Chongqing- Who can resist a can of Starbucks frappuccino that costs just 6 yuan (about 83 U.S. cents)? Near-expired food stores labeled with eye-catching "Global Goods" and "90% off" were popping up at some shopping malls in Southwest China's Chongqing.
Statistics show that the number of near-expired food stores has soared by a hundred in just one year and flushed into the public on a large scale in Chongqing, a megacity with more than 33 million people.
The bottled Starbucks Frappuccino sold at 6 yuan each. (Photo provided to iChongqing)
Near-expired food market to surpass 40.1 billion yuan by 2025
Near-expired food refers to food about to reach the expiration date but has yet expired, such as canned food, candies, beverage, and biscuits. It has matured business models already overseas. Some foods are labeled with expiration dates and the best-tasting dates in the United States, the U.K., and New Zealand. If the food pasts its best-tasting date but not before its expiration date, retailers start selling it at a discount or donating to charity.
Canada, the United States, Germany, and other countries have included near-expired food in the relief mechanism to create social and economic benefits.
In China, the concept of near-expired food is not as popular as abroad, but also everywhere. "Buy one get one free" promotions are often offered at grocery stores for products with short shelf life, such as steamed buns, bread, and cold dishes. The near-expired food market of large-scale operation is still in its infancy in China.
With the exploded new consumer market and the epidemic influence, upstream in the food industry are faced with overstocking, and the scale of near-expired food is increasing. Young people seem more likely to accept second-hand goods and near-expired food due to the rising circular economy and environmental protection around the globe.
Several top enterprises in the near-expired food sector have emerged due to additional financing. Examples of such enterprises include e-commerce platforms HaoShiQi and Sale and offline chain stores HotMaxx, bazaars, Tesco, ShiHuiBang, and XiaoXiangShengHuo.
According to a survey conducted by iiMedia Consulting, the market size of near-expired food in 2021 has reached 31.8 billion yuan (about 4.4 billion U.S. dollars) in China. It is estimated that the scale of China's near-expired food market in 2025 will surpass 40.1 billion yuan.
Risks and regulations on near-expired food
The operation risk comes from channel capability and consumer trust. The unstable food supply and short life cycles require efficient turnover, especially sales in community stores and online stores or platforms. Stores should clarify to customers that near-expired items are separate from discounted items.
As for the online sale, we do not have explicit provisions about noticing consumers about products near-expire. However, providing the correct information will help online operators to avoid legal disputes with consumers – who may complain if the product is delivered after on upon expiration date, thus invoking a breach of mandatory provisions of consumer protection law or quality law.
Some local governments, such as Beijing, Shanghai, and Guangzhou, have introduced legal provisions concerning near-expired food.
Food Safety Regulations of Shanghai Municipality of 2017 require those food producers and traders to establish a management system for food and food additives near the end of shelf-life with visible marks and concentrated storage. Shanghai government also specifies the thresholds for a product to be considered as near-expired: 45 days before the expiry date (if shelf life is longer than 1 year), 20 days before the expiry date (if shelf life is between 6 months and one year).
A stable supply of goods is indispensable
Since the beginning of this year, the head players of near-expired food, represented by HotMaxx, HitGoo, and Savelots, have successively entered Chongqing with a double-digit growth rate.
Many head players are optimistic about the major business districts of Chongqing, as well as shopping malls adjacent to large communities and schools.
HotMaxx has opened 15 stores in Chongqing in a few months. It plans to open 300 stores in Sichuan and Chongqing regions in 2022, with Savills's report revealing a rapid expansion of cost-efficiency discount brands in Chongqing in the third quarter.
With the near-expired food used to attract customers to walk in, HotMaxx is gradually transferring from the near-expired food store to a discount store. Half of the shelves in the store is snack area, with daily necessities and skin care products.
"To go further in this track, a stable supply of goods is indispensable. Besides, the business philosophy and methods are critical, including category planning, big data management and analysis, and improvement of turnover efficiency," said Wang Chengke, vice president of China General Chamber of Commerce.