---
title: "Instant Retail Enters 'Hand-to-Hand Combat' and 'Price War' Stage"
description: "After JD's self-operated supermarket 'JD 7Fresh' integrated with its front warehouses and launched the 'Breakthrough Price, Real Cheap, Not Afraid to Compare' campaign, on November 15, JD 7Fresh again declared: 10% cheaper! If competitors dare to follow, 7Fresh will continue to cut prices. Even though JD 7Fresh previously responded to price war rumors by saying it wasn't targeting anyone specifically, just offering low prices, this fiery statement has undoubtedly escalated the price competition in instant retail, showcasing JD 7Fresh's determination to go low-price."
author: "博雅"
publisher: "New Distribution"
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published: "2024-11-30"
language: "en"
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---

# Instant Retail Enters 'Hand-to-Hand Combat' and 'Price War' Stage

> After JD's self-operated supermarket 'JD 7Fresh' integrated with its front warehouses and launched the 'Breakthrough Price, Real Cheap, Not Afraid to Compare' campaign, on November 15, JD 7Fresh again declared: 10% cheaper! If competitors dare to follow, 7Fresh will continue to cut prices. Even though JD 7Fresh previously responded to price war rumors by saying it wasn't targeting anyone specifically, just offering low prices, this fiery statement has undoubtedly escalated the price competition in instant retail, showcasing JD 7Fresh's determination to go low-price.

