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China: Meituan opens its first brick-and-mortar discount store in Hangzhou

Online Retail Chain Meituan opened its first discount store in Hangzhou, China. The discount format has the brand name is "Happy Monkey". The Happy Monkey store covers an area of less than 1,000 square meters, and there are currently more than 1,000 cost-effective essential food products.


According to the Qianjiang Evening News, Happy Monkey will take the opening of the first store as an opportunity to continue to optimize and build, and continue to meet the consumer needs of the community for three meals a day with high quality and deep discounts.


On the same day, Alibaba's Hema Affordable Community Supermarket, Hema NB was officially renamed "Super Box NB", and a total of 17 Super Box NB were opened in Shanghai, Hangzhou, Nanjing, Ningbo, Shaoxing, Suzhou, Nantong and other places on the same day.


"As of the end of August, the overall number of Superbox NB (including the original Hema NB stores that have been renamed) has approached 300." According to the person in charge of Hema, Hema NB has opened street-facing shops in Jiangsu, Zhejiang and Shanghai residential communities in the past two years, with an area of 600 square meters or 800 square meters, which also serves three meals a day for families, and the business categories cover about 1,500 products in four categories: fresh, sustainable, standardised and frozen products.


A person close to Hema told Phoenix WEEKLY Finance that NB's new format can be regarded as it has entered a mature stage from the incubation and cultivation period, and will enter a stage of rapid development as an independent brand.


A day later, on August 30, JD.com opened four discount supermarkets in Suqian, Jiangsu Province at the same time, with four new stores covering an area of more than 5,000 square meters, covering more than 5,000 SKUs (the smallest unit for managing and tracking commodity inventory) such as daily necessities, fresh food, FMCG, and alcoholic beverages.


The four JD discount supermarkets showed strong attraction on the first day of opening, receiving more than 300,000 customers in a single day, and launched flow restriction measures since opening at 9 a.m. and lasted until 0:30 a.m. At the same time, the popularity of discount supermarkets has also brought huge customer flow to shopping malls, and the four JD discount supermarkets have attracted more than 3 - 4 times the daily customer flow for their shopping malls.


According to the person in charge of JD.com Discount Supermarket: "JD.com has not recently entered the hard discount track, as early as more than a year ago, JD Huaguan Discount Supermarket has carried out a pilot in Fangshan, Beijing, and opened two stores in Fangshan and Doudian, Beijing." Previously, the first store of JD Discount Supermarket in China opened in Zhuozhou, Hebei Province on August 16, which also triggered an offline consumption boom.


For a time, the competition between Meituan, Alibaba, and JD.com, the three leading Internet companies, extended from takeaway to offline retail, and "hard discounts" would be the next outlet?


It is a minimalist business that does not sell the deadline

Speaking of "discount retail", the first thing that more consumers think of is discount stores such as Good Sale and Hi Special Purchase.


Founded in 2020, Good Sale has achieved a magnificent turnaround from a start-up to an industry leader in just a few years. According to public information, as of July 2025, the number of its stores has exceeded 950, and its annual sales have soared 200 times to 10 billion yuan in three years.


Zhang Ning, the founder of Good Sale, revealed to "Tianxia Netshang" in 2024 that 60% of the supply of Good Sale is tail goods, mainly from brands, first-level dealers or brand-designated dealers (tail products may have expiration problems), and the other 30% are some goods produced by surplus production capacity, packaging replacement, IP authorization expiration, etc., plus a small number of OEM products.


Behind the rapid growth of good sales is the booming discount retail market

According to the "2025 China Retail Industry Outlook", the size of China's hard discount market has exceeded 200 billion yuan in 2024. Looking at the world, data released by consulting firm Nielsen IQ shows that the incremental sales share of global discounted products will increase by $6.11 billion in 2024, and the global discount retail channel will increase by 8.2%, second only to social e-commerce (such as Douyin and Kuaishou) and discount e-commerce (such as Pinduoduo).


"Traditional supermarket procurement is mainly through dealers and distributors. Under such a distribution system, a lot of commodity circulation costs have been increased, and after the middlemen have increased the price layer by layer, the pricing of the goods is higher, and a complex distribution relationship has also been formed. Bao Yuezhong, chairman of Baum Enterprise Management Consulting, mentioned that unlike "soft discounts" to achieve low prices through the sale of tail goods and expiring food, hard discounts are closely connected through supply chain optimization to achieve sustainable low prices.


