Here's a telling statistic: According to the China Chain Store & Franchise Association's 2025 survey, nearly 90% of supermarkets ranked "procurement model transformation" as their top priority this year, with 70% also restructuring their organizational charts. Many companies took one key step: merging procurement and operations into a single "Procurement & Sales" department. Procurement shifted from being a "stationary merchant" (waiting for suppliers) to an "active merchant" (seeking opportunities). Instead of sitting in offices negotiating slotting fees, teams now go directly to sources. Hema was among the first to make this move.

Private Label: From "Just Branding" to "Building Together"

Private-label sales in China's supermarkets and convenience stores have surpassed 3800 billion yuan, up 17% year over year. Yet penetration stands at only 9.2%—compared to 38.8% in Europe and 21.3% in the U.S. Top players like Hema and Sam's Club already exceed 30%. China Galaxy Securities forecasts a growth potential of 2 to 3 times, representing an incremental market worth approximately 100 billion yuan.

The era of simply "finding a factory and slapping on a label" is over. SuperBox's ice cream line starts with blind taste tests; recipes are refined until scores meet standards. Walmart's VocoFresh medicinal food series was developed in direct collaboration with traditional Chinese time-honored brands. Hema Matcha Baking procurement has increased 5x because the company helped establish quality control standards at the tea plantation level.

From private label to co-creation, retailers are becoming "product managers." Procurement is no longer just "sourcing"—it's "supply chain management."

Pain point for medium-sized supermarkets: Minimum order quantity is too high.

Big players can afford it—what about mid-sized supermarkets?

A mid-sized chain with annual sales of approximately 5 billion RMB wants to launch its own-brand beverage. Standard production lines require minimum orders of 10 to 30 million bottles, yet the company can only absorb tens of thousands of bottles. Insisting on small orders results in raw material and packaging costs that drive up procurement prices to match branded products, leaving no room for profit margins.

Factory selection is a major pitfall. Many enterprises lack the capability to source high-quality manufacturers, and online information is often unreliable. In the fresh produce sector, "agents" operate by embedding themselves in production areas to monitor supply conditions and assist buyers with sourcing, consolidation, and quality control. A similar role—"category brokers"—is emerging for standard products. These experts embed themselves within industrial clusters to help small and medium-sized retailers overcome minimum order quantity limits and information barriers.

New players are still joining

On 7/24, Wumart launched its new "Wumart+" format in Maodian, Beijing. Spanning over 2000 square meters and featuring private-label products with everyday discounts, the store saw shelves emptied on opening day—1.9 yuan for a bag of fresh milk and 9.9 yuan for 12 bottles of purified water.

Meituan Happy Monkey opens 7 stores across 6 cities on 6/26: Guangzhou, Jinhua, Jiaxing, Hangzhou, Tianjin, and Beijing. Total national locations now exceed 40. Our private label "Monkey Brand" offers over 300 products at prices approximately 30% lower than comparable items.

ALDI now operates over 100 stores nationwide. Hema's "Super Box" and NB are approaching 550 locations across the country. Community discount models plus private-label brands aren't just a trend—they're already happening.

Hard discount plus private labels have become the ultimate weapon for community hard-discount stores.

Hema's latest move deserves its own spotlight.

On 7/28, Hema Fresh closed 3 large stores in Beijing: the Jingkai (Yizhuang) location on 8/3, the Jinyuan store on 8/4, and the Lize store was also added to the closure list. The Haidian Yuemao store is undergoing downsizing and adjustments. These 3 stores, which opened around 2018, are between 7 and 8 years old. Meanwhile, last month Hema launched 6 new Hema Super NB mini-stores across Wangjing, Huilongguan, San Yuan Qiao, Tongzhou, Huairou, and other four or five districts in Beijing.

Closing large stores and opening small ones isn't a retreat—it's a shift in gear.Hema's total GMV reached 1070 billion yuan, up approximately 43% year over year, with adjusted EBITA positive for the second consecutive year. Closing larger stores while profitable indicates a clear financial rationale—the community hard-discount small-store model is more profitable than large-format stores.

Why can SuperBox NB compete? Two core reasons: hard discounts by cutting out middlemen, and private brands to control profit margins.

Mars, Head of NB Procurement at SuperBox, put it plainly: We're reconstructing the entire cost chain from factory to shelf by eliminating slotting fees, barcode fees, marketing costs, and multi-tier distributor margins. Take our private-label potato chips as an example: raw materials account for only 15% to 20% of total cost, while over one-third comes from channel expenses like marketing and promotion. Cut those out, and prices naturally drop.

Private label share: 60%. Combined gross margin capped at 15%. Average daily sales per store stable above 10. Nationwide store count reached 550 by end of 6, with year-end target exceeding 600. On 7/30, our first store opened in Chuzhou; expansion continues.

Site selection follows a distinct strategy: targeting residents' daily living circles rather than traditional core commercial districts. According to the head of site development for Super Box NB, the primary principle is "convenience over foot traffic," prioritizing neighborhood street-front shops and small community shopping centers. Interiors feature minimalist design with compact layouts, eliminating all unnecessary costs.

Both procurement and supply sides are undergoing reconstruction; trade shows offer the most efficient matchmaking scenario.

The supplier-retailer relationship is shifting from "competition" to "collaboration," and from "transactions" to "co-creation." Retailers need to find source factories that can develop products together, while source factories need retailers with stable orders who are willing to co-create.

The issue is low efficiency in finding matches. A month of online chatting isn't as effective as a 30-minute face-to-face meeting.

From 8 to 21, the Super Source Fair will be held at the China International Expo Center in Hangzhou. Exhibiting source enterprises span multiple categories including grains and oils, beverages, condiments, snacks, and fresh agricultural products. If you're developing your own brand, seeking contract manufacturers, or negotiating direct sourcing partnerships, meeting dozens of source companies face-to-face over three days is the most efficient approach.

Bring your category requirements, target price range, and minimum order quantity limits. See you in Hangzhou.