In the face of slowing growth and tightening regulations, Meiyijia, a major convenience store chain, is shifting its strategic focus to fresh food and prepared meals. It is planning new store formats where fresh food will account for over 40% of offerings, attempting to transform from a "snack convenience store" into a "full-time instant dining and retail complex." However, its vast management scope and the inherent contradictions of its franchise model remain core challenges on this transformation path.
Having sold goods for nearly 30 years and operating 40,147 stores, Meiyijia, China's "king of convenience stores," has found itself in the spotlight twice within three months due to scandals involving counterfeit cigarettes and expired food. As the convenience store brand with the largest store network in China, Meiyijia achieved rapid expansion through its franchise model, but this growth has been accompanied by a loss of management control.
Two Major Incidents Within Three Months
On June 8, China's State Administration for Market Regulation (SAMR) published a notice stating that, following regulatory findings and media exposure of food safety issues at multiple Meiyijia stores, including the sale of expired food, the SAMR had lawfully summoned and held talks with the responsible person of Meiyijia Holding Co., Ltd. (referred to as Meiyijia). The SAMR required the company to strictly comply with the Food Safety Law and relevant regulations, establish a comprehensive risk management system and food safety traceability system covering headquarters, branches, and all store levels, and fully implement its food safety responsibilities.
Looking back at the timeline, Meiyijia's compliance crisis erupted around this year's Consumer Rights Day in March. In related reports, journalists visited 10 Meiyijia stores in Guangzhou, Foshan, and Dongguan, purchasing problematic cigarettes at all locations. These were later identified as counterfeit by tobacco authorities, with at least 854 packs seized on-site. The Guangdong Provincial Tobacco Monopoly Bureau subsequently launched joint inspections of the exposed stores, and the Dongguan market regulator summoned Meiyijia on the same day, demanding a comprehensive self-inspection and correction.
On March 15, Meiyijia issued an apology, acknowledging loopholes in store management, supervision, and control, and inadequate implementation of management responsibilities. It suspended the involved stores for investigation and initiated a nationwide special inspection. On April 9, the company further reported that it had terminated franchise contracts with 606 stores found to have significant irregularities in tobacco operations or to be unsuitable for continued cooperation.
Subsequently, during recent routine inspections and media follow-ups by market regulators in various regions, issues such as the sale of expired baked goods, unmarked near-expiry food sections, and substandard temperatures in hot food cabinets were still found at some Meiyijia stores. The negative public sentiment from the March counterfeit cigarette incident created a compounding effect. Regulators determined that Meiyijia's headquarters had failed in its duty to effectively supervise franchise stores, leading to this high-level accountability meeting with the SAMR.
"Franchise chains often use the excuse that headquarters only provides the brand and stores operate independently. However, the Food Safety Law clearly states that the headquarters of a chain enterprise bears management responsibility for store food safety. When a store has a problem, the first responsibility lies with the headquarters," a retail industry insider commented.
Annual Revenue Soars to 55.8 Billion Yuan
Meiyijia's development history represents a typical expansion path for domestic Chinese convenience store brands.
Meiyijia is controlled by the Dongguan Sugar, Wine & Spirits Group, which was established on August 10, 1995, evolving from a state-owned commercial enterprise. Its legal representative is Zhang Guoheng. The group focuses on wholesale, with businesses covering investment, retail, logistics, and distribution. It holds controlling stakes in six enterprises, including Meiyijia Holding Co., Ltd. and Guangdong Shijie Logistics Co., Ltd.
Currently, the actual controller of Meiyijia is Ye Zhijian. He and Meiyijia's general manager, Zhang Guoheng, directly hold 8% and 14% stakes in Meiyijia, respectively. Ye Zhijian also directly holds a 25.4% stake in Meiyijia's major shareholder, the Dongguan Sugar, Wine & Spirits Group.
Information shows that Ye Zhijian is from Humen Town, Dongguan. He was originally the deputy director of the Dongguan Municipal Commerce Bureau. In the early 1990s, he was transferred to head the Dongguan Sugar, Wine & Spirits Company, where he founded the Meijia supermarket chain. Later, facing competition from Carrefour and Walmart, he pivoted to convenience stores.
In 1997, Ye Zhijian opened the first Meiyijia store in Dongguan, establishing the franchise model from the start. This was key to Meiyijia's rapid scaling. Within six years, it had 50 stores and annual revenue exceeding 100 million yuan.
In 1997, the entry of overseas hypermarkets like Walmart and Carrefour sparked a new round of competition with domestic chain supermarkets. Foreign hypermarkets represented by Walmart, with their scaled procurement, standardized operations, and low-price strategies, quickly captured market share, putting immense pressure on local chains.
