In the evolution from food delivery to delivering everything, the importance of retail capability has been significantly elevated. Among the three giants, apart from Meituan, which only recently proposed the 'retail + technology' positioning, JD and Alibaba have long-standing retail expertise with numerous business lines covering both self-operated and platform models. Seamlessly integrating previously independent retail capabilities with instant delivery capabilities is essentially a re-coordination of existing resources. This means that the current challenges in instant retail are largely organizational.
Instant retail is a business model that leverages instant delivery capabilities (instant logistics) to match instant consumer demand with instant commerce supply.
Before the definition of instant retail expanded to 'delivering everything,' the narrow definition of instant consumer demand was essentially ordering takeout, and the instant commerce supply based on local supply was composed of various restaurants and retail stores within a 3-5 kilometer radius.
From food delivery to delivering everything, what remains unchanged is instant delivery; what expands are the categories that need to be provided by local supply (mainly retail categories at this point), and the consumer mindset that needs to expand alongside category expansion (because instant consumer demand is primarily met through search-based discovery, not recommendation-based discovery).
From a horizontal comparison of different businesses, unlike community group buying, which builds both supply and demand from scratch, much of instant retail's infrastructure comes from the reuse of existing resources such as offline delivery networks, merchants, and user bases.
Here, 'existing resources' means there are traditional dominant giants, mainly three: Alibaba, JD, and Meituan.
From a vertical perspective of business evolution, the foundation for mindset expansion is category expansion, which requires the organizational capability of local supply chains—more broadly, retail capability.
Among the three giants, apart from Meituan, which only recently proposed the 'retail + technology' positioning, JD and Alibaba have long-standing retail expertise with numerous business lines covering both self-operated and platform models. Seamlessly integrating previously independent retail capabilities with instant delivery capabilities is essentially a re-coordination of existing resources.
Here, 'existing resources' means that developing instant retail involves maneuvering within the existing system.
In other words, the current challenges in instant retail are largely organizational structure issues.
Although the importance of instant retail in the broader retail landscape has become increasingly prominent—especially with the surge in local stockpiling demand during home confinement—and the blueprint for a trillion-yuan market is visible, the progress among the three advantageous platforms varies in speed.
The speed of organizational restructuring is typically related to the maturity and dispersion of the capabilities required for instant retail within the original organization, as well as the importance attached to the overall instant retail business within the enterprise.
Regarding the maturity of each foundational capability:
Meituan excels in infrastructure and consumer mindset from the food delivery era, but its layout for long-tail and near-field e-commerce is just beginning, with the most homework to do in merchandise organization and brand collaboration. JD excels in continuous supply chain deepening, but still faces the challenge of deeply integrating online and offline supply chains. In terms of instant consumer demand, JD Daojia's mindshare is far behind Meituan and Ele.me. Alibaba appears to have the most comprehensive capabilities across long-tail, near-field, and same-city, but its individual strengths are often not outstanding.
Regarding the dispersion of each foundational capability:
Meituan's existing system essentially consists of the rider team + small and medium local merchants on the platform + the under-construction Lightning Warehouses and long-tail e-commerce. The latter are based on new business lines, requiring fewer coordination efforts. JD's delivery capabilities are mainly provided by JD Logistics and Dada. Retail aspects include JD self-operated, third-party merchants on the platform, and offline JD convenience stores, JD exclusive stores, 7Fresh, etc., which are relatively concentrated. Alibaba's related business lines include Taobao, Tmall Supermarket, Taoxianda, Ele.me, Lingshoutong, Hema, and Sun Art Retail, making it the most dispersed, with multi-day delivery, next-day delivery, and same-day delivery across different systems, posing the greatest coordination challenge.
Finally, regarding the importance attached to the overall instant retail business within the enterprise:
Alibaba has the highest business complexity, and organizational mobilization related to instant retail is not the top priority. JD and Meituan have business mainlines more closely related to instant retail, so they are both highly valued. The difference is that for these two companies, which have almost only participated in community group buying and instant retail in recent years, the priorities of community group buying and instant retail seem to differ.
As a result, Alibaba is clearly the slowest, JD responds the fastest among the three, and Meituan is strategically attentive but tactically conservative.
01 Alibaba: First to Arrive, Late to Act
From the current results, Alibaba is the slowest in instant retail.
Although as early as 2020, Zhang Yong regarded the same-city retail battlefield as a core business and No. 1 project, and established the Same-City Retail Business Group in April of that year, we believe one key factor for its failure might be the premature exit of Li Yonghe, who was highly anticipated in this business due to an unexpected incident.
