---
title: "Is Instant Retail Revolutionizing E-commerce or Food Delivery?"
description: "With the continuous upgrading of new technologies and models in the mobile internet era, a new model and business format has emerged from the 'involution' of e-commerce and food delivery: instant retail. It meets the 'last mile' demand in retail, compressing fulfillment time to between half an hour and one hour. According to a white paper released by the China Chain Store & Franchise Association, the instant retail industry has seen rapid growth and is expected to reach 1.2 trillion yuan by 2025. Is the instant retail trend here? Some say it's just a variant of food delivery, while others see it as another 'fake innovation' by e-commerce platforms after exhausting community group buying and low-tier market e-commerce. However, giants like Alibaba, JD.com, Meituan, and players like PUPU and Dingdong Maicai have all entered the fray in various forms."
author: "关注电商的"
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published: "2022-10-15"
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# Is Instant Retail Revolutionizing E-commerce or Food Delivery?

> With the continuous upgrading of new technologies and models in the mobile internet era, a new model and business format has emerged from the 'involution' of e-commerce and food delivery: instant retail. It meets the 'last mile' demand in retail, compressing fulfillment time to between half an hour and one hour. According to a white paper released by the China Chain Store & Franchise Association, the instant retail industry has seen rapid growth and is expected to reach 1.2 trillion yuan by 2025. Is the instant retail trend here? Some say it's just a variant of food delivery, while others see it as another 'fake innovation' by e-commerce platforms after exhausting community group buying and low-tier market e-commerce. However, giants like Alibaba, JD.com, Meituan, and players like PUPU and Dingdong Maicai have all entered the fray in various forms.

With the continuous upgrading of new technologies and models in the mobile internet era, a new model and business format has emerged from the 'involution' of e-commerce and food delivery: instant retail. It meets the 'last mile' demand in retail, compressing fulfillment time to between half an hour and one hour.
According to a white paper released by the China Chain Store & Franchise Association, as an important part of the combination of online and offline, the instant retail industry has seen rapid growth and is expected to reach 1.2 trillion yuan by 2025.
**Is the instant retail trend here?**
Some say instant retail is just a variant of food delivery, while others think it's another 'fake innovation' by e-commerce platforms after exhausting community group buying and low-tier market e-commerce. However, giants and players like Alibaba, JD.com, Meituan, PUPU, and Dingdong Maicai have all entered the fray in various forms.
**So, what exactly are the differences between instant retail, food delivery, and e-commerce? What is the current competitive landscape of instant retail in China? Will instant retail be the next community group buying or low-tier market e-commerce?** This article will mainly discuss these three questions.
**01**
**Is instant retail just faster and shorter food delivery?**
The earliest instant retail can be traced back to Gopuff, a delivery platform founded in the United States in 2013. Gopuff has stated that 'with technology coordination and trained staff, it can complete the entire process of picking, packing, and sending orders in as fast as 90 seconds.' Such delivery, which shortens delivery time, can to some extent be called 'instant retail.'
The Ministry of Commerce's 'Report on the Development of China's Online Retail Market in the First Half of 2022' explicitly mentions 'instant retail' and points out its important value in 'deep integration of online and offline.'
Instant retail is a business model that is very similar to food delivery but goes further in the integration of online and offline.
Its main feature is 'order online, deliver within 30 minutes offline.' With the rapid improvement of new business model infrastructure and urban delivery service networks, **it is characterized by 'local stores + instant delivery,' with supply highly dependent on local stores.**
Although instant retail originated from e-commerce, it has different advantages and disadvantages compared to e-commerce.
**The advantage of instant retail lies in the word 'instant' in its name. In the food sector, where timeliness is crucial, instant retail has a significant advantage.** The main advantage of e-commerce is its wide service range. E-commerce services can radiate to almost the entire country and even some foreign countries and regions.
**The recently emerging 'instant retail' in China combines the characteristics of traditional food delivery and e-commerce.**
**It is delivered through logistics methods like Meituan's 'Flash Purchase,' JD.com's 'Hourly Purchase,' and SF City's 'Instant Delivery,' which emphasize timeliness over delivery distance. The fulfillment process often consists of 'basic delivery riders + intelligent dispatch system.' The sending end can be stores, front warehouses, enterprises, or individuals.** Currently, stores and front warehouses are the main sources of orders.
The current instant retail industry can be summarized into two mainstream models: the platform model (referred to as platform model) that focuses on delivery, and the full-chain self-operated model (referred to as self-operated model).
The platform model mainly includes Meituan, JD Daojia, and Alibaba (Ele.me), which are based on platforms and connect other merchants and their own sources. The self-operated model mainly includes Hema, PUPU, and Dingdong Maicai, which can self-operate the entire chain from goods to warehousing to delivery.