Subsequently, leveraging partners' sales networks and adopting a "rural areas surrounding the cities"下沉 strategy, Meiyijia expanded at an average pace of 1,355 new stores per year, reaching over 230 cities nationwide. Its official website shows it now has over 40,000 stores across 22 provinces and autonomous regions, more than 240 prefecture-level cities, and over 4,000 towns. Its total store count is about 8 times that of 7-Eleven China and 5.7 times that of Lawson China, making it the largest convenience store chain in China by store count. In 2024, its sales revenue reached 55.8 billion yuan, growing by over 20%.
Challenges of the Franchise Model
To achieve rapid expansion, the two best tools are a light-asset approach and lowering barriers to entry.
Previous reports indicated that the total investment to open a 40-50 square meter Meiyijia community store, including franchise fees, deposits, decoration, equipment, and initial inventory, ranges between 250,000 and 350,000 yuan, which is very friendly to small entrepreneurs. During subsequent operations, Meiyijia does not take a cut of store revenue or participate in profit sharing. In contrast, franchising a 7-Eleven requires startup capital of 500,000 to 1 million yuan, with headquarters taking about 30% of gross profit.
Meiyijia's revenue primarily comes from franchise fees, brand management fees, and supply chain price differentials. Correspondingly, Meiyijia has minimal intervention in franchisees' daily operations. This stands in stark contrast to the deep involvement of headquarters like 7-Eleven and FamilyMart in store operations. This also means that Meiyijia's weak regulatory model inherently leaves an opening for product quality risks.
According to data from the Consumer Protection platform, between 2022 and 2025, there were 2,113 complaints related to convenience stores, with Meiyijia topping the list at 630 complaints. On the national 12315 consumer complaint platform, there are over 5,300 public notices related to Meiyijia, covering issues beyond tobacco, including food safety and after-sales service.
Furthermore, within Meiyijia's franchise structure, stores bear their own profits and losses, while headquarters profits from the supply chain and management fees. Foreign convenience store chains often also share in sales or gross profit. In other words, Meiyijia's role is more akin to a "wholesaler," making money by selling goods to franchisees at a markup, with franchisees essentially working for themselves.
This model lowers the barrier to expansion and accelerates store openings, but the cost is a significantly weakened control by headquarters over individual stores—Meiyijia deals not with experienced regional master franchisees but with numerous independent individuals.
When store operations directly affect a franchisee's personal income, and headquarters does not share in profits, adherence to standards often relies more on the franchisee's own judgment and self-discipline. This makes unified management more difficult in practice.
Although the barrier is low, Meiyijia is not necessarily a high-profit franchise project.
On one hand, because headquarters does not share in store profits, its earnings come mainly from supplying goods to franchisees, which to some extent raises purchase prices. Many franchisees have stated that the purchase price from Meiyijia can be about 5% higher than market prices, with instances of "liquor purchase prices being higher than others' retail prices."
On the other hand, the external environment is becoming more challenging.
With the rise of snack discount stores, discount retailers, and instant retail platforms, convenience stores are facing continuous diversion of customer traffic and average transaction value. The "2025 China Convenience Store Development Report" shows that the average daily customer count per store has dropped from 346 in 2023 to 311.4 in 2024; the average transaction value has fallen from 26.1 yuan in 2022 to 20.4 yuan.
With relatively high purchase costs and declining customer traffic and transaction value, the profit margin for individual stores is further squeezed.
This pressure ultimately falls on each individual store.
As profit margins are continuously compressed, some stores have begun actively seeking additional revenue streams. Examples include selling hot food and betel nuts without proper licenses, franchisees cutting staff, and lax inventory management.
A source close to Meiyijia also noted that packaged snacks offer little differentiation in price and profit margins. Only items like oden, steamed buns, and noodles have relatively higher profit margins, with overall store gross margins around 35%.
Among these options, only a few categories can truly bring both customer traffic and cash flow.
For most convenience stores, the most critical product category is cigarettes.
However, cigarettes are subject to unified price management, offering relatively limited profit margins. A source close to Meiyijia revealed that a store's overall gross margin is typically only around 28% if it sells cigarettes.
Consequently, many franchisees began sourcing cigarettes through other channels, even leading to the influx of counterfeit products.
Since 2025, some leading tea beverage brands have faced maximum penalties and public notices for food safety issues at regional stores, indicating a regulatory shift from penalizing stores to pursuing headquarters accountability. The "Regulations on the Supervision and Administration of Food Safety Responsibility Implementation for Food Sales Chain Enterprises," effective this year, explicitly requires chain enterprises to appoint food safety directors and officers, and for headquarters to conduct unannounced inspections of stores at specified frequencies and maintain records.
