Convenience stores in Hong Kong experienced a positive impact from the COVID-19 pandemic in 2021. Consumers relied on outlets near both their living areas and offices to purchase grocery products in order to reduce the time exposed to outdoor or crowded areas that have a higher chance of infection.
Both yuu rewards, the customer rewards club launched by the parent company of 7-Eleven, DFI Retail Group, and OK Stamp It, the customer rewards programme launched by Circle K in Hong Kong, played an important role in encouraging consumers to spend more since the outbreak of the COVID-19 pandemic in 2020. These two customer rewards programmes allow users to link mobile applications with their Octopus cards, the most popular contactless stored value smart card for electronic payments in Hong Kong, to collect reward points and redeem discounts automatically.
From the outbreak of the COVID-19 pandemic in 2020, Japanese food and beverage products continued to gain popularity amongst Hong Kong consumers. Although they were unable to visit Japan, which was one of the most popular travel destinations for Hong Kong residents before the pandemic, they could still experience Japanese products and services.
The continuous growth in the number of convenience stores in Hong Kong during the pandemic reflected the increase in domestic consumption during the travel lockdown period. However, since the second half of 2021, Western Europe and several Asian markets, such as Singapore and Australia, relaxed their travel restrictions, allowing vaccinated travellers to be exempt from quarantine requirements when entering the border.
Whilst 7-Eleven and Circle K acted swiftly in terms of their product offering and outlet expansion to capture the rise of domestic consumption in 2021, VanGo, the third-largest convenience stores chain, owned by China Resources Enterprise, suffered throughout the year. The lack of recovery of tourist flows over 2021, as well as the aggressive expansion plans implemented by the top two players in Hong Kong, resulted in a sub-optimal performance during the pandemic, hence both its value share and number of outlets declined.
Compared with supermarkets and other grocery retailers, where consumers make a relatively large number of purchases through either online or offline channels, convenience stores in Hong Kong are for consumers to make small basket purchases at locations nearby. This means consumers in general rarely plan before they decide to spend in a convenience store.
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Chained grocery retail outlets selling a wide range of groceries and fitting several of the following characteristics: Extended opening hours Selling area of less than 400 sq metres Located in residential neighbourhoods Handling two or more of the following product categories: audio-visual goods (for sale or rent), foodservice (prepared take-away, made-to-order, and hot foods), newspapers or magazines, cut flowers or pot plants, greetings cards, automotive accessories. Sales data excludes foodservice sales. Example brands include 7-Eleven, Spar. Note: The number of branches required to be termed chained varies from country to country but is usually ten or more. If a multinational is operating in the country, then this is included, even if there are fewer than ten outlets under the brand.See All of Our Definitions
This report originates from Passport, our Convenience Stores research and analysis database.
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