Source | Innovation Retail Society ID | dnwlkjyxgs Author | Ren Wenqing Andy

Regarding instant retail, one recent event deserves brand attention. On October 31, Taobao Flash Purchase launched "Taobao Convenience Stores". Unlike Meituan's "socialized lightning warehouses + self-operated" path, Taobao adopted an "authorization + standardized warehouse type" approach, replacing self-built warehouses and direct-operated stores to build its supply-side infrastructure for instant retail. Why is this worth attention? Because it signals that instant retail competition is shifting from "traffic battles" to "supply battles" — the key to winning is not "O2O migration of offline stores" but "capability showdown of warehouse-store systems". What does this mean for brands? "Warehouse-stores" become new terminals. Brands must shift from competing on distribution and display to competing on whether SKUs can enter warehouses, how many, and how fast they move! Brands are entering a new "supply war", and lightning warehouses become a new challenge for brands; every brand needs to find its own channel solution.

Problems Faced by Different Brands

Today, almost no brand ignores instant retail, but all brands face difficulties with this channel — more or less.

Roughly, they can be divided into four categories: deep distribution, medium or shallow distribution, and emerging or internet-famous brands. How to distinguish? There's a simple criterion:

Products widely present in mom-and-pop stores and wholesale markets are deep distribution brands;

Those covering only modern chains, like KA and convenience stores, are medium or shallow distribution brands;

Those selling well online or in specific channels are emerging brands. Deep distribution brands' problem: offline distributors are intertwined, price systems are chaotic, and cross-regional selling is rampant. Because these brands have deep channel foundations and wide coverage, but their systems are severely outdated. In the past, market coverage was achieved through multi-tier distribution, but under instant retail, this "tiered supply" has become the biggest burden — weak price control, scattered supply sources, and policies hard to implement precisely. As a result, SKUs go online but are disrupted by cross-regional goods; brand funds may not reach the intended warehouses; unified strategies are hampered by "gray chains" in different channels. Instant retail emphasizes "controllable supply", but deep distribution brands' problem is precisely — supply is uncontrollable and strategies are hard to implement. Medium or shallow distribution brands' problem: they are not as irreplaceable as deep distribution brands. Lightning warehouses don't need many brands in a category. Other channels commonly sell ten brands in a category, but lightning warehouses only need three or four. For example, the toothpaste category might have 30 slots, with several top brands each taking some; medium brands find it harder to get slots because they are not "essential". In instant retail, "non-essential brands" mean: higher slot costs, lower traffic weight, and difficulty forming repeat purchases. If medium brands' problem is "visibility", then emerging/internet-famous brands' problem is "entry". What does that mean? They often originate in e-commerce or content ecosystems, excel at marketing and seeding, but lack offline fulfillment and stable supply systems. Facing the "warehouse-store-centric" instant retail structure, problems emerge: either no warehouse supplies, or SKUs are incompatible, or investment strategies are hard to implement. Many emerging brands are used to "traffic dividends + hit product logic", but instant retail requires stable supply, controllable fulfillment, and sustained sales. For them, instant retail is both a threshold and an opportunity — whoever can first fill the supply capability can rise in the new channel.

Choose "Brand Service Providers" Over "Goods Suppliers"

Different types of brands face different problems, but the core issue to solve is the same: to actively and effectively intervene in supply.