For the convenience store industry, this means that having tens of thousands of stores is no longer just a point of pride. When headquarters' control over stores cannot keep pace with expansion speed, regulatory, public relations, and legal costs will quickly erode franchise fee profits. Among the current top five domestic convenience store brands, Lawson China is piloting regional authorization and strong store inspection models in some areas, and FamilyMart is implementing tiered franchisee management—both are attempts to rebalance the speed of franchising with the depth of control.
A Pivot to Food Service?
Although Meiyijia currently holds the top spot in China for store count, its growth rate has slowed significantly compared to the past. Zhang Guoheng stated at an industry summit at the end of 2025 that Meiyijia's net store increase in 2025 was about 3,000 to 4,000, with business growth around 9% and profit growth achieving double digits.
According to data from the China Chain Store & Franchise Association, since 2016, Meiyijia's sales revenue has maintained double-digit year-on-year growth annually. In 2021, while the industry's average sales growth was 12.3%, Meiyijia achieved 22.8%.
This is partly due to industry conditions. A report by NielsenIQ titled "Challenges and Opportunities Facing China's Convenience Store Industry" shows that the convenience store growth rate in 2025 was 5%, significantly lower than the 12% in 2020.
Even for Meiyijia, the path of relying solely on store openings to drive growth is becoming increasingly difficult to support performance improvement. Meiyijia is now seeking a new path.
Recently, Meiyijia revealed it is planning a new type of food service-oriented store. According to the plan, fresh food and prepared meals will account for over 40% of offerings in such stores, targeting the "six meals a day" demand for breakfast, coffee, lunch, afternoon tea, dinner, and late-night snacks.
Based on disclosed information, this store format emphasizes stable meal preparation and standardized replication, aiming to upgrade convenience stores into genuine instant dining venues.
Meiyijia stated that this round of adjustments is "essentially not about a single-point innovation" but focuses on improving operational quality based on the existing store scale. The new store format is still in the testing and optimization phase, not yet finalized. It will be gradually promoted through opening new stores and renovating old ones.
At the end of 2018, Meiyijia built its own "Caizhen" fresh food production factory, mass-producing basic fresh food categories like steamed buns, boxed meals, small dishes, hot dogs, and sweet soups. It relies on its own cold chain logistics, "Huaxue Cold Chain," to achieve daily delivery of fresh food to stores.
Starting in 2021, it launched the sub-brand "Meiyijia·Qike," focusing on a combination of fresh food and coffee, but only rolled out on a small regional scale. It tested nearly 400 "Fresh Food & Convenience" pilot franchise stores in Guangdong Province to validate the store operation model.
After several years of refinement, in 2025, Meiyijia proposed the routine integration of fresh food and meals into standard stores, termed the "Meiyijia 6.0" new-generation store standard. This includes making fresh food display areas a standard layout, upgrading them from optional categories to essential store categories. It has sporadically added simple meal cooking equipment in stores across provinces, fully rolled out boxed meals, rice balls, and buns, and collaborated on localized seasonal items in many areas.
Now, Meiyijia has officially announced that upgrading all stores with food service is a core group strategy. It is launching a dedicated food service-oriented new store format, with hard requirements for fresh food and meal displays and SKU proportion exceeding 40%. It is positioned as a community canteen, competing with street-side fast food and breakfast stalls, formally transitioning from a "snack convenience store" to a "full-time instant dining and retail complex."
Meiyijia officially responded to media on May 26, stating: "This round of transformation is a reform of single-store profitability quality, not a single-point new product trial. The core goals are to improve franchisee income, strengthen full-time dining scenarios, and optimize product mix for different commercial areas..."
In terms of scale, Meiyijia is undoubtedly the "king" of China's convenience store industry. However, the recent consecutive incidents involving counterfeit cigarettes and expired food have exposed the deep-seated management shortcomings under its franchise expansion model. Low barriers and weak control make headquarters more like a wholesaler than a true brand operator—profiting from supply chain markups and management fees without effectively constraining end-store operations. When individual store profits are under pressure, and customer traffic and transaction values continue to decline, some franchisees' "self-help" actions can cross compliance boundaries.
Now, Meiyijia has made food service a core group strategy, attempting to use the high-margin fresh food segment to improve single-store profitability. This direction is reasonable in itself, but the challenges are equally clear: fresh food imposes far higher requirements for cold chain distribution, standardized operations, and food safety control than traditional packaged goods. And Meiyijia faces over 40,000 individual franchisees who bear their own profits and losses. If headquarters cannot upgrade from "providing a brand" to "providing standards + strong supervision," the transformation may merely repeat the same risks in a different sector.
Whether Meiyijia can truly address its governance shortcomings at a scale of tens of thousands of stores will be key to determining if it can evolve from "China's largest convenience store" to "China's strongest convenience store."
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