1.4 million fake cigarettes cannot defeat Meiyijia

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From the 2019 fake cigarette store incident to nearly 1.4 million fake cigarettes seized this time, Meiyijia’s store count has doubled. But how long can this growth last?

Author: Haitang Ye

Editor: Chen Jian

“The King of Convenience Stores” always seems to weather crises smoothly.

140,000 fake cigarettes, 306 involved stores—just after March 15, Meiyijia was once again in the spotlight. Similar stories aren’t new: in 2019, Shenzhen stores involved in fake cigarette cases; in 2023, a Shanghai store was sentenced for unlicensed cigarette sales.

Repeated exposure of issues, yet the number of franchisees has surged to 40,000, leaving behind the big three foreign convenience store giants (FamilyMart, 7-Eleven, Lawson), which have been industry leaders for years.

Why?

The answer may lie in its franchise model: low entry barriers attract newcomers, franchisees bear the profits and losses, while headquarters earns franchise fees, management fees, and supply margin—regardless of whether stores are profitable, all fees are collected without exception.

For Meiyijia, franchisees are the real “cash cows.” As long as someone is willing to pay 300,000 yuan to hang the sign, and more newcomers are waiting to join, Meiyijia can keep earning.

But cracks are beginning to appear. Franchisee profit margins are being squeezed, and more are choosing to “drop out” or transfer their stores.

The one potentially destroying Meiyijia might be itself.

Is Meiyijia bleeding heavily?

“After March 15, does Meiyijia still sell fake cigarettes?”

On March 19, a netizen asked this on social media, with mixed opinions in the comments.

“Things are much better now; most store owners dare not sell anymore. Everyone signed a commitment letter, the company penalizes heavily, and it seems they’ve collaborated with tobacco enforcement,” said one user. “A small number still sell, either risking it or genuinely unable to tell real from fake cigarettes.”

A store owner from Hunan even posted photos showing signs that read “Genuine cigarettes, ten times compensation for fake” to prove innocence.

But more voices point to deeper concerns.

“Just the confiscation of stores, maybe the inventory too,” “Once the storm passes, everything is fake; I never buy from there,” “Eat, drink, sell as usual…” These comments are like needles piercing the brand trust Meiyijia has built over more than twenty years.

The cracks in trust are already reflected in customer flow.

Some netizens described several Meiyijia stores in Nanshan District, Shenzhen, with no customers entering in half an hour. One store’s cigarette shelves were two-thirds empty.

It’s not just Shenzhen. On social platforms, many franchisees have posted complaints: after fake cigarette exposure, sales plummeted—some from 7,000 yuan to 2,000 yuan, others halved from 6-7,000 yuan to just over 3,000.

On March 16, a post titled “Sales Bottleneck: Meiyijia’s Sales Drop 18%” drew attention. By March 19, some store owners were still lamenting in comments: “We hung a ‘Ten times compensation for fake’ banner, but are mocked daily, and sales have clearly declined.”

▲Meiyijia requires franchisees to sell cigarettes legally and compliantly.

The trigger was on March 14, when 10 Meiyijia stores in Guangzhou, Foshan, and Dongguan were exposed for selling fake cigarettes. The Guangdong Tobacco Monopoly Bureau’s investigation revealed a larger issue: by 3:15 p.m. that day, 6,325 stores across the province had been inspected, 306 illegal cigarette cases uncovered, and nearly 1.4 million illegal cigarettes seized.

The distribution of these fake cigarettes across 306 stores is no longer an isolated “mouse dropping,” but reveals a hidden, stubborn gray chain within the vast franchise network.

Even more concerning, this isn’t Meiyijia’s first time in the spotlight over fake cigarettes.

Official judicial documents show that as early as 2019, some Shenzhen stores were involved in criminal cases related to fake cigarette gangs; in 2023, a Shanghai store was sentenced for unlicensed cigarette sales involving nearly 700,000 yuan, with the owner sentenced to five years.

However, for over 40,000 stores nationwide, the real shockwave has just begun.

One store owner commented emotionally: “Once again, not all Meiyijia stores sell fake cigarettes! The cigarettes aren’t controlled by Meiyijia! They’re all managed by the store owners, who decide whether they’re real or fake!”

Who is truly bearing the pressure in this fake cigarette storm?

Who is paying the price?

When the storm hits, the first to feel the chill are always those on the front lines.

For Meiyijia franchisees, public opinion may target the brand, but the real financial loss is theirs to bear. In this vast franchise network, each store’s survival and profitability ultimately rest on the store owner.

And this is precisely the secret behind Meiyijia’s “King of Convenience Stores” status.

Founded in 1997 in Dongguan, Meiyijia took a different path from foreign brands like 7-Eleven, Lawson, and FamilyMart, which mostly operate via direct management or tightly controlled franchises. Instead, Meiyijia adopted a unique model.

The core of this model is simple: franchisees buy out inventory, bear profits and losses, while headquarters earns only from supply margins, franchise fees, and management fees.

For those wanting to open a convenience store, Meiyijia’s appeal is obvious.

Opening a 7-Eleven typically requires an initial investment of 600,000 to 800,000 yuan, with headquarters taking a cut and requiring full-time store management and strict training. In contrast, a standard Meiyijia store requires about 300,000 to 350,000 yuan upfront, with a monthly management fee of only 1,000 yuan, and no profit-sharing from sales. Headquarters doesn’t interfere in daily operations nor require full-time management.

