Creation: Proletarian Liberation Struggle Association Historical Materialism Group
In recent years, a new type of chain snack shop characterized by bulk sales—bulk snack stores—has gradually emerged from the leisure snack market. According to the “2023 China Snack Bulk Industry Blue Paper,” the market size of China’s bulk snack industry expanded from 900 million yuan in 2017 to 40.7 billion yuan in 2022. In just one year, by 2023, the market size doubled again to 80.9 billion yuan. Among them, 2017 to 2022 was a stage of explosive growth for the snack bulk model, “growing rapidly at a compound annual growth rate of 114.6% over five years,” especially between 2022 and 2023, when snack stores featuring the bulk snack model grew wildly across the country, especially in the outskirts of city centers and third- and fourth-tier cities. According to iiMedia Consulting, by the end of 2021, there were about 2,500 bulk snack stores in China, and by the end of 2023, this number had reached 25,000, with an expected surpassing of 30,000 by 2025. Among these, two giant monopolistic enterprises—“Mingming is Very Busy” [1] and “Wancheng Group” [2]—hold a dominant share. The intense market division between these two giants has even led to the saying “South is Very Busy, North is Wancheng.”
Driven by the development of these major giants, many bulk snack stores have sprouted on commercial streets in major cities, especially in second, third, and fourth-tier cities, like seeds germinating—such as “Wife’s Big,” “Snacks are Very Busy,” “It Seems Like Coming,” etc. These stores claim slogans like “Good snacks are very cheap,” “Affordable, money-saving,” “Good quality at a low price,” and even claim “Cheaper than online shopping” to attract consumers. Lianhe Zaobao also reported that their reporters “visited many snack stores and found that their prices are on average about 25% lower than supermarkets.” For example, a 52-gram bag of “Want Want” rice crackers costs 6 yuan in general supermarkets; only 4.5 yuan in bulk snack stores; 4.8 yuan on Pinduoduo, but requires purchasing 10 packs.
From the self-praise of stores and the reports of bourgeois media, the secret to the success of bulk snack stores seems to lie in their ability to grasp market trends and meet people’s needs. However, does the rise of bulk snack stores truly reflect the surface? What exactly does “good quality at a low price” mean? According to visits by Lianhe Zaobao reporters, the reason why bulk snack stores can offer low prices mainly lies in their “super suppliers” and the fact that stores have established a “large sales network,” enabling large-scale procurement, directly bargaining with upstream suppliers to ensure lower purchase prices than other channels. From a bourgeois vulgar perspective, the secret of their success mainly lies in “small profits but quick turnover” and “strong supply channels.” “Small profits but quick turnover” is a common business strategy. Because within the same commercial sector, capital divides surplus value in a particular way, the turnover rate of each commercial capital has a decisive impact on its annual profit rate. Therefore, “merchants with faster capital turnover can sell at slightly lower prices in competition without reducing their profits below the average.” This business strategy is widely used in the retail industry. However, relying solely on the strategies of bulk snack enterprises cannot lead to the conclusion that their prices are low enough to achieve “meteoric rise.” Otherwise, why haven’t traditional department stores and snack industries, which have faced widespread closures in recent years, rebounded accordingly? If the problem only lies with suppliers, why haven’t traditional retail sectors, facing bankruptcy crises, done everything possible to win over them? In reality, the “model enterprises” of the bulk snack industry maintain a certain monopoly power through dirty exploitation under certain conditions, thus achieving “success.”
From the data above, China’s bulk snack industry market size was originally very small, mainly because the retail market was dominated by monopolistic department store giants, making it difficult for bulk snack stores to establish themselves in retail. However, due to the severe economic crisis during the pandemic and the impact of the national economy’s pandemic measures, the working people suffered extremely brutal and savage exploitation, leading to widespread poverty, unemployment, forced testing fees, and even quarantine, which severely worsened the impoverishment of the proletariat. This has intensified the contradictions between production and consumption under capitalism, shrinking the demand for the working people’s purchasing power. This dealt a heavy blow to traditional department store sectors. Meanwhile, the emerging online shopping industry developed rapidly, quickly seizing the market share of traditional department stores that had not yet stabilized under certain shocks. As a result, many enterprises in the traditional department store industry have seemingly entered a winter, with numerous closures in recent years. Data shows that from 2020 to 2022, Walmart closed more than 60 stores domestically, and in 2023 alone, Walmart closed stores in Changchun, Shaanxi, Jiangxi, Shandong, Beijing, and other places; over the past three years, Yonghui Supermarket also closed nearly 400 stores. These historical conditions provided some space for enterprises mainly engaged in bulk snacks to develop. Therefore, during the massive closures of traditional department stores from 2022 to 2023, the market size of the bulk snack industry nearly doubled. However, these are only external factors of the rapid development of the bulk snack industry; there are more important underlying reasons.