Of course, there are also other chain supermarket brands like RT-Mart and Wumart Duodian that rely on their own supermarkets for instant retail, but most of them are currently connected to other platforms and are not large in scale, existing only as a supplement to physical retail.
It can be seen that whether it's e-commerce and food delivery giants or emerging vertical players, they all show great interest and market expansion desire in instant retail. What kind of market is this, and how are various players laying out their strategies? Let's take JD.com, Meituan, and Tmall as examples to see how these players are entering the instant retail market.
**02**
**JD.com's 'Hourly Purchase' often takes more than an hour**
With its nationwide urban network, logistics advantages, and rider advantages, JD.com, although not as strong as Meituan in food delivery, has strong potential in retail-to-home services, covering 80% of the top 100 retail chains.
Data shows that during the 2021 Double 11, JD.com integrated entries like 'JD Daojia' and 'JD Fresh' hourly delivery, and launched the instant retail brand 'Hourly Purchase' for the first time, with a target of penetrating 50% of JD users.
When selecting products on the JD app, if you place an order for items with both 'self-operated' and 'minute delivery, hourly delivery' labels, you can enjoy JD's self-operated quality assurance and experience the instant retail service of one-hour delivery.
'Hourly Purchase' is a collection of all of JD.com's instant retail capabilities that can provide hourly delivery services. Data shows that currently, JD Hourly Purchase and JD Daojia have connected 150,000 physical retail stores, covering more than 17,000 counties, districts, and cities, cooperating with over 200 brand merchants, including categories such as supermarket fresh food, mobile phones and communications, digital home appliances, medicine and health, beauty and skincare, etc. The category coverage is already quite comprehensive.
Due to the continuous increase in overall user shopping frequency, consumers' consumption frequency for food and beverages, fresh food, maternal and infant products, etc., has all increased, and the per capita order volume for large supermarket categories has continued to rise.
The consumer group in the instant consumption industry has expanded from young women to all customer groups including men and middle-aged and elderly users. The regions for instant consumption have also expanded from first- and second-tier cities to low-tier city markets 'outside the Fifth Ring Road.' The product categories for instant consumption have also achieved significant expansion.
The Hourly Purchase page on the JD app can be accessed by swiping right on the homepage. We found that **most delivery times are stuck around 60 minutes, and the slogan is 'fastest arrival within one hour.' Many products have delivery times close to two hours, which is not quite consistent with the 'Hourly Purchase' name.**
We called JD Daojia's investment promotion customer service. The other party said that **to join JD Daojia's instant retail merchants, you first need to have a physical store that meets JD's requirements, including certain requirements for storefront cleanliness and geographical location.**
The difference from ordinary food delivery is that JD Daojia combines merchants from categories such as supermarket delivery, food delivery, quality life, door-to-door services, and health delivery to form JD Daojia.
**03**
**Meituan's 'Flash Purchase' still belongs to the Meituan food delivery system**
As the number one player in food delivery in China, Meituan's entry into instant retail is natural and without hesitation.
**Through online consultation with Meituan Flash Purchase's investment promotion customer service, we learned that Meituan Flash Purchase services still belong to the Meituan food delivery system and use the same Meituan food delivery merchant version system.**
The difference from ordinary food delivery is that Meituan Flash Purchase divides products that can be delivered within 30 minutes and non-restaurant 'to-home' services into Meituan Flash Purchase, which is equivalent to selecting categories that meet speed requirements from food delivery to form the Meituan Flash Purchase system.
Even under the impact of the pandemic, Meituan's core local commerce division still achieved 9.2% revenue growth in the second quarter of 2022, with operating profit increasing 39.7% year-on-year to 8.3 billion yuan, and operating profit margin rising to 22.5%. Among them, the total order volume of food delivery and Flash Purchase businesses increased by 7.6% year-on-year.
Among them, high-frequency users contributed higher purchase frequency. Analysts at SPDB International believe that the platform's continuous fulfillment during the pandemic helps cultivate user habits, making food delivery an important dining scenario.
As Meituan's main business for instant retail layout, the Flash Purchase business continued to grow rapidly, with average daily orders reaching 4.3 million in the second quarter of 2022. Both user numbers and transaction frequency increased. Under the pandemic, average prices rose, improving Flash Purchase's UE model. Instant retail will continue to be the company's main development direction in the future.
Analysts believe that Meituan's instant delivery network built on its food delivery business, through merchant category expansion, is expected to maintain high order volume growth.
**04**
**'Tmall Xiaodian' relies on group buying groups for orders?**
Anything related to merchants is what Alibaba cares about. Alibaba's layout for instant retail includes logistics, outlets, and physical retail support, among which Tmall Xiaodian is one of its terminal representatives.
