The convenience store has completed its warehouse capacity upgrade.

After the food delivery war, the competition among big tech giants has spread to the convenience store track.

Since entering the market last October, Taobao Convenience Store has launched more than 700 outlets, raising its store expansion target twice within half a year and continuously increasing its investment on the initial goal of 1,000 stores. On the other side, Squirrel Convenience Store under Meituan is also going all out, with more than 700 outlets opened covering 76 cities as of March this year, and sources say it is sprinting for 1,500 stores within the year.

However, according to Alphaboard's understanding from people close to Meituan, Squirrel Convenience Store has not set a store opening number target this year.

The convenience stores that the giants are competing for are not the same format as the familiar 7-Eleven, but "warehouses" disguised as convenience stores.

Most of these convenience stores are hidden in non-street-front shops two kilometers away from business districts, operating purely online 24 hours a day, and do not even have eye-catching signs. But compared with 2000-3000 SKUs of traditional convenience stores, this type of convenience store can reach 5000-10000 SKUs, covering food and beverages, daily necessities, beauty and personal care, 3C digital products, maternal and child supplies and other categories.

In the past year, the fierce competition among internet giants has extended from catering food delivery to all-category retail. Integrating online convenience stores can not only complete the trillion-dollar instant retail warehouse network density for big tech companies, but also increase gross profit, undertake users' emergency consumption, and move the far-field shelves and richer supplies to warehouses closer to consumers.

In the second half of the instant retail race, whoever builds a high-density, well-supplied warehouse network first will take the initiative in the second half.

This is not the first time that convenience stores have been targeted by internet giants. In the last wave of new retail, convenience stores suddenly became a sought-after target for big tech companies and capital, with JD Convenience Stores, Tmall Small Shops and Suning Small Shops springing up, and hot money pouring into chain convenience stores like Bianlifeng and Linjia.

But in the end, the ambition of large-scale expansion was dragged down by the complexity of supply chain and operation, and the vigorous transformation movement ended prematurely.

Now, with the boost of instant retail, can the long-silent convenience store format usher in a "renaissance" again?

The answer is most likely no. Big tech companies may have no intention of competing with traditional convenience stores for business, and essentially they are competing for the warehouses hidden in the back alleys of the streets. But it is undeniable that the proximity and speed of instant retail are eroding the advantages of traditional convenience stores.

In the past, when people wanted to buy instant noodles or charging cables in the middle of the night, their first reaction was to go downstairs to find a convenience store. Now, one click on Taobao or Meituan, and the goods will be delivered to your door in 30 minutes. The giants not only maximize the "proximity" with warehouse network density, but also reuse their own product portfolio to complete the puzzle of "full category".

Traditional convenience stores not only fail to take off with this trend, but even their living space is being squeezed.

1

Under the food delivery war, giants have reached a consensus on the long-term certainty of the trillion-dollar instant retail market.

As the underlying infrastructure, warehouse network fulfillment directly determines order delivery capability, user experience and operating cost. Whoever builds a high-density, well-supplied warehouse network first will take the initiative in the second half of the race.

This also explains why the long-silent fresh e-commerce sector is hot again. From Hema's repositioning to Dingdong's sale, and Pupu's pending sale, what big tech companies value is exactly the front warehouse network of these fresh e-commerce platforms. After the acquisition, big tech companies turn them from independent players on the front warehouse track into infrastructure in the overall instant retail market, embedded in their own ecosystems.

Big tech companies have never complemented their warehouse networks through a single line of operation, but through multiple parallel paths.

The front warehouses of fresh e-commerce are the first path, which complements the high-frequency fresh category, cold chain supply chain and heavy asset fulfillment capability. But fresh food alone is not enough. Fresh food is high-frequency and rigid demand, but it is a tough business with low gross profit and high loss. The investment of a single front warehouse starts from 500,000 yuan, the fresh food loss rate reaches 8%-15%, and the gross profit margin is only 15%-20%.

Big tech companies cannot make the numbers add up only by selling vegetables. On Hema, Xiaoxiang and Dingdong, a large number of daily-use and standard commodities are added to try to increase gross profit. But in consumers' minds, there is another high-frequency scenario for buying daily necessities, emergency small items and scattered standard products, that is convenience stores.

