through extreme operational efficiency. By eliminating frills, reducing staff, limiting product ranges to around 1,000–1,500 SKUs, and negotiating long-term contracts with suppliers, these stores minimize costs and pass savings to consumers. Their focused selection simplifies shopping and strengthens supply chain control, while private labels and streamlined logistics further cut expenses. Despite achieving over 200 billion yuan in sales in 2024, the model faces challenges including low profit margins of 10–15%, rising operating costs, and consumer demand for variety. There's also concern that some retailers may compromise quality or compliance to sustain rock-bottom pricing, signaling potential risks beneath the surface of this rapidly growing sector.
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Hard discount stores keep product offerings lean to improve supply chain efficiency and reduce inventory costs.
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Fewer choices simplify shopping and reduce costs for consumers.
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Stores display products directly from shipping containers to save on storage and handling.
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Extremely low prices may indicate compromised quality or illegal practices
