In the past two years, two retail formats have maintained rapid growth: discount retail and instant retail. First, look at the discount format. In an environment of intense competition and continuous store closures in supermarket retail, discount stores emphasizing high cost-performance have experienced rapid expansion. Retailers, whether focused on offline or online, have been experimenting with discount stores. Hema has vigorously promoted its discount transformation, Hema Outlets has accelerated store openings, Dingdong Maicai has explored outlet stores, and JD.com has entered the discount supermarket space. Meanwhile, established players in the discount sector have also achieved impressive results. Aldi, which is rapidly opening stores globally, Costco with its rising performance, and HotMaxx and Hi-TGO, which focus on vertical discount tracks, have all opened hundreds of stores nationwide. Now, look at instant retail. According to the "Instant Retail Industry Development Report (2023)," instant retail has maintained an average annual growth rate of over 50%, with a market size of 504.286 billion yuan in 2022, and it is expected that by 2025, the instant retail market will be three times its 2022 size. Moreover, the categories in instant retail are becoming increasingly diverse, from early supermarkets and convenience stores to now pet supplies, beauty, and mother-and-baby products, with various retail formats accelerating their layout in instant retail. As the two hottest formats currently, New Distribution observes that more and more chain discount brands are actively embracing instant retail, such as HotMaxx and Hi-TGO. This type of soft discount store model is even called the offline version of "Pinduoduo."** HotMaxx and Hi-TGO, which focus on high cost-performance, meet the consumption needs of offline "browsing and buying" customers for alcoholic beverages, snacks, drinks, and various daily necessities through refined "thousand-store, thousand-face" product management and operations, as well as a rich global selection. Instant retail, on the other hand, primarily meets online consumers' urgent or certain consumption needs. It can be said that these two formats are complementary, yet to some extent mutually exclusive, but they are continuously integrating. In New Distribution's view, this change is not only a response to market trends by discount stores to meet the needs of more online consumers, but also an inevitable choice for them to further integrate online and offline, continuously improve store-level refined operations, and achieve sustained growth. The New Stage of Instant Retail Competition is in Refined Operations The evolution of retail is essentially about better and more efficiently meeting consumers' ever-changing needs. Why is it said that instant retail has entered a new stage? Today's instant retail is not just about meeting consumers' urgent needs but more about meeting their daily convenience needs. New demands naturally give rise to new incremental opportunities, and many merchants have achieved rapid expansion through this. However, at the same time, the shift in demand has also led to significant changes in the competitive landscape and business logic. The first change is that the categories and formats of instant retail are more diverse. Early instant retail was relatively simple, initially covering food delivery, then gradually extending to fresh food and grocery with front warehouses, and later to supermarkets and convenience stores. As instant retail matures in its model, more and more segmented formats, such as discount stores, alcoholic beverages, pet beauty, mother-and-baby, and daily necessities, are accelerating their layout in instant retail. For traditional retail enterprises, instant retail has become a necessary option for long-term development. The second change is that the instant retail format is more complex. Instant retail has shifted from being primarily fresh food to now entering a mixed format. Early instant retail players, such as Hema and Dingdong Maicai, are also making corresponding changes to their category structures, such as Hema's non-fresh food categories accounting for over 30%. The third change is that the boundaries of instant retail formats are gradually blurring. In the past, traditional retailers doing instant retail mostly simply uploaded their offline store products online. Whatever the store sold, the online platform would list. Today, in instant retail, these boundaries are being broken down. For example, supermarkets used to only sell FMCG, but now they might also sell beauty products, daily necessities, etc. A typical example is the lightning warehouse, a front-warehouse model convenience store, initially explored by many traditional small and medium convenience stores and expanded through instant retail platforms, basically covering many categories such as FMCG, daily necessities, and beauty. The product structure is no longer fixed shelf-based offline, but dynamically added and replaced based on consumer preferences, sales data, etc. With more and more participants in the track, the ecosystem is becoming more complex, and boundaries are becoming more blurred. For merchants, opportunities and competition in instant retail coexist. In this context, growth obtained solely through natural traffic is no longer sufficient to build a strong moat in fierce competition. What retailers need to strengthen in the instant retail field is how to improve efficiency and reduce costs through refined operations. Behind the Refined Operations of Instant Retail Is Solving the Differentiated Pain Points of Various Formats "Retail is an industry that relies on experience, accumulation, and precipitation." An industry insider observed that the operational pain points of different formats are quite different. For example, the supermarket format has large stores with multiple layers and complex reconciliation; the convenience store format involves fresh food management and few people with many tasks; discount stores have rapid replacement, many discounts, and many near-expiry products; convenience warehouses are purely online, with scale chains and difficult procurement... Of course, this also places higher demands on the service providers behind retailers, requiring them to provide optimal solutions based on the pain point differences of different formats. This makes it easy to understand why Meituan Qianniuhua recently launched its "All-Industry Instant Retail Solution Matrix" , which distinguishes by format and provides different digital and intelligent adaptation solutions for supermarkets, convenience stores, convenience