Although compared with food delivery and fresh e-commerce, the consumption frequency of daily necessities is not that high, no matter whether Meituan wants to maintain its advantages in local life, or Taobao wants to complete the transformation to an "all-scenario consumption entry", convenience stores are an excellent carrier.

In addition, the gross profit margin of snacks, daily necessities and private label products is significantly higher than that of food delivery, which also helps to solve the long-term loss problem of big tech companies' instant retail business.

More importantly, as an extension and supplement of urban public services, convenience stores have a dense network layout covering business districts, communities, office buildings and transportation hubs.

The two sides are racing at close range, which fully demonstrates the fierce competition.

Taobao Convenience Store follows an asset-light route, fully adopting the brand authorization model. Taobao Flash Purchase clearly states to the public that the platform "does not build warehouses, does not open stores, and does not compete with merchants for profits". Existing flash warehouse merchants that meet the standards can "join with their own stores", and the platform outputs brands, traffic, digital systems and supply chain channels, while merchants retain independent operation rights.

Squirrel Convenience Store adopts a parallel model of self-operation and franchised trusteeship. As of March 2026, it has more than 100 self-operated outlets, and the rest of the stores are expanded through franchised trusteeship. Although it is also a franchise model, Meituan adopts a strongly controlled trusteeship model, in which goods procurement, pricing standards, fulfillment specifications and after-sales systems are all uniformly controlled by Meituan, and franchisees are responsible for site investment and in-warehouse management.

It is not difficult to see that in this round of competition for convenience stores, what big tech companies are competing for is not only delivery speed, but also product portfolio and store management capability.

2

This is not the first time that convenience stores have been favored by big tech companies.

In 1992, 7-Eleven opened its first store in mainland China in Shenzhen. Up to now, convenience stores have been in China for 30 years. During these 30 years, the reason why convenience stores can steadily occupy urban street corners is that they have two scarce capabilities at the same time: the instant response capability brought by being close to consumers, and the offline traffic stability brought by less impact from online channels. These two capabilities were noticed by internet giants at a glance in the "new retail" storm that blew up around 2016.

In October 2016, Jack Ma put forward the concept of "new retail" at the Yunqi Conference. Then in 2017, the convenience store track ushered in its most frenetic year. Alibaba launched Retail Link to transform mom-and-pop stores, JD shouted the bold slogan of "1 million JD Convenience Stores in 5 years", and even Suning personally entered the market to open Suning Small Shops.

At that time, what big tech companies did was to "rebrand" offline small shops. Hanging the platform's sign and accessing the online system, they tried to turn the stores into traffic entrances and experience sites for new retail. Tmall Small Shops and JD Convenience Stores sprang up across the streets and lanes.

A large amount of capital poured into the convenience store track. Bianlifeng, which opened its first store in 2017, received a total of 1.5 billion US dollars in financing in three years, with the presence of Tencent and GL Ventures behind it. Linjia and 131 Convenience Store also won the favor of capital.

But big tech companies soon found that transforming offline entities was far more complex than imagined. Light rebranding failed to touch the deep pain points of supply chain and operation, and the planned large-scale expansion failed to materialize.

In the end, JD's "million convenience stores" plan made a lot of noise but little progress. Alibaba's Retail Link was shut down in March 2024, and Suning Small Shops suffered huge continuous losses and were finally spun off from the Suning system.

Capital receded as fast as it poured in. Projects such as Linjia and 131 Convenience Store closed hundreds of stores overnight due to capital chain breaks. Bianlifeng also launched the "Hibernation Plan" in 2022, closing nearly 700 stores, and there are only more than 800 stores nationwide so far.

Several years later, giants have flocked into the convenience store track again. Can this heat up the track again?

The answer is most likely no, because compared with the last round, the logic for big tech companies to enter the market has changed. This round, what big tech companies want is "warehouses" rather than "stores". They don't want to hang a sign for mom-and-pop stores to divert offline traffic to online, but turn their stores into their own warehouses and put their own product portfolios in. In this process, big tech companies are equivalent to brand owners, and they just need to wait for franchisees to come to them.

