On-site exploration of Meituan Happy Monkey's first store: A bottle of mineral water costs less than 0.7 yuan! Hard discounts welcome new players

After nearly two months of anticipation, Meituan's self-operated supermarket "Happy Monkey" has finally unveiled itself.

In early July, news emerged that Meituan's hard discount supermarket project, which benchmarks against Hema NB, was officially named "Happy Monkey" and would open its first stores in August this year, with plans for one store in Beijing and two in Hangzhou.

In the past two months, the dynamics of the "Happy Monkey" national flagship store located in the Gongshu District of Hangzhou have attracted public attention: how is the store's renovation progress, when will it officially open, and what are the characteristics of the hard discount model?

Image source: FBIF

On August 29, the national flagship store of "Happy Monkey" officially opened in Hangzhou. The reason for the high level of attention is simple—the hard discount sector has become a battleground for various retail players, including the internet and supermarkets, and the addition of instant retail has provided more imaginative space for offline retail.

After a leadership change and a focus on streamlining, Hema has made a comeback; as of the end of August this year, the number of Hema Super Hema NB stores has approached 300 [1]. Auchan first expanded out of Shanghai in April, and by July, the total number of stores nationwide had reached 76 [2]. On August 16, JD's discount supermarket opened its first national store in Zhuozhou, Hebei. Traditional retail players are also entering the fray, with Wumart Group's hard discount community supermarket Wumart Value opening six stores simultaneously in Beijing.

"Happy Monkey" is Meituan's answer to the hard discount challenge.

After exiting the Daguan subway station, walking straight for about 400 meters, the Happy Monkey, in the same color scheme as Meituan, is hard to miss. The store is located at Room 105, Building 1, No. 291 Daguan Road, Gongshu District, Hangzhou, within the main urban area of Hangzhou, about seven to eight kilometers from the West Lake scenic area, surrounded by nearly 30 mature residential communities [3].

Image source: FBIF

The competition faced by "Happy Monkey" remains fierce: a farmer's market is just 100 meters away, a RT-Mart is 400 meters away, and a Hema Super Hema NB is located 1.2 kilometers away, with chain convenience stores and community fresh food stores scattered around. On the opening day, shortly after 8 a.m., there was no need to queue to enter, but if you want to maneuver with a shopping cart to grab egg tarts for 5.9 yuan for four or roasted chickens for 16.9 yuan each, you'll need to be quick and agile.

Official information from Happy Monkey indicates that it has its own supply chain, with products including fruits and vegetables, baked goods, rice, flour, cooking oil, daily necessities, etc. [4], and its slogan is "Good goods are not expensive, happiness is doubled." What constitutes "not expensive" for good goods? Can consumers intuitively feel the advantages of its advertised supply chain? Compared to the hard discount transformations already completed abroad, what innovations will internet companies like Meituan bring? With these questions in mind, FBIF visited the Happy Monkey store on Daguan Road in Gongshu District

Indeed Not Expensive: Egg Tarts 5.9 Yuan for 4, Mineral Water 7.9 Yuan for 12 Bottles, Eggs 11.5 Yuan for 30 Pieces

The store where Happy Monkey is located was originally the factory site of the Nezha Automobile user center. The store has a height of about 7 meters, is square and independent. Upon entering the store, this kind of "neatness" makes it easy to divide the space with zones and shelves, without making people feel cramped or chaotic. And these feelings are quickly overshadowed by the impact of low-price tags, becoming "subconscious" and taking a back seat.

On the right side upon entering, the products of the private brand "Happy Monkey" occupy the space: 76.9 Yuan for 5 liters of peanut oil, 8.9 Yuan for 500 grams of sea salt soda crackers, 9.9 Yuan for 500 grams of original peach crisps, 19.9 Yuan for 20 packs of facial tissues, 14.9 Yuan for 3 kilograms of laundry detergent...

Image Source: FBIF

Also under its private brand, the 5-kilogram Wuchang rice is priced at 39.9 Yuan, while the price on the Hema APP is 78 Yuan, and the official price on the Aoleqi mini-program is 47.9 Yuan.

For rice, flour, and oil, Happy Monkey has "laid out" two items right at the entrance. The straightforward Happy Monkey uses essential products to let every first-time consumer perceive that it has lowered prices, possibly even lower than competitors.

According to on-site information from FBIF, this supermarket is positioned to serve the surrounding residents, so it provides essential products for three meals a day in prominent locations.

For other categories of frequently consumed daily goods, Happy Monkey also visually showcases low prices.

Eggs, which are loved by everyone and are often used for promotional lotteries when supermarkets open, also could not escape being used to "attract traffic" this time. Happy Monkey's antibiotic-free fresh eggs, priced at 11.5 Yuan for 30 pieces, occupy at least three layers of shelves, with a product inspection report displayed on the shelf.

