Summary of Key Points
Fresh snack brands such as Jiduoquan, Jinlimen, and Yili are seizing prime locations in shopping malls (on the ground floor facing streets or near B1 subway entrances). Both malls and brands have their own priorities in this partnership: brands rely on these high-traffic areas to gain a competitive advantage, while malls bet on them to attract new customers. However, the future of this industry is uncertain. The underlying demand for fresh, ready-to-eat snacks is real, but the business model of these brands—offering a wide range of products in a single store—is not yet proven successful overseas. It will depend on whether they can establish strong supply chain barriers to differentiate themselves from competitors. Malls should be cautious when attracting new tenants, avoiding panic and following trends, and focusing on issues such as the supply chain, impact on existing business formats, and risk management.
I. Fresh Snacks and Malls: A Win-Win Partnership
The collaboration between fresh snack brands and malls is essentially about meeting mutual needs:
- Brands choosing locations: They target areas with the highest foot traffic, as these snacks are often purchased impulsively while shopping or commuting. Short-lived, cooked products (such as freshly roasted chestnuts and marinated meats) and freshly made desserts require a steady stream of customers. Therefore, brands compete for prime spots in malls with large footflows, such as the B1 subway entrance of Heshenghui in Chaoyang, Beijing (with over 200,000 visitors per day), or the ground floor facing streets in Wanshangcheng in Hangzhou.
- Malls choosing brands: Different malls have different requirements:
- Top-tier malls (like Heshenghui) seek brands that can attract large crowds; for example, Yili’s freshly roasted chestnuts have led to long queues, boosting overall foot traffic in the area.
- Core business districts (such as IFCX in Nanjing) value uniqueness; Jinlimen’s first store in East China sold 1 million products within three days, increasing mall foot traffic by 50% and creating a sense of exclusivity.
- High-end malls (like Wushang Mall in Wuhan) aim to appeal to younger consumers by featuring trendy brands that reflect quality and popularity.
- Malls with supermarkets (such as Jinhua T11) want to revitalize existing snack areas; for instance, Pumama’s transformation increased monthly sales from 500,000 to 1.8 million yuan, quadrupling the regional revenue.
II. How Far Can This Industry Go?
The underlying demand for fresh snacks is genuine, but the business model needs to be proven:
- Genuine demand: As incomes rise, people are willing to spend more on convenience and quality—Japanese convenience store snacks (which emerged in the 1970s and are now a major profit driver) and Sam’s roasted chicken (a popular attraction) are examples of this trend. Similar trends are seen with domestic brands like Hema and Pangdonglai.
- Questionable business model: The model of combining baked goods, marinated meats, nuts, and milk tea in one store has no successful overseas precedents and may be more of a unique Chinese innovation. Brands that rely solely on the novelty and exclusivity of their products risk being quickly copied. Only by establishing strong supply chains and barriers (e.g., through cold chains and local manufacturing) can they become a stable market force, similar to the success of new tea drinks.
III. Future Trends: A Battle Among Four Forces
The fresh snack industry will not see a rapid expansion like the instant snack sector, but it will gradually be dominated by a few leading brands:
- Slow expansion of top brands: Brands like Yili, Jiduoquan, and Jinlimen currently have only 250 stores and could potentially dominate a 40-50 billion yuan market within 3-5 years with their advanced supply chains (e.g., Jiduoquan’s 20 production bases and three-tier cold chain system).
- Regional brands gaining traction: Some brands, like “Youdian Tuanjian,” are investing in smart cold chain systems to deliver fresh products within 6 hours and becoming regional leaders.
- Cross-industry players entering the market: Brands like Juewei, Chayanyuese, and Youyou Food are testing the waters, but capital is still cautious (with top brands valued at 2-3 billion yuan before they enter the market).
- Supermarkets making moves: Retailers like Yonghui are opening “fresh snack sections,” and others like Darunfa and Sanzhisongshu are collaborating on mini-exclusive counters to compete in this market.
IV. Malls Need to Manage Risks Cautiously
When attracting tenants, don’t just follow the crowd; consider these three key questions:
1. Can the supply chain meet demand? If a brand doesn’t have local production within 300 kilometers, short-lived products won’t be able to rotate quickly, leading to store closures.
2. Will it disrupt existing business formats? Fresh snacks may attract customers away from other nearby businesses, potentially reducing overall rent revenue.
3. Will competitors poach customers? If a brand doesn’t get the desired location, they might move to a competitor’s mall, so the impact must be carefully assessed.
It’s also crucial to manage risks: use short lease terms and penalties for top brands, require deposits and exclusivity agreements for follow-up brands, and encourage supermarkets to offer their own fresh snack options to diversify revenue streams.
Conclusion
Fresh snacks are just one candidate for attracting customers in malls. Don’t rush into decisions; take the time to consider these issues carefully to avoid leaving a mess when the trend fades. For malls, each lease is an opportunity, and rational decision-making is key to surviving market fluctuations.