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China’s discount sector rises
A combination of COVID lockdowns and a slowing economy is contributing to the growth of discount stores in China that specialise in selling food near its expiry date.
More new businesses operating in this area have opened in the past 12 months than in the past ten years, according to figures cited by the Financial Times. Meanwhile, one leading company, HotMaxx, has increased staff numbers 20x since COVID hit in January 2020 and reportedly has plans for multiple new stores (a 7x increase to 4,500 within the next three years).
Why it matters
In late 2021, a survey by iiMedia found that two thirds of people buying discounted food and drink close to expiry dates fell into the middle-income category – an indication of how focused even relatively well-off consumers are on saving money where they can. One industry estimate suggests the market will be worth RMB 36bn this year.
One discount store executive claims brands are looking to work with them while adding that consumers themselves aren’t choosy. “If we don’t have Coke, we will give you Pepsi,” he said.