For many ordinary people with some savings seeking a job, paying just over 300,000 yuan to hang the “King of Convenience Stores” sign sounds like a good deal.

Thus, with this low-threshold, low-restriction model, Meiyijia surged forward: surpassing 1,000 stores in 2007, 10,000 in ten years, 30,000 in 2022, and officially entering the “40,000-store era” in July 2025.

▲Meiyijia has reached 40,000 stores. Photo from Lian Shang Wang.

Data shows that by the end of 2024, Meiyijia had 37,943 stores and an annual sales of 55.8 billion yuan, maintaining the top position in China’s convenience store industry for three consecutive years, over 10,000 stores ahead of second-place Easy Joy.

Chairman Zhang Guoheng once compared the company to a “race car driver,” saying Meiyijia can surpass competitors in curves thanks to its “franchise-based, replicable single-store model.” In plain terms: attract people with the lowest barriers, and expand stores as fast as possible.

The problem is, Meiyijia’s “just collect money, not manage operations” model allows franchisees to enjoy autonomy but also bear all operational pressures alone.

Under pressure, every profit counts. Convenience store products generally have low profit margins—snacks, drinks, daily necessities—earning limited money. Cigarettes, however, have become the most relied-upon profit source, contributing 40-50% of sales in many stores, and serving as a key traffic entry point. Many customers enter just to buy cigarettes, then pick up water or snacks.

But under uniform pricing, genuine cigarettes’ profit is squeezed to the minimum. Industry insiders have calculated: a pack of genuine cigarettes costing 218 yuan wholesale, selling at 23 yuan per pack, earns only about 12 yuan profit; fake cigarettes, with a 40-50% lower wholesale price, can double the profit.

While headquarters collects management fees and supply margins, store profits are continually compressed, pushing some franchisees to take risks.

After the fake cigarette incidents, regardless of whether they sold fake cigarettes, franchisees fell silent. Brand reputation suffered, customer flow declined, sales dropped, and even loyal customers began to doubt.

But for Meiyijia headquarters, the impact isn’t necessarily devastating.

From the 2019 Shenzhen fake cigarette case, to the 2023 Shanghai unlicensed sale case, and now nearly 1.4 million fake cigarettes seized, issues are repeatedly exposed. Yet, the number of franchise stores continued to grow: over 30,000 by the end of 2022, surpassing 40,000 by July 2025, with dozens of new stores opening daily.

Even with some stores falling, more are eager to join.

How far can the convenience store king go?

After more than twenty years, Meiyijia’s model seems unbreakable—so long as someone is willing to pay 300,000 yuan, the “40,000-store empire” can keep expanding.

In reality, cracks are quietly spreading.

The first is the shrinking profit margins for franchisees. The “2025 China Convenience Store Development Report” shows that the average daily customer count per store dropped from 346 in 2023 to 311.4 in 2024, and the average transaction value fell from 26.1 yuan to 20.4 yuan. Fewer customers mean less spending, but fixed costs remain unchanged.

According to “Jiemian,” some franchisees have calculated: a 30-square-meter store with a daily revenue of about 5,000 yuan and a gross margin of 23% faces fixed monthly expenses exceeding 10,000 yuan—including 4,500 yuan in staff wages, 1,000 yuan in management fees, plus rent, utilities, and losses. Break-even takes two to three years. Additionally, supply prices are about 5% higher than market prices, with some items like liquor even costing more wholesale than retail.

▲Operational data of a Meiyijia store. Photo from Jiemian.

On one side, revenue declines; on the other, costs rise. Profit margins are squeezed from both ends, and profitability issues emerge.

Fake cigarettes are just the tip of the iceberg. In the past, many Meiyijia stores faced food safety problems.

For example, a store in Lijiang, Yunnan, sold dried meat months past expiration; a Huizhou store’s coconut water had mold on the cap and floating mold inside; a store in Xiamen illegally sold betel nuts, violating a nearly 30-year ban; a store in Daoxian, Hunan, sold hot foods like sausages and corn without a food business license.

Consumer protection platforms report 2,113 complaints about convenience stores from 2022 to 2025, with Meiyijia leading at 630 complaints. On the national 12315 consumer complaint platform, over 5,300 notices involve Meiyijia, covering issues like tobacco, food safety, and after-sales service.

It seems these repeated alarms haven’t fundamentally shaken this retail giant’s foundation—at least in store numbers, it still grows.

But the growth rate has slowed.

In 2021, Meiyijia’s sales increased by 22.8%, far above the industry average of 12.3%. By 2025, new store openings will total only 3,000–4,000, with about 9% growth—still double-digit, but significantly slower than before. Nielsen NIQ reports that the overall convenience store growth rate will drop to 5% in 2025, well below 12% in 2020.

Competitors are closing in.

In South China, Tianfuhui stores are now located near Meiyijia outlets; in East China, foreign brands like 7-Eleven, FamilyMart, and Lawson are vying for the same customers with more refined management and better products.

Currently, Meiyijia still has over 300 cities left to enter, with room for expansion. But the problem is, as franchisees earn less, problematic stores are exposed more often, and competitors tighten their grip—how many are still willing to pay 300,000 yuan for a fading sign?

In fact, some are already quitting. Posts about transferring or selling Meiyijia stores are common on social media.

The 40,000-store milestone is both a glory and a potential burden for Meiyijia.