Li Yonghe worked at JD for 5 years, serving as Senior Vice President of JD Mall's operations system, and was Hou Yi's superior during the JD period, specializing in supply chain management. After joining Alibaba in 2018, Li first served as Zhang Yong's assistant, then became President of the Tmall Supermarket Business Group, which was later upgraded to the Same-City Retail Business Group.
In the mid-2021 organizational adjustment, Li Yonghe took over local life services, reporting to Yu Yongfu. Li, who had honed next-day and half-day delivery experience for years, was a strong asset to lead Ele.me's 30-minute delivery toward synergy with other business models.
But just a month later, Li was forced to resign due to a subordinate's alleged sexual assault scandal, and his duties were taken over by Yu Yongfu. It wasn't until mid-2022 that a new president for local life services was officially appointed, and this new president came from an HR background, lacking significant experience in specific business operations compared to Li.
By the end of 2021, Alibaba made another organizational adjustment that continues to this day. Zhang Yong stepped back further, and several businesses he directly managed, including same-city retail, were divided into segments. Four major segments were formed: China Digital Commerce, Cloud and Technology, Local Life Services, and Overseas Digital Commerce, with respective presidents reporting to Zhang Yong.
Alibaba's cost reduction, efficiency enhancement, and operational responsibility system are still ongoing, and the core goals of each business line have been redefined.
Under the current organizational structure, those directly related to instant retail include Taobao, Tmall, and Taote (long-tail e-commerce) in the China Digital Commerce segment; Tmall Supermarket, Taoxianda, Lingshoutong, Hema, and Sun Art Retail (near-field e-commerce and instant retail); and Ele.me in the Local Life Services segment.
The reason for dispersion across segments is that in Alibaba's internal terminology, retail was divided into regional retail (Taobao/Tmall), local retail (Ele.me, based on 3 km units), and same-city retail (Tmall Supermarket + Taoxianda + Hema, with Tmall Supermarket as the core, based on city units).
Although from today's perspective, local retail and same-city retail overlap significantly, the distinction may be because Tmall Supermarket has its own dedicated delivery network (Cainiao's last-mile brand 'Danniao'), unrelated to Ele.me. There have also been reports that Alibaba is considering establishing a city delivery team for the Same-City Retail Business Group.
It must be acknowledged that Ele.me is indeed weaker. Local life services is currently Alibaba's most loss-making business and was the hardest hit in the first half of 2022 layoffs. As a key support for local life services, Ele.me, acquired early by Alibaba, has been criticized for its organizational execution capability after the founding team left, and its food delivery market share has fallen below 30%.
According to multiple sources close to Ele.me, in Yu Yongfu's OKRs this year, Ele.me's order growth and UE improvement are the core annual goals, with user penetration, core market, and strategic city market share as important indicators. Non-strategic cities will adopt other operational measures.
This means Ele.me's primary task this year is still to strengthen its position in key markets, and cross-organizational and cross-segment coordination and integration are far from being on the agenda. Although Ele.me is also engaging in external cooperation, in terms of direct traffic acquisition, cooperation with Douyin is one of its exploratory paths.
Apart from Ele.me, even business lines within the China Digital Commerce segment are dispersed across different business groups. Tmall Supermarket is in the B2C Retail Business Group; Lingshoutong and Hema, as members of the former Community E-commerce Business Group, have been assigned to Taocaicai, and Hou Yi's reporting relationships with Dai Shan and Zhang Yong have changed multiple times over the past few years; Sun Art Retail, as an external acquisition, also has an awkward position.
Dai Shan has promoted the full integration of Taobao and Tmall this year, decisively abandoned non-core businesses, highlighted firm investment in content areas like Guanguang and livestreaming, and mentioned the integration of long-tail e-commerce, mid-field same-city retail, and near-field instant delivery, as well as the potential for cross-category purchasing.
But from the results, Taobao has indeed made frequent moves in content this year, but no clear action has been taken on the integration of long, mid, and near fields or cross-category purchasing.
Because compared to the integration of long, mid, and near fields, different businesses may have more important things to do. For example, for Tmall Supermarket, compared to delivery time coordination, moving toward a self-operated model—the so-called 'rebuilding JD'—undoubtedly has greater imagination.
Therefore, overall, although Alibaba has the most comprehensive capabilities across long, mid, and near fields, due to the low strategic priority of integration and dispersion across segments and business lines, with specific businesses busy achieving their own operational responsibility goals, Alibaba is currently the slowest compared to JD and Meituan.
02 JD: Proactive, Defensive Counterattack
JD shows the most proactive attitude.
Among the three, JD is undoubtedly the most prominent in supply chain capability. As early as the second half of 2019, JD Supermarket launched the 'Wujing Tianze' project, integrating all offline supermarket retail businesses and opening cooperation with offline third-party outlets. Consumers order online, and orders can be delivered directly by offline third-party outlets, with the fastest delivery in 30 minutes.
