The Snack Bulk Sales War Across Ten Thousand Stores: The Future of Chinese Retail Churning Beneath the Surface

AI·Wancheng and Mingming Very Busy’s Strategic Differences and Their Impact on Industry Landscape

The proliferation of discount snack stores, or snack wholesale outlets, has become a new favorite among investors. Recently, Goldman Sachs initiated coverage on two leading domestic snack wholesale giants, Wancheng Group and Mingming Very Busy, with projected upside potentials of 23% and 33%, respectively.

Currently, their stock prices are close to 200 RMB and about 400 HKD. Wancheng Group’s latest market capitalization is approximately 26.8 billion RMB, while Mingming Very Busy is valued at around 88.1 billion HKD. Although their concepts are similar, there are significant intrinsic differences.

In an era where brand premiums are waning and efficiency premiums are rising, what does discount retail represent? On this track, native players like Mingming Very Busy and transformation players like Wancheng, represented by Wancheng, are betting on different futures and each lack certain advantages. Wancheng’s recent annual report will serve as our entry point.

1. The True Reason Behind Strong Performance: Focusing on Efficiency

Over the past year, Wancheng Group delivered an almost “flawless” performance:

In 2025, revenue reached 51.459 billion RMB, nearly 60% year-over-year growth, with the wholesale snack segment contributing 50.857 billion RMB; net profit was 2.533 billion RMB, with a net profit margin of 4.98%. Net profit attributable to shareholders increased more than threefold. The company operates across 30 provinces with 18,314 stores, forming a stable discount retail network.

According to data from the first three quarters of 2025, Mingming Very Busy expanded its store base to over 20,000 through regional brand mergers, with GMV around 66.1 billion RMB and profit reaching 1.81 billion RMB, with profit growth exceeding double.

One company reports 50 billion+ in wholesale snack revenue, the other over 60 billion GMV as a discount leader; both are rapidly expanding profits, which is unlikely to be coincidental. Instead, it reflects the synchronized realization of underlying logic across different companies.

Wancheng’s total revenue of 51.459 billion RMB is mainly from wholesale snacks, with its original mushroom business providing cash flow but with limited impact now.

Its net profit of 2.533 billion RMB, with a margin below 5%, may seem unremarkable. However, for discount formats characterized by low margins and high turnover, this is a healthy sign: the company isn’t boosting gross margins through storytelling but reducing costs and increasing turnover to earn efficiency margins.

Brand integration is also noteworthy. In 2023, Wancheng unified multiple brands under “Hao Xiang Lai” and incorporated regional brands like “Wife’s Big” — a move that appears to be brand unification and store rebranding but actually consolidates supply chain and channel control:

Procurement negotiations now require a unified front upstream, consumer recognition is built under one name, and IT systems, inventory management, and operational standards are restructured at the group level. This integration treats stores as network nodes rather than independent small businesses.

All these points indicate that Wancheng has shifted from a “product-selling company” to an “efficiency-driven company.”

Traditional retail focused on brand storytelling, building premiums on emotion and aesthetics; now, discount retail compresses premiums to the minimum, emphasizing supply chain integration, logistics density, and store turnover. The impressive performance essentially signals that the efficiency engine has entered a stable operational phase.

Because of this, Wancheng’s annual report reads less like a “company success story” and more like an “industry manual”: as long as you focus on wholesale snacks, accept short-term low net margins, and invest sufficiently in supply chain and systems, the discount model can simultaneously grow revenue and profit.

2. The Macro Soil of Discount Retail: A Resonance of Three Ends Creating a Good Business

Any company’s rise depends on the macro environment. Discount retail is the result of synchronized changes across supply, demand, and channels.

On the supply side, industry-wide overcapacity turns surplus and near-expiry goods from occasional issues into regular resources. Brands push for scale and shipment data, channels push to meet targets, continuously pushing goods to the end stores. As a result, some products miss optimal sales windows and become inventory to be “disposed of.”

Discount retail transforms this often-muddled or shameful inventory into a formal supply chain: standardized recycling mechanisms, fixed channels, and clear pricing strategies. For brands, this adds a safety valve; for channels, it secures low-cost sources.

On the demand side, consumer psychology is undergoing structural change. Young consumers are less willing to pay high premiums for logos; identity-driven consumption is declining, and rational consumption is becoming a long-term trend.

But “rational” doesn’t mean frugal; it means rejecting overhyped premiums and valuing “delicious, fun, cheap, and plentiful” experiences. Shelves piled high, eye-catching price tags, and bulk promotions in discount snack stores are essentially real-life “bargain hunting games.”

Shoppers may not be obsessively penny-pinching, but they enjoy the psychological satisfaction of “getting a big bag for less,” creating a new emotional value.

On the channel side, rising costs of online traffic are well-known. Selling low-priced goods online often costs more in traffic than the margins earned. Offline stores, after several rounds of rent and labor cost restructuring, can be profitable if store efficiency and turnover are high enough.

Under these conditions, the “two lows and one high” model of offline discount stores becomes feasible: low gross margin makes prices attractive; low expense ratio leaves room for profit; high turnover allows volume profits within limited margins.

This explains why, on the same supply chain, e-commerce and offline discount stores are not simply substitutes but complement each other.