warehouses, mother-and-baby, beauty, department stores, fresh food, and other formats. ▲ Various formats require precisely adapted instant retail solutions. On June 27, Meituan Qianniuhua released its "All-Industry, Full-Chain Instant Retail Solution Matrix" , covering all instant retail formats including supermarkets, convenience stores, discount stores, convenience warehouses, mother-and-baby, pets, beauty, and fresh food. It provides a full-chain digital solution supported by the "three pillars" of "products, services, and resources" , helping retail merchants enhance their digital and intelligent level in instant retail. As early beneficiaries, traditional supermarkets and convenience stores have relatively mature operations in instant retail. However, new formats such as lightning warehouses, beauty stores, and discount stores have higher business complexity and greater operational difficulty, meaning they require stronger operational and management capabilities. Take discount retail as an example to see how complex and cumbersome the problems they face in instant retail are. The first difficulty is how to transfer the price advantage online. The discount model differs from traditional supermarkets and convenience stores in that product pricing is highly dynamic. Pricing changes dynamically based on different quantities, seasons, and near-expiry situations. Moreover, the rules for promotional interfaces vary greatly across platforms like Douyin, Meituan, and Ele.me. This is also the core advantage of the discount format—price power. How to transfer price power to the platform is the most critical proposition for discount merchants. "Every product has a promotional price and a strikethrough price, which is a special phenomenon in the discount format. Previously, we could only achieve daily offline inventory synchronization, with prices synced once a day, leading to huge price differences between online and offline. Now, after connecting our self-developed ERP with the Meituan Qianniuhua system, we can achieve data connectivity for over 300,000 products across 800 stores on different platforms, allowing rapid adjustment of products and prices," said the relevant business head of HotMaxx. The second difficulty is how to manage high-frequency SKU replacement. The discount model has a characteristic: many products are purchased opportunistically, leading to random procurement in many stores, and the products in stores are not the same. Allocation is based on algorithms, surrounding user profiles, and past sales of nearby stores. This means a massive number of SKUs are launched each quarter. Taking HotMaxx as an example, the warehouse turnover is about 5 to 6 days, with over 50,000 products in store, and managing 30,000+ SKUs monthly, making new product launch management very difficult. An industry observer believes, "In the discount format, the priority of getting products on shelves in time is often greater than perfecting product information. Handling product information manually results in low launch efficiency, and good-priced products are always limited. Through systems like Meituan Qianniuhua, new product information from the ERP can be directly adapted to online sales needs, quickly enabling online sales of new products. " The third difficulty is how to manage high return rates caused by inventory issues. Discount stores typically manage shallow inventory, and while selling online, they also sell offline. This model makes it difficult to synchronize offline inventory in a timely manner, leading to situations where products are still being sold online but are out of stock offline. The relevant business head of HotMaxx also mentioned, "When HotMaxx first started instant retail, the overall out-of-stock refund rate was very high, with a 20-30% return rate, far higher than the traditional retail industry. With the help of the Meituan Qianniuhua system, HotMaxx has improved the inventory accuracy of its thousand-store, thousand-face approach. After online and offline orders are fulfilled, inventory is deducted in real-time, and the overall return rate can be controlled within 10%. " The fourth difficulty is how to manage the differences in product demand caused by differences in online and offline consumer groups. The consumer groups of discount stores and online are often different, meaning the product demand behind them is different. A discount store industry insider told New Distribution, "Hi-TGO's stores are mainly in business districts, with women accounting for over 70%, mainly for browsing and buying (random), and new and differentiated products can attract consumer interest." "Online, the reach is broader, and consumer demand is certain, more for fast-moving products with brand endorsement. So we conduct product insights and consumer preference insights, make better adjustments to the product structure, and control the proportion of fast-moving products within a certain range." These are the differentiated pain points of the discount format in instant retail. Similarly, other new formats will also face differentiated pain points when doing instant retail, and the corresponding solutions will inevitably be different. For example, pet products need order transfer capabilities, beauty products need buy-one-get-one capabilities, leisure snacks need to solve bulk weighing, department stores need to solve bulk purchase ordering, and discount stores need to solve product promotions. The Space for Instant Retail is Huge But It Is Also Survival of the Fittest Many people may have this question: instant retail is so competitive now, how much market is there in the future? Is there still opportunity? Zhao Bo, founder of New Distribution, mentioned a viewpoint during his market visits this year: "In the next five years, the channel that can maintain continuous growth in a shrinking market is instant retail." According to the "2023 Instant Retail Development Trend White Paper," instant retail is a new blue ocean in the online and offline market. In 2022, China's instant retail market size exceeded 590 billion yuan, equivalent to 1.4% of total retail sales of consumer goods; it is expected that by 2030, the instant retail market will grow to 3.6 trillion yuan. This means that the trillion-yuan instant retail market is still a track worth deep cultivation for traditional retail. But for retailers, deep cultivation requires step-by-step effort. From single-store product replication to chain product management to large-scale refined operations, retailers need to enhance their digital and intelligent level, use efficiency and cost leadership to gain a firm foothold in instant retail, and become refined and strong.