Almost all enterprises in the bulk snack industry adopt strategies of “small profits but quick turnover” and “expanding store openings.” The “Mingming is Very Busy” group, formed by the merger of “Snacks are Very Busy” and “Zhao Yiming Snacks” last November, now has over 10,000 stores nationwide. As the only listed company in the bulk snack industry, Wancheng Group’s brands include “Hao Xiang Lai” and “Wife’s Big,” with store numbers exceeding 9,000. Most of these stores, except a few located in first-tier big cities and city centers, are distributed in second, third, and fourth-tier small and medium cities, even in counties and towns. The reason is that in large cities, traditional monopolistic supermarkets and commercial complexes still hold significant positions, and bulk snack companies find it difficult to compete with them. At the same time, bulk snack companies mainly target “affordable, large-quantity” small snacks, which are not luxury consumption aimed at the bourgeoisie, worker aristocrats, or wealthy petty bourgeoisie living in large cities. However, in second- and third-tier small and medium cities, bulk snack companies with certain monopoly power that can lower prices through monopolized procurement channels can easily crush small retail businesses and small vendors (small shops) through price wars, broadly plundering the markets of these classes and strata. As a result, in counties and towns, small shops with strange names and little fame have been closing down one after another, replaced by new chain snack stores like “Wife’s Big” and “Hao Xiang Lai.” Additionally, due to the severe impact of the economic crisis, many petty bourgeoisie are in very unstable financial situations, preferring to spend and enjoy in such chain snack stores rather than in luxurious malls in city centers. This also forms part of the market foundation for bulk snack enterprises.
Besides the numerous factors favorable to bulk snack enterprises’ competition with other small retailers and small producers, it must be pointed out that the profits of commercial capital also come from the surplus value created by the working class. These profits are not simply obtained through commercial markups, meaning they are not just about adding a certain amount to the original price of goods as bourgeois vulgar economics claims. Although commercial labor does not create surplus value, commercial capital ultimately relies on dividing the surplus value created by industrial workers to sustain capital accumulation. This process is carried out by commercial workers. The more labor commercial workers contribute, the more surplus value they share, and the higher the profits. In second- and third-tier small and medium cities, the secret to the “getting rich” of bulk snack enterprises lies in savage exploitation of workers. Marx pointed out that wages are a form of the transformation of labor power value or price, which depends on the value of the necessary living materials to reproduce labor power. Due to various reasons such as price levels, labor value in small and medium cities is generally lower than in large cities. Therefore, bulk snack enterprises act like wolves targeting workers in these smaller cities. They treat workers with extremely harsh working conditions, extremely low wages, and very strict working hours, extracting profits layer by layer. In some counties or small towns, wages at bulk snack stores can be as low as around 2,000 yuan. These enterprises are precisely using this method to get rich. However, while they are paving the road to success, they are also digging their own graves.
Under heavy suppression from bulk snack giants, many small and medium retail businesses and small vendors have gone bankrupt, leading to increased unemployment among workers and many small business families falling into the ranks of the proletariat. Under the brutal exploitation of bulk snack companies, workers’ economic conditions continue to worsen. The absolute impoverishment of the proletariat deepens, and many petty bourgeoisie go bankrupt due to China’s economic depression. All these exacerbate one of the inherent contradictions of capitalism—the trend of infinite production expansion versus the decreasing ability of the working people to pay. Data shows that although the market size of the bulk snack industry has continued to grow in recent years, the growth rate is actually shrinking and trending downward. Due to the crisis of overproduction of goods, the major monopolistic giants compete fiercely in price wars to realize profits quickly, but to no avail. For example, according to Wancheng Group’s 2023 financial report, its revenue reached 9.293 billion yuan, a year-on-year increase of 1592.03%, but its net profit attributable to the parent was a loss of 82.92 million yuan, down 273.72% year-on-year, marking its first loss since 2014. It is evident that retail enterprises built on brutal exploitation of surplus value of workers and on grabbing the wallets of petty bourgeoisie and proletariat, even if temporarily “prosperous,” can only be fleeting.
In fact, Lianhe Zaobao reporting this news only shows that it is too slow. This news was already analyzed in June 2024, and then in July-August, mass snack stocks爆雷. This article from Lianhe Zaobao is just reheating old news, two versions behind.