When other platforms' 'omnichannel' only meant doing both online and offline at a preliminary stage, JD's definition of omnichannel was already exploring the integration of online and offline orders and supply chains.
During the pandemic years, after Meituan initially opened the instant retail market, JD's organizational adjustments in this business were also the fastest.
JD Daojia was launched as early as 2015 following the O2O boom, but later merged into Dada Group, with limited investment and attention from JD. Starting from March 2021 when JD subscribed to a capital increase and took control of Dada, JD's pace in instant retail accelerated significantly: in November 2021, it launched the Nearby channel and Hourly Shopping; in March 2022, it established the Same-City Shopping Business Department, led by He Huijian, then Vice President of Dada Group, reporting to JD Retail CEO Xin Lijun; in August, Dada Group completed a leadership transition, with Xin Lijun as Chairman of the Board and He Huijian promoted to President.
With same-city retail as the core focus, and food delivery, in-store comprehensive services, and housekeeping as peripheral defense, JD is on high alert.
As the first project he championed after taking office, Xin Lijun also attaches great importance to same-city business.
Moreover, for JD, instant retail is indeed a fortress that cannot be lost.
On the day the iPhone 14 was released, Meituan first announced 'Buy iPhone 14 in stock, fastest delivery in half an hour,' and Dada then stated 'Orders can enjoy hour-level or even minute-level delivery service' and 'JD Daojia is currently the only instant retail platform with Apple brand pre-sale qualification,' showing a tense standoff.
Since building its own logistics system, JD's core advantage in 'more, faster, better, and cheaper' has always been 'faster.' The emergence of instant retail is attempting to overtake with a completely different system, combined with capillary-like offline deep sales systems. If instant retail platforms can smoothly integrate 3C categories, it would directly threaten JD's core business.
JD must not yield an inch here.
At the same time, compared to Alibaba and Meituan, JD's differences in organizational adjustment and strategic choices are closely related to its own genes.
Compared to Alibaba's organizational system, which has experienced cycles of centralization to decentralization, re-centralization, and re-decentralization over the past 20+ years—and even during Zhang Yong's vigorous promotion of the 'big middle platform, small front end' period, Alibaba's middle platform never truly ran smoothly—JD's organizational structure is much simpler.
In 2017, Liu Qiangdong wrote in 'Organizational Evolution under the Fourth Retail Revolution' that to serve diverse scenarios and changing demands, JD's organization needs to become more flexible and agile, becoming a building-block organization.
The meaning of a building-block organization is: break the strong coupling between business links (corresponding to his previous 'Ten-Stick Sugar Cane' theory), making them plug-ins that can be split, configured, and assembled.
This concept is reflected in JD's current organizational structure: business groups such as 3C Appliances, Fashion & Home, and Supermarket Omnichannel are at the same level as the middle platform, reporting to JD Retail CEO Xin Lijun; JD Retail, Logistics, and Technology are at the same level, reporting to Group President Xu Lei.
Modularization or plug-inization means that through unified interfaces, different combinations and overlays can be assembled into the foundation for any business form. The matching of instant logistics and instant commerce required in instant retail can also be more efficiently achieved under this model.
Compared to Meituan, as a company whose main business has reached maturity and has only expanded into two new businesses—community group buying and instant retail—in the past two years, JD's professional manager system may have played an important role in choosing between community group buying and instant retail.
In the community group buying battle, Meituan could still field Chen Liang, a co-founder, Wang Xing's high school classmate, and a trusted insider, to lead the charge. Even if unsuccessful, he could gracefully step away from the business frontline. JD's current management team is composed entirely of professional managers.
Especially in the two years before Xu Lei was officially promoted to JD Group President in September 2021 and the new generation of management gradually took over, JD's management had experienced multiple upheavals since Liu Qiangdong proposed eliminating the bottom 10% of vice presidents and above in 2019. Even key figures like JD Digits CEO Chen Shengqiang and JD Logistics CEO Wang Zhenhui suddenly retired at the end of 2020.
Against this backdrop, combined with the natural attributes of professional managers, they are better at delivering impressive performance reports rather than throwing themselves into the internet world's most money-burning meat grinder battlefield.
Of course, the mismatch between lower-tier market users and JD's platform tone is also a possible reason for JD's halt of community group buying.
Although professional managers are naturally more cautious, Xu Lei has also emphasized his focus on long-term interests on multiple occasions. Just as Taote encountered its difficulties, even if JD can gain more users in lower-tier markets, how to retain, operate, and coordinate remains a thorny issue.