After JD's self-operated supermarket 'JD 7Fresh' completed integration with its front warehouses and fully launched the 'Breakthrough Price, Real Cheap, Not Afraid to Compare' campaign, on November 15, JD 7Fresh again made a bold announcement: 10% cheaper! If competitors dare to follow, 7Fresh will continue to cut prices.
Even though JD 7Fresh previously responded to price war rumors by stating it wasn't deliberately targeting anyone, just offering low prices, such a fiery statement now undoubtedly pushes the price competition in instant retail to a new level, clearly showcasing JD 7Fresh's determination to offer low prices.
To some extent, we can view the recent resurgence of the front warehouse model as a window into the escalation of the 'war' in instant retail.
From being controversial and used then abandoned by some fresh food e-commerce platforms, to being revived by players like Hema and JD 7Fresh in the second half of this year, while Dingdong Maicai and Meituan (Xiaoxiang Supermarket, Meituan Lightning Warehouse), which had 'stuck with' front warehouses, have also reported new market developments: the former plans to increase its front warehouse density in Jiangsu, Zhejiang, and Shanghai to 110 locations, while the latter has unveiled a major plan to open 100,000 lightning warehouses by 2027. Additionally, there's the good news that 'Pupu Supermarket's fulfillment cost rate dropped to 18%,' and Ele.me has publicly announced its 'new three-year' strategic layout to open 100,000 near-field official flagship stores...
From O2O to new retail to community group buying to today's instant retail, as the front warehouse model matures and iterates, the supply ecosystems of players like Meituan, JD, Alibaba, Dingdong Maicai, Pupu Supermarket, and Sam's Club are becoming increasingly prosperous, and the competitive landscape of instant retail has already begun to take shape.
**Local Life Services Move Toward 'Open Warfare'**
The common highlight in the financial reports of Alibaba (FY25Q2, released Nov 15) and JD (FY24Q3, released Nov 14) is the increase in retail business revenue. Specifically, Alibaba's local life services revenue grew 14% to 17.725 billion yuan, ranking among the top in the group; JD's retail segment achieved revenue of 224.986 billion yuan, a year-on-year increase of 6.1%, still contributing the majority of revenue.
Regarding 'JD Seconds Delivery,' after JD fully upgraded its instant retail business in May this year (integrating 'JD Hourly Delivery' and 'JD Daojia' into 'JD Seconds Delivery'), Dada Group's Q3 2024 earnings report shows that the average monthly ordering users and order volume of JD Seconds Delivery in the JD App both grew over 100% year-on-year. As of the end of September, JD Seconds Delivery had over 600,000 operating stores, up more than 70% year-on-year.
The latest financial data from these internet companies reveals the development trend of local life services and instant retail. Although the business scale and revenue performance of other leading players have not yet been disclosed, based on recent years' data, in absolute terms, Meituan still firmly holds the top position in local life services, while the growth rates of newcomers like Douyin and Kuaishou cannot be underestimated.
In my view, based on corporate attributes, the player camp in the instant retail track can basically be divided into three factions: pioneer instant e-commerce companies represented by Dingdong Maicai and Pupu Supermarket; internet resource-based players like Meituan, JD, and Alibaba; and transformative retail enterprises such as Walmart, Wumart, Tianfu Convenience Stores, Miniso, and Watsons.
Figure: Three major camps of instant retail players
Pioneer instant e-commerce companies typically have strong regional characteristics and, to some extent, face market size limitations.
For example, Dingdong Maicai (NYSE: DDL), after achieving profitability in Shanghai in December 2021, further consolidated its advantageous position in Jiangsu, Zhejiang, and Shanghai in Q3 this year, with 13 cities in the region achieving over 50% year-on-year GMV growth.
However, compared to Beijing and Guangzhou-Shenzhen, Dingdong Maicai's GMV grew 14.6% and 2.9% year-on-year respectively this quarter, significantly lower than in Jiangsu, Zhejiang, and Shanghai. It's clear that the long-rooted Jiangsu, Zhejiang, and Shanghai region is Dingdong's core support, and only by focusing on this region and continuing to win battles can it confidently face the rekindled front warehouse competition.
Pupu Supermarket's development follows a similar pattern. From Fuzhou, Xiamen, Shenzhen, and Guangzhou, expanding to Wuhan, Chengdu, and Foshan, under the large warehouse model, Pupu has shown a trend where advantageous regions become stronger in cost control and operational efficiency.
Internet resource-based players typically adopt a style of concentrating resources and launching dimensionality-reducing strikes. Drawing from past community group buying competition, platforms can use various resources to expand territory, 'roll' out scale, and save costs across all links to 'save' out profits. Of course, the starting point for all this remains the crisis brought by the decline of traffic dividends.
As for transformative retail enterprises, they have basically experienced a mindset shift from 'wait-and-see' to 'have to do it.' Although they have a strong intention to follow trends and test the waters, the possibility of turning back is also significant. This reflects the maturation and iteration of the front warehouse model, the general trend of instant retail, and the question of how 'warehouse-store integrated' enterprises should proceed next.
The advantage of such enterprises lies in their ability to quickly digitize existing stores. Apart from those preferring to keep operational control in their own hands and choosing to build their own front warehouses, such as Hema, RT-Mart M Membership Store, and JD 7Fresh, some retailers or brand owners lacking interconnected digital operation systems and mature fulfillment capabilities are currently more willing to cooperate with third-party platforms like Meituan Flash Purchase, adding to Meituan Lightning Warehouses, or directly opening near-field official flagship stores on Ele.me. This is seen as one of the most convenient paths to achieve standardized, intelligent, and instant 'consumption, fulfillment, and after-sales.'
Players of the three types each have their own strengths, weaknesses, and resource dependencies. Moving from covert warfare to open warfare, the 'battle' is over the number of front warehouse locations and profit models, while the 'comparison' is over product strength and price competitiveness.
Taking the Guangzhou-Shenzhen market as an example, Pupu Supermarket, Sam's Club, and Xiaoxiang Supermarket hold the top three market shares. Other traditional chains like Walmart, China Resources, and Rainbow face significant pressure, but while ensuring store service fulfillment and exploring regional online consumption trends, they have also begun to explore differentiation from online from the perspective of quality living spaces. This is a beneficial practice to avoid the 'poisonous' single role of a 'warehouse.'
**Uniform 'Tactics': Fresh Food for Traffic, Private Labels for Support, Regional Victory**
Fierce competition burns through everyone's budget, manpower, and patience, but there's nothing new under the sun. The recurring patterns and phenomena in business and history indicate that even in 'instant retail,' considered a new retail format and consumption model, the available moves are limited and even identical.
**First, fresh food for traffic.**
As one of the few retail sectors maintaining significant growth, fresh food is undoubtedly the core competitive point. The product structure of using fresh food to attract traffic and standard products for profit remains the standard model for instant e-commerce at this stage.
Although the front warehouse model is widely used in fresh food retail, due to high construction costs and operational difficulty, whether this model can 'work' has been highly controversial. The root of the problem is that fresh food itself is a category with high loss rates and low purchase frequency, easily falling into the dilemma of high product loss, low gross margins, and higher costs without scale orders.
This is why instant retail, starting from fresh food, ultimately moves toward full-category offerings, focusing on private labels, prepared dishes, and leisure goods, all to improve profit margins and survive better.
**Second, private labels for support.**
Dingdong Maicai, Hema, and Pupu Supermarket are all emphasizing the development of private label products. Currently, Dingdong Maicai's private label products have a user penetration rate of over 70%. Pupu Supermarket's private label matrix, centered on 'Youci' and 'Suizi,' is expected to achieve sales of nearly 5 billion yuan this year, accounting for 15%-20% of total sales. Hema's private labels have even gone overseas.
Figure: Private label products of Dingdong Maicai and Pupu Supermarket
In my view, private labels are not just a tool for low prices; more importantly, they demonstrate the brand's and platform's understanding of target customers, which cannot be copied. The core value of private labels is achieving 'inclusiveness' through scale effects.
Taking Junlebao yogurt, which I have repurchased multiple times, as an example: Pupu Supermarket sells the branded product 'Junlebao Jianchun 0 Added Sucrose Flavored Yogurt Bucket 1.2kg' at a promotional price of 16.9 yuan (original 19.9 yuan), while Xiaoxiang Supermarket, in collaboration with Junlebao, developed 'Xiaoxiang x Junlebao Chunxiang Probiotic Flavored Fermented Milk 1.2kg' for only 9.9 yuan (original 12.9 yuan).
Junlebao yogurt Image source: Meituan and Pupu Supermarket apps
When product weight, packaging, and taste are similar, products co-developed by channel merchants and brand suppliers can effectively improve profit margins and profitability. For consumers, the product strength of related products is immediately evident on the price side.
**Third, regional victory.**
Looking at recent changes in the competitive landscape of the front warehouse model in instant retail: JD 7Fresh completed front warehouse integration, upgrading products and services while increasing market investment with 'Breakthrough Price'; Hema chose to restart front warehouses in Shanghai, but cost challenges remain unresolved, with limited short-term impact on Dingdong Maicai's expansion space; Xiaoxiang Supermarket is advancing faster in North and South China, with relatively steady business expansion in East China.
Currently, the race among platforms in front warehouses is mainly reflected in the fierce competition for grassroots delivery personnel and ground promotion staff. The accumulation and release of regional advantages and the high-density layout of front warehouse stores ultimately point to reducing fulfillment costs, improving delivery efficiency, and achieving economies of scale through supply chain scale effects and increased order density.
When we further review the current state of instant retail competition, it seems only Tmall Supermarket has been quiet? Interestingly, Alibaba was actually the earliest forward-thinking player to propose the concept of 'near-field e-commerce.'


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