**Tmall Xiaodian stores are mostly located at the entrances of residential communities, providing instant retail services to the community and a certain surrounding area.**
A Tmall Xiaodian store owner, Mr. Tang, told Qipai Pai that Tmall Xiaodian uses the 'Tmall Warm Home Convenience Store' mini-program, which can be accessed by scanning a QR code via WeChat or Alipay to reach the ordering interface. After placing an order, the store will see the order in the backend and start preparing the goods, similar to food delivery.
**The difference from food delivery is that when a customer places an order, the store clerk and the owner together prepare the goods, and then the owner personally delivers the goods to the customer's home, charging on a cash-on-delivery basis, so it is much faster than ordinary food delivery.**
But Tmall Xiaodian stores are also having a hard time. **Although his store still bears the Tmall Xiaodian name, the platform has almost never supported him. 'It's all up to me. Apart from paying commissions, I have no relationship with the platform. Many orders are only received through group buying groups,' Mr. Tang complained.**
By contacting Tmall Xiaodian's customer service by phone, we learned that the franchise conditions for Tmall Xiaodian, in addition to the usual business license and operating permit, also require a store area of more than 50 square meters, monthly physical product purchases from the platform exceeding 10,000 yuan, access to the smart store management system, and providing a set of shelves in the prime position of the store to display Tmall Xiaodian recommended products.
**05**
**Is instant retail a lifeline for traditional supermarkets?**
As the leading companies in the e-commerce and food delivery industries, Alibaba, JD.com, and Meituan seem to have not invested too much thought in instant retail. So how do traditional supermarkets view instant retail?
According to Euromonitor statistics, in 2021, China's supermarket market size exceeded 3 trillion yuan, but overall market growth was weak, with a compound annual growth rate (CAGR) of only 2.6% from 2018 to 2021, and the hypermarket format had a CAGR of -0.4% during the same period.
The offline supermarket market in China has shrunk significantly, and the sales performance of several major supermarket giants has also declined, which is not optimistic.
According to the '2021 China Supermarket TOP100' released by the China Chain Store & Franchise Association, in 2021, including Yonghui Superstores and RT-Mart, which ranked second and third, 62 supermarket companies in China experienced negative sales growth, nearly double the number of companies with negative growth compared to the previous year.
In terms of instant retail, the long-established convenience store chain Lawson has been successively entering major food delivery platforms since 2018, and online platform sales now account for 10% of Lawson's sales. At the same time, the overlap ratio between online and offline consumers is less than 10%, meaning that most online orders are incremental.
Another local convenience store, Meiyijia, has seen order volume from instant retail platforms grow by over 100% in the past three years. After encountering bottlenecks in offline supermarkets, the founder of Jiamei Legou has opened more than 20 new convenience stores on food delivery platforms since 2020, and instant retail orders have now exceeded offline orders.
It can be seen that **at a time when offline retail business is cold, traditional supermarkets have achieved certain performance growth by accessing instant retail business. Although the growth volume is still far from accounting for a large proportion compared to their original business, the growth in online instant retail is new increment beyond offline consumption.**
It should be noted that this is only the performance just after accessing instant retail. As the degree of integration increases in the future, it can be clearly seen that the development prospects of instant retail are bright.
**06**
**Final Thoughts**
Traditional offline retail is overall weak and declining, and instant retail has become one of the few new solutions. But for e-commerce and food delivery giants who are familiar with online traffic and new model gameplay, the value of instant retail may be different.
**After the low-tier market e-commerce battle has reached its end and community group buying has almost been disproven, giants urgently need a new way to attract traffic and a business model to open up market space and growth imagination. Instant retail emerged at the right time, but it does not seem to have shown strong momentum.**
From the current layout of the giants, instant retail has not become their only choice, and the funds and investment are not large. Players in the vertical track such as PUPU and Dingdong Maicai have also not made instant retail their main selling point.
The development of instant retail greatly depends on the efficiency of local supply, the improvement of service capabilities, and the reduction of costs. This determines the future development space of instant retail and tests the capabilities of offline retail.
Only when the local retail format is more prosperous, more densely laid out, more efficient, with better experience and lower costs, can instant retail better meet the diverse needs of consumers.
**Therefore, instant retail may not be a revolution against food delivery or e-commerce, but rather an opportunity for traditional supermarkets like Yonghui, Wumart, and RT-Mart to transform and survive.**
References:
1. SPDB International, 'JD.com: Building a High Supply Chain Moat, Focusing on Instant Retail';
2. Huaan Securities, 'Local Core Commerce Exceeds Expectations, Instant Retail Grows Rapidly';
3. New Hunan, 'Can Instant Retail Become a New Trend in County Economies?';
4. New Retail Finance, 'No One Can Sing a Solo in Instant Retail';
5. Shen Ran, 'How Can Traditional Supermarkets Retain Young People?';
6. Workers' Daily, 'Why Has Instant Retail Become a New Trend?'.


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