"We often talk about triple drive, that is, the actual cost of manufacturing may only account for about 30% of the price of goods." Marc Houppermans, executive partner at DRC Discount Retail Consulting GmbH and former Aldi manager revealed that most of the rest are occupied by advertising, endorsements and other expenses. Most consumers prefer to buy the product itself rather than the brand premium.


Choosing to cooperate directly with manufacturers and eliminate intermediate price increases can achieve price breakthroughs under the premise of ensuring quality and complete the commercial closed loop of "de-premiumization".


The person in charge of JD.com Discount Supermarket said that backed by JD.com's strong supply chain system, JD.com Discount Supermarket has achieved direct procurement and direct delivery of a variety of characteristic commodities, superimposed on the development of its own private label brands, and eliminated the premium of intermediate links to the greatest extent.


Not only in the supply chain, but behind the ultra-high cost performance is the difference from the traditional minimalist business model.


"In addition to optimizing the supply chain at the source of goods to reduce costs and lightweight packaging, the store also follows minimalism from the way employees work to the decoration style." The person in charge of Hema told Phoenix WEEKLY Finance that Hema has also effectively controlled costs through standardization, digitalization, and AI intelligence, and actively lowered gross profit, and finally presented customers with high-quality-price products.


Hema NB's strategy of achieving lower prices through its own brand has begun to bear fruit. According to the financial report, Hema's GMV (total merchandise transaction value) in the first quarter of fiscal year 2026 reached 75 billion yuan, achieving annual profit for the first time, of which fresh and NB formats contributed more than 80% of revenue.


Competition is still outside the price

This is not a business war with "low price" as the only criterion, in DRC Discount Retail Consulting executive partner William Snollaerts view, this is a comprehensive test of merchants' ability to select and control products, supply chain capabilities and service capabilities.


In fact, in 2024, Hema NB has competed with German hard discount retail company Aldi in the Shanghai community discount track.


Aldi focuses on the advantages of business districts, minimalist SKUs and supply chains, while Hema NB relies more on residential concentration areas, category diversification and big data technology advantages.


The interview with "Phoenix WEEKLY Finance" found that at present, Happy Monkey, Super Box NB, and JD.com Discount Supermarket all adhere to "high quality and low price", and the target population covers migrant workers, young people, the elderly and small families.

"This strategic positioning is more suitable for contemporary Chinese families, that is, the scale is getting smaller, the mainstream family structure of three has weakened the dependence on large-sized goods, and the Chinese people have always preferred fresh ingredients and have fewer hoarding habits." The person in charge of a traditional supermarket told Phoenix WEEKLY Finance that from the current point of view, the three have certain differences in business positioning.


Super Box NB has about 1000 - 1500 SKUs, and the business area is controlled at 1000 square meters, continuing the previous style of play, which belongs to small and medium-sized supermarkets; JD Discount Supermarket focuses on "large store type and multiple SKUs", with a business area of more than 5,000 square meters and more than 5,000 SKUs.


"Compared with the scale of traditional supermarkets of tens of thousands of products, they all maintain the ultimate restraint." In the view of the person in charge of the above-mentioned traditional supermarket, the above-mentioned three, or the same as the previous community hard discount retail play, while maintaining the stability of core products, through quarterly updates of basic models and seasonal new products, to achieve a dynamic balance of the commodity structure.


"For e-commerce platforms, opening offline discount stores can help increase new channels to reach consumers." William Snollaerts said that the supply chain, brand, and data advantages of e-commerce platforms are what traditional supermarkets need to catch up, "Relying on the massive data accumulated online, e-commerce platforms can more accurately analyse the needs of regional consumers, so as to support the accurate selection of products and rapid product iteration of offline stores." ”


Marc Houppermans said that relying on data technology to accurately predict consumer demand, optimize inventory management, reduce losses, and rely on strong cold chain distribution capabilities to achieve efficient circulation of fresh goods.


It is worth noting that the hard discount track is on the rise, not only on e-commerce platforms, but also on traditional retail represented by Wumart is also turning to hard discount formats.


"The key to the 'hand-to-hand combat' of the community discount business is who can better balance cost, efficiency and consumer experience." The above-mentioned person close to Hema told Phoenix WEEKLY Finance that it is difficult to say who is "dominant" at present, or will jointly promote hard discount retail into a new stage.



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