Convenience chain store ‘7-Eleven’ has a great ‘top of the mind recall’ and brand image for food and grocery purchases in China. However, the company needs to develop an online proposition to halt its market share decline and expand its omnichannel operations, says GlobalData, a leading data and analytics company.

GlobalData’s Q3 2021 Consumer survey* shows that 36% of respondents purchase food and grocery items from 7-Eleven.

GlobalData’s latest report, ‘7-Eleven, China (Food and Grocery) Shoppers Profile, Market Share and Competitive Positioning’, reveals that the retailer has a large young shopper base with 42.3% between the age of 25-34 years. However, it does have an audience amongst the older generations too with 31.5% shoppers in Gen X and 23.8% shoppers in the Boomers generation. A majority – 62.3% of shoppers are female and they are the main influencers of food & grocery purchases in China.

Suresh Sunkara, Retail Analyst at GlobalData, comments: “While the brand has captured a large share of middle-income consumers with 43.8% having annual household income between CNY100,000 – CNY199,999 (US$16,000 – US$32,000), it has a lesser number – *38.5% in the higher income bracket of CNY200,000+ in comparison to the China-based market leader ‘Yonghui Superstores’, which has 51.3% of shoppers with an annual income above CNY200,000 (US$32,000).

“This trend in income groups stems from its value proposition of small, affordable items available for instant consumption, which attracts shoppers looking for deals and lower prices besides convenience.”

‘7-Eleven’ has extensive accessibility and store presence in China with over 2,800 stores. Its wide assortment of food and grocery products makes it a ‘go-to retailer’ for these purchases.

Sunkara continues: “The greater accessibility has helped improve existing store sales in 2021 along with average spending per consumer in-store increased to US$7.23 in 2021 from US$5.84 in 2019 as shoppers continue to focus on non-discretionary purchases even after lifting up of lockdown restrictions.

“According to GlobalData, *44% of respondents in China are cooking meals at home more frequently for which purchases at convenience stores have increased. As of Q3 FY2022, revenues increased by US$15.9m over 2020 showing that there is sales growth with the shoppers in China getting back to stores.”

In line with this, 38% of respondents said they are buying grocery products online more frequently and *43% continue this habit showing that online has become crucial for growth in the region.

Sunkara concludes: “7-Eleven has no online operations in China putting it at a disadvantage. Its market share has been on a decline since 2018 and it fell out of the top 10 grocers in terms of sales in 2020. Other players like Yonghui Superstores and Walmart have built omnichannel operations for grocery delivery making consumers accustomed to these services.

“Consumers also expect digital elements like QR codes, alternative payment methods in store and 7-Eleven needs to catch up with this to retain the digitally inclined young shopper.”

*GlobalData Q3 2021 Consumer survey includes 513 respondents from China