Ultimately, until Liu Qiangdong announced he would personally lead the charge, JD was the latest entrant among the major participants in community group buying. It was also almost the first to voluntarily give up.
In any case, giving up community group buying and betting on instant retail also means JD needs to face this question: Is instant retail for JD just an existing market, and is JD's development space limited to the existing family-oriented users in high-tier cities?
JD's response is that instant retail can not only open the long-term retail ceiling but also deeply connect with offline physical retail, helping traditional retail digital transformation. Instant retail is an important part of JD's omnichannel strategy and a significant extension of JD's existing shopping scenarios. It is a trillion-dollar market with huge potential.
Of course, omnichannel integration still faces countless practical difficulties. Due to the lack of advantageous food delivery platforms like Meituan Waimai and Ele.me, JD's instant consumption mindset still needs to be cultivated.
JD's latest quarterly report emphasized JD Plus members and internal cultivation, proposing goals of improving refined operational efficiency and ensuring healthy profit margins and cash flow, which also means that at least at this stage, JD's choice is to focus on doing what it does best.
03 Meituan: Steady, Moving Forward
Although Meituan Shanguo has been classified as a core local commerce business in Meituan's latest financial report, and although Shanguo was mentioned more than 20 times in the earnings call, in the same call, Meituan management still summarized: Meituan's new businesses with the most strategic value in entering the product retail sector are Meituan Shanguo, Meituan Youxuan, and Meituan Maicai. Among them, the main strategic direction at this stage is still Youxuan and Maicai.
When asked how the company will balance resource investment between Shanguo and Youxuan, Meituan said there is no need to worry about the balance. Shanguo's UE is clear, and even to promote its growth, it doesn't require much capital investment. Therefore, overall resource investment in Shanguo will not be very large, and the current subsidy rate for users will not see significant increases.
This means Meituan's primary task going forward is still to fill the big hole in community group buying and fresh produce, making long-term investments and optimizations in the UE model. Meanwhile, Shanguo, with ample rider capacity and a huge user base, can steadily follow the path of food delivery without needing much worry.
Meituan values instant retail strategically, but tactically, the keyword is: laid-back.
This may be related to the extreme hypothesis Wang Xing proposed at the beginning of the year. Wang Xing hypothesized: if Meituan had no revenue for the next three years, how should the company maintain operations and what should the cash flow situation be?
However, there are differing opinions that Meituan is moving too slowly and should focus on rapidly developing the Shanguo business at this stage.
The starting point for this view is that the instant retail market is positive long-term, and Shanguo has obvious advantages: Meituan can cover 2,800 cities, districts, and counties nationwide (vs. JD Daojia covering over 1,700), with about 1.2 million daily active riders (vs. Ele.me's about 800,000, and JD's riders are even fewer).
But the problem is that Meituan is still too far from brands at this stage. It is understood that especially after the pandemic, brands have rapidly increased their attention to instant retail and set aside more marketing budgets for it. However, due to the lack of long-tail e-commerce layout, Meituan's current approach in the instant retail market still leans toward various full-reduction activities, which brands are not good at, and the platform has not yet provided a complete and closed-loop commercialization path.
At the same time, Meituan's internal retail exploration has not yet formed a synergy. Sources close to Meituan revealed to us that after launching the 'retail + technology' platform strategy, Meituan's overall investment and organizational coordination in the retail sector remain fragmented. E-commerce, same-city e-commerce, Maicai, Youxuan, Shanguo, Lightning Warehouses, and Waima Songjiu—seven retail business lines of varying sizes—each have independent execution teams.
Furthermore, after former Senior Vice President Chen Liang exited the business frontline, the members of Meituan's retail group, apart from Wang Xing and Meituan Platform General Manager Li Shubin, who truly manage actual business are only Guo Wanhuai (responsible for Kuaitu, Youxuan, Maicai, and Meituan E-commerce) and Wang Puzhong (previously responsible for Shanguo, Meituan E-commerce, and Meituan Medicine in the retail line, later Meituan E-commerce merged with the Youxuan Business Department).
One is a trusted insider, the other is not. In our communications, many people also directly targeted Guo Wanhuai, believing she has a special identity and is too assertive, affecting the balance of resource allocation within Meituan.
Whether Meituan's laid-back attitude toward Shanguo is directly related to Youxuan, compared to community group buying born in the hot market of 2020, instant retail is in an era where every company feels the chill. Conservative expansion itself can be understood: vigorous efforts might have worked wonders before, but now more people worry it could tear tendons.
Slowly applying force means accepting slower changes. As Wang Xing once quoted, most people think war is composed of struggle, but it's not; war is composed of waiting and suffering.
But whether the other side of waiting and suffering is 'if you don't advance, you retreat' ultimately requires time to answer.
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