The most familiar basic items only require the simplest display method; bottled water is stacked in whole packs on the shelves. The 550-milliliter natural mineral water is priced at 7.9 Yuan for 12 bottles, equivalent to about 0.66 Yuan per bottle, slightly lower than Aoleqi mini-program's 0.68 Yuan. Meanwhile, "Happy Monkey" bottled pure water is even more astonishingly priced at about 0.41 Yuan per bottle. Standing in front of this shelf, you might feel like you are here to stock up.

Once dubbed the "Hermès of Grapes," the Sunshine Rose green grapes have become a representative of affordable prices at Happy Monkey—900 grams for only 11.9 Yuan. It serves as the showcase of the fruit area, positioned prominently and accompanied by a carefully designed advertisement. If consumers look up, they can also see its special price banner hanging from the ceiling. In comparison, the Hema APP's "Yunnan Sunshine Rose green grapes" are priced at 12.9 Yuan for 500 grams, while the Aoleqi mini-program's "Sunshine Rose green grapes" are 14.3 Yuan for 1 kilogram Price-attractive products always draw crowds spontaneously. At every hot-selling shelf, the staff is mainly busy with two things: restocking and restocking.

The limited-quantity eggs quickly empty the shelves, and the staff can only stand by, "waiting for the opportunity" to restock. Restocking comes in baskets—eggs are packed in brown baskets printed with "Happy Monkey" and delivered to the shelf with a cart.

Similar scenes can be seen in the vegetable section. Some elderly residents living nearby did not go to the farmers' market 100 meters away but instead got up early to sweep away bags of pre-packaged vegetables. The staff can only keep taking products out of the baskets to ensure the shelves remain stocked.

The freshly baked area "Happy Kitchen" is the most congested area for crowds and the most frequently restocked, as half of the aisle is for walking and the other half is for queuing. The loudspeaker here repeatedly announces, "Egg tarts 4 for 5.9 yuan, Orleans-style roasted chicken 16.9 yuan each." On average, each egg tart costs about 1.5 yuan. Staff shout while restocking, and before 9 AM, the newly baked batch quickly runs out, leaving only the last box of egg tarts and roasted chicken.

It is important to note that some of these products are promotional prices for the opening, lasting from August 29 to September 11, including the egg tarts priced at 4 for 5.9 yuan. After the "newbie period," whether these products can continue to drive purchases will test the operational capabilities of Happy Monkey.

New hard discount player brings supermarkets into "big" communities

Every generation has its own way of buying eggs.

On the opening day of Happy Monkey, anyone who checks in at the store can receive a free box of eggs. After shopping, if the total spending exceeds 88 yuan, they can participate in a lottery across the street.

This scene feels familiar. In April this year, the opening events of Aldi in Suzhou and Wuxi also featured free eggs for check-ins and a lottery for purchases over 129 yuan. If customers scan the code to join the official Happy Monkey community, they can also receive a welcome gift voucher and be affectionately referred to as "neighbors" by the official assistant.

Image source: Happy Monkey

Those attracted by the eggs are precisely the target consumers of Aldi and Happy Monkey—budget-conscious but unwilling to sacrifice quality, pursuing "value for money."

A middle-aged consumer told FBIF that she was drawn into the store by the opening event of Happy Monkey, buying several fruits that were two to three yuan cheaper per pound than the community fresh food store. However, she did not make impulsive purchases due to the low prices, saying, "If I want it, I buy it; if I don't need it, I won't buy it."

Since the beginning of this year, Aldi has expanded beyond Shanghai, upgraded to the hard discount model of Hema NB, opened its first store with JD Discount Supermarket, and launched six stores simultaneously with Wumart Super Value, all targeting the large base of price-sensitive consumers who need frequently purchased essential products. These stores adopt a hard discount model, while Happy Monkey is currently the "youngest" hard discount player The hard discount model refers to the sustainable low-price sales of goods achieved by optimizing the supply chain, reducing intermediaries, streamlining operational costs, and lowering brand premiums, just like the banners seen everywhere in Happy Monkey stores that say, "Good goods are not expensive, wholesale prices for even one item" and "Spend less, eat better." In contrast, the soft discount model involves selling goods at a discount due to inherent flaws or nearing expiration dates.

Common characteristics of hard discount players include small store formats, a streamlined SKU count, a high proportion of private label products, and a focus on high-frequency essential products.

The first Happy Monkey store covers an area of about 700 to 800 square meters, and such a store format is also suitable for opening near high-density communities, avoiding high rental pressures while being closer to target consumers.

Image source: FBIF

The geographical location of the first Happy Monkey store is near the bus stop "Erfangji General Factory" and the subway "Daguang Station," within walking distance to several communities like Daguang Xiyuan and Dahu East Garden. The Daguang Street area has nearly 30 mature communities, with a resident population of 49,800, one-third of whom are elderly, which aligns with Happy Monkey's user profile. Similarly, Hema's Super Box focuses on street shops in Jiangsu, Zhejiang, and Shanghai communities, while Ole's locations are often in high-density communities and secondary business districts.