E-commerce suits planned purchases and long-tail products—when consumers know what they want, online ordering is easiest. Offline stores cater to impulsive, immediate needs like “snacking while passing by,” offering “visible, touchable cheap shelves.” The former appeals to rational logic; the latter combines randomness and shopping fun.

3. Valuation Lagging Behind Mingming Very Busy: Hong Kong Stocks Favor New Entities

On this macro foundation, players generally fall into two categories: purebred discount players built around wholesale snacks and discount models from traditional snack chains or supermarkets that have transitioned into the discount track.

Mingming Very Busy exemplifies a purebred player. Through regional brand mergers, it rapidly expanded to over 20,000 stores, with GMV reaching 66.1 billion RMB and profit about 1.81 billion RMB, with profit growth over two times.

This scale sets two key coordinates: one is size—at 20,000 stores and 600+ billion GMV, bargaining power in supply chains shifts from “buy cheaper” to influencing factory strategies, securing priority for new product launches, customizations, and expiring stock handling; the other is profitability—showing that discount formats can move beyond burning cash for scale into a “growth + profit” mid-stage.

Within this framework, Wancheng’s differences are more about path and purity.

Wancheng is a typical transformation player, originally with a more diversified business structure, later consolidating brands and resources to push wholesale snacks into a 50-billion-level business.

Its advantage lies in extensive existing channels and supplier relationships, providing a solid base for nationwide expansion; its disadvantage is less pure business model compared to Mingming Very Busy, with internal resource conflicts across different segments and systems needing to accommodate multiple formats.

Purebred players benefit from resource focus—everything from store location, display, procurement to systems and performance evaluation is tailored for discount business. Capital markets tend to assign higher valuation premiums to “pure stories” because they are easier to understand and benchmark, often comparing to leaders like Mingming Very Busy.

Additionally, Mingming Very Busy’s listing in Hong Kong coincides with global interest in the wholesale snack sector. Hong Kong IPOs for consumer companies often emphasize growth and industry ceiling, leading to over-subscription ratios near 2000x, reflecting intense capital demand. Similar to how Xuexue Bingcheng’s limited float caused share prices to surge upon listing, Mingming Very Busy enjoys global capital favor and premium valuation.

The “leader logic” is akin to Moutai’s long-term market cap of 17-25 trillion RMB, with Wuliangye around 400 billion RMB—despite a revenue gap of only 2x (2024 revenues: Moutai ~174.1 billion RMB, Wuliangye ~89.1 billion RMB), their market cap difference is 4-6x. This reflects the future potential of pricing power, product definition, and industry concentration, which will continue to command premiums.

4. From Snack Battlefield to Community Discount Infrastructure: Flipping Miniso

Currently, all main players—whether Mingming Very Busy or Wancheng—appear to focus on “wholesale snack” stories: who has more stores, broader product categories, higher store efficiency. But in a longer-term view, snacks may only be the first battlefield; the ultimate goal is “community discount infrastructure.”

If we roughly segment industry evolution, a clear path emerges. Initially, it’s a scale war: whoever opens stores first and captures shopping centers and community hubs gains upstream attention. Next comes price wars: through larger procurement and aggressive cost control, they create a “cheap feeling” advantage. Small and medium players unable to keep up will soon exit due to margin pressures.

As industry concentration increases, it enters an oligopoly stage. Here, store count is no longer the sole metric; supply chain depth, private label capabilities, and logistics density become critical. True oligopolists will outpace latecomers in these areas, not just by opening more stores. Mingming Very Busy today exemplifies this: large scale, profit beginning to emerge, supply chain capable of reverse customization.

Further down the line, the industry chain itself transforms. Discount stores extend beyond snacks into daily necessities, personal care, home goods, evolving from “snack stores” into “community warehouses for everything.” At that stage, discount stores, e-commerce, and instant retail will redefine household consumption traffic: daily essentials may be pre-locked by discount stores; e-commerce handles non-urgent, non-standardized needs; malls focus on experience and social interaction.

Compared to current retail, Huang Zheng, founder of Pinduoduo, wrote a famous article titled “Turning Capitalism Upside Down,” describing how internet data and consumer demand influence upstream production. Today, discount retail is essentially reversing the traditional premium model—similar to Miniso.

Miniso’s business builds on affordable prices with added emotional value through IP collaborations (Sanrio, Disney, Barbie) and store experience upgrades, raising average transaction value and margins. Its core strategy overlays emotional appeal on cost performance, prompting consumers to pay a slight premium for aesthetics and fun, while ensuring product quality—by aggregating supply chains for self and customer benefit.

Wholesale snack stores, on the other hand, pursue the opposite: extreme de-premiumization—reducing brand advertising costs, simplifying packaging, shortening circulation, and pricing products at 60-70% of traditional channels. Miniso relies on co-branded collaborations to boost premiums; wholesale snacks rely on private brands to eliminate premiums. The former is white-label + IP = brand; the latter is brand - premium = white-label.

Looking at Aldi’s development, when power shifts from brands to channels and efficiency replaces premiums as the core, wholesale snacks exemplify not just business model innovation but a fundamental reconfiguration of retail production relations. Once completed, this shift will irreversibly alter China’s consumer logic.

In five years, will we still call these companies “wholesale snack stores,” or will we see them as the most essential community infrastructure, as commonplace as water, electricity, or broadband? The answer will determine not just company valuations but the fundamental nature of China’s offline retail landscape over the next decade.

Source: Songguo Finance