Big tech companies will not even acquire traditional convenience store brands as they did with Dingdong. The assets in the hands of traditional convenience store brands are a burden to big tech companies. The street-front prime locations of chain convenience stores are too expensive, and big tech companies have no intention of putting their own product portfolios into these stores. The mature franchise system of chain convenience stores cannot accommodate the strong control requirements of "unified procurement and unified pricing" from big tech companies.

In this round of competition, traditional convenience stores do not even qualify to be used as "chess pieces" by big tech companies, let alone achieve renaissance with the trend.

3

On the surface, big tech companies competing for convenience stores do not mean to compete with traditional convenience stores for business, but the impact of instant retail on the convenience store business cannot be ignored.

In the past 30 years, convenience stores have survived by catering to "emergency needs". Whether you crave instant noodles at midnight, forget to bring an umbrella when it rains, or need a charging cable when your phone runs out of power, facing these sudden demands, consumers' first reaction is to go downstairs to find a convenience store. But now, one click on Taobao or Meituan, the goods will be delivered to your door in 30 minutes, and you don't even need to go out.

The "proximity and speed" advantage that convenience stores once took pride in is being disintegrated by instant retail. Now even in terms of "full category", these new online convenience stores are no less inferior.

According to the data, the scale of domestic convenience stores is still expanding, but the efficiency of single stores is declining. According to the 2025 China Convenience Store Industry Survey released by the China Chain Store & Franchise Association (CCFA) in April 2026, as of December 31, 2025, the total number of stores of the top 100 convenience store enterprises in China reached 208,000, a net increase of about 11,000 over the previous year, with an increase of 5.6%.

According to the 2026 China Convenience Store Development Report, affected by the continuous decline of passenger flow and customer unit price, the downward trend of daily revenue of Chinese convenience stores further expanded in 2025, with daily sales dropping to 4,453 yuan, a year-on-year decrease of 3.9%. For sample enterprises including Meiyijia, Tianfu, Lawson, FamilyMart and 7-ELEVEn, the number of daily visitors (person/store/day) decreased by 8.7% year on year, and the customer unit price (yuan/person/order) decreased by 0.2% year on year.

More and more stores are opened, but the passenger flow continues to decrease, which has become the current situation of the domestic convenience store industry. Facing the impact of instant retail, more and more convenience stores choose to "join if you can't beat them".

According to the survey of sample enterprises in the convenience store industry in 2025 by the China Chain Store & Franchise Association, by the end of 2025, nearly 40% of the sample enterprises have launched instant retail business; the overall instant retail sales proportion of sample enterprises is close to 40%, with a year-on-year increase of 11%.

However, for convenience stores, instant retail is a double-edged sword. While bringing incremental online orders, it further weakens the willingness of in-store consumption, leading to the shrinkage of high-premium offline scenario consumption such as coffee and cooked food, and the brand power is diluted. More importantly, platform commissions, traffic promotion fees and rider delivery costs are stacked layer by layer, and a large number of stores fall into the dilemma of "rising revenue but no rising profit".

On the other side, big tech companies are not having an easy time either. The expansion of online warehouse stores is still a subsidy war. Rent reduction, order incentives, delivery discounts... The platform relies on high subsidies to attract franchisees, and the healthy cash flow of a large number of cooperative warehouse stores is currently highly dependent on platform blood transfusion.

Once the subsidies are reduced, whether a single warehouse can cover rent, labor and sorting costs through purchase and sales price differentials will face a big test. If there is no hope of making profits, franchisees will easily operate across platforms, and the "unified product portfolio and unified control" that big tech companies long for will become nothing but empty words.

In the last wave of new retail, giants fantasized about transforming offline entities to harvest traffic, but ended up in failure; this round, giants put down their obsession with physical stores to build warehouse networks, and they also have to face the eternal exam of retail: how to find a balance between expansion speed and sustainable profit.

This article is from WeChat official account "Alphaboard" (ID: wujicaijing), written by Zhang Lin, authorized for release by 36Kr.