According to on-site information from FBIF, the first Happy Monkey store has over 1,000 SKUs. This number is comparable to its competitors—Ole has about 2,000 SKUs, Hema's Super Box has nearly 1,500 SKUs, and Wumart's SKUs are under 1,300. A streamlined SKU count means reduced difficulty in inventory management and the ability to expand the procurement scale of individual products, lowering procurement prices.

Currently, Happy Monkey has not disclosed the specific proportion of its private label products. From the first store's situation, the number of private label products is not large, but they cover high-frequency essential categories, including rice, flour, cooking oil, snacks, bottled water, and daily necessities. Some products, such as sea salt soda crackers and beef-flavored orchid beans, are positioned prominently on the shelves as bestsellers. The proportion of private label products for Ole and Hema's Super Box is 90% and 60%, respectively. According to on-site information from FBIF, since it has just opened its first store, Happy Monkey needs to continuously update and adjust based on consumer feedback, and everything is still in dynamic change.

Hard discounts can also achieve "both ends," requiring both low prices and dignity

The first Happy Monkey store opened at 7:30 AM, but by 8:00 AM, some elderly people were already seen carrying Happy Monkey's yellow shopping bags and the free fans provided by Happy Monkey, crossing the road into the Dahu East Garden community directly opposite the store. The straight-line distance from the community entrance to Happy Monkey is estimated to be only about 20 to 30 meters One consumer told FBIF that she spent half an hour shopping and bought fresh milk, as well as vegetables and seafood for that day. This consumer stated that since she lives nearby, if the quality of the fresh produce is good, she might come back in the future, "because we need to buy groceries every day."

Consumers like this are the main customer base for Happy Monkey. According to FBIF's on-site understanding, opening at 7:30 can meet the demand for fresh meat, poultry, and vegetables for nearby residents.

From the interviews with several middle-aged and elderly consumers conducted by FBIF, they all have a high frequency of grocery shopping needs and do not have absolute loyalty to supermarkets. They shop at new retail supermarkets like Hema, as well as more traditional supermarkets like China Resources and Auchan, with a greater focus on product quality and price.

Focusing on products is actually a common practice among hard discount community supermarkets. The core of hard discount is not merely pursuing low prices, but rather transforming the supply chain to provide high-quality and cost-effective products. Hema, Superbox, and Aldi are all emphasizing their own brands, direct sourcing, and strategic suppliers, which is essentially a competition of "product strength."

Although Happy Monkey has just started, Meituan's construction in the supply chain has already been reflected in Xiaoxiang Supermarket and Meituan Flash Purchase. As of June this year, Xiaoxiang Supermarket has opened nearly a thousand front warehouses in 20 cities across the country, with a cumulative self-operated SKU exceeding 1,000; the "direct sourcing" project will gradually cover 200 county-level agricultural production areas nationwide; Meituan Flash Purchase has collaborated with retailers and brands to build over 30,000 lightning warehouses across the country.

In addition to building product strength, hard discount community supermarkets are also providing a more grounded yet "elegant" store format compared to traditional vegetable markets. Aldi, which has been jokingly referred to as the "poor man's supermarket," has already formed a brand effect among workers in Shanghai. The displays here are always clean and tidy, allowing budget-conscious workers to maintain dignity while purchasing discounted items for 9.9 yuan. Some say, "This gives a feeling of not having to live a hard life."

The stores of Happy Monkey also present a similar appearance.

In categories like fruits, vegetables, seafood, beef, and chicken, Happy Monkey focuses on quality rather than quantity, offering a limited number of SKUs that can be counted on fingers, and packaging them in transparent wraps for separate display.

Among the seafood, there are no live products; all are refrigerated or frozen pre-packaged items.

Compared to the bulk displays in traditional markets, this type of display looks cleaner and more organized, while also reducing store losses.

To assess product quality, consumers can rely on data as well as visual inspection.

For example, to determine the sweetness of fruits, there is no need to ask the market vendor; the price tag next to the product indicates the sugar content tested that day, making the sweetness of Dali winter jujubes, Xinjiang plums, and seedless white grapes clear at a glance. After selecting the ingredients, consumers can look up at a large screen that continuously displays the results of that day's pesticide residue tests Faced with the new consumer demand for both low prices and decent quality, Meituan's hard discount practice has just begun. Whether Happy Monkey can truly run its model and achieve scale still requires time to verify.

Author of this article: Chengzi, source: FBIF Food and Beverage Innovation, original title: "On-site Investigation of Meituan Happy Monkey's First Store: A Bottle of Mineral Water for Less Than 0.7 Yuan! Hard Discounts Welcome New Players"

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