Brands must believe — they have the ability and must intervene in the SKU structure and marketing rhythm of front-end warehouses. Because only if you can intervene can strategies be implemented and you can win in competition. Every brand's situation is different, but the tasks are similar. For example, analyze category attributes — different categories have different competitive landscapes and development trends. For example, formulate channel strategies based on your situation: how to win over warehouse-store systems, seize positions, design docking processes, and rhythmically create buzz so other channels follow. The core here is to have a dedicated instant retail team that plans overall strategy from the perspective of "front-end warehouse/lightning warehouse formats". In my previous article, I said brands without "controllable supply" will miss out on instant retail. To achieve "controllable supply", there's a core lever: Choose "brand service providers" as much as possible, not "goods suppliers". Early lightning warehouses were mainly supplied by local distributors, who focused on "providing rich goods assortments", and can be called goods suppliers. They supply one or a few cities, with limited coverage radius. The limited radius requires them to continuously stack SKU richness to increase volume — that's the past logic. As instant retail develops, a batch of national brand service providers has emerged. So-called "brand service providers" are systematic partners who can manage supply on behalf of brands. Their core capability is not distribution, but making brand strategies online, data-driven, and systematic. Brand service providers are essentially "distributors" for brands in instant retail channels — understanding both algorithms and supply. They shift from "goods logic" to "brand logic" — connecting with brands, serving brands, and using data and fulfillment efficiency as core competitiveness. Why are lightning warehouse systems willing to cooperate with brand service providers? First, scale has risen. A mature brand sells hundreds of thousands monthly, sending tens of thousands of goods to central warehouses at a time, enough to support operations. Second, platforms are increasing efforts to attract brand resources. For example, Meituan's "Brand Connect", more and more brands are flocking in; future coupon and fee investments will become the norm. This is completely different from past O2O investments.

Turn Fee Investments into a Lever for "Controllable Supply"

O2O relied more on offline distributor supply, essentially helping distributors clear inventory. But actual supply sources are complex — offline, KA, e-commerce, and cross-regional goods mixed. That kind of "undifferentiated investment" means brand money flows, but the flow is uncontrollable — that's the biggest problem. What to do in the future? Do differentiated investment, targeting designated lightning warehouse service providers. For example, a beverage brand in Hangzhou partnered with a lightning warehouse service provider, designated warehouses for coupons and time-limited price increases, achieving ROI nearly 2 times higher than undifferentiated investment. Fees are calculable, strategies can be implemented, and ROI can be closed-loop. The meaning of investment changes from "exposure" to "warehouse control". Where and how you invest determines your position in the algorithm. So, key point: coupon and fee investment itself can become a "controllable supply lever" for brands to secure slots. You give me extended slots, I give you more coupons — that's the new game rule. In the past, brand investment fees served industry share; coupon investment was to maintain share leadership. Future investment should have at least one more function: helping brands expand SKUs and drive "sell-in". Today, on Meituan and Ele.me, many brands' covered lightning warehouses may be only a few percent of total stores, but their sales share in instant retail could be 15%, 20%, or even 50%. The reason is simple: lightning warehouse output per unit is far higher than offline store migration. Because instant retail is search logic; warehouse-stores have many SKUs, high search probability, more exposure opportunities, and thus higher traffic. For example. When users search "tissue" on the platform, the ranking is determined by several dimensions: 1) Brand fee investment (paying directly for position); 2) Absolute price (lower price, higher weight); 3) Discount intensity (others at normal price, you reduce to 7 yuan with full reduction, weight increases); 4) Distance; 5) Monthly sales. Brands must pay attention to "monthly sales". For example, when launching new products, use flash sales to first boost monthly sales, ranking naturally rises, and subsequent traffic and conversion can amplify. The premise for strategy implementation is controllable supply. Only when the supply chain is connected, data is transparent, and SKU strategy is controllable can your "sell-out" actions take effect. If you don't sort out the supply side, none of this is possible. In summary: 1. Now and in the future, brands' focus in instant retail should shift from "how many stores to migrate" to "how many warehouses to deploy"; 2. The key action is shifting from "goods suppliers" to "brand service providers"; 3. Only professional "brand service providers" can connect "sell-in" and "sell-out". Final Thoughts Today, almost all brands say they value instant retail. But in reality, they can be divided into two types: One type treats it as "current incremental source", investing fees based on business volume to relieve indicator pressure, but without long-term planning. The other treats it as "future growth engine" — even if monthly sales are only 1 million, they plan for a future scale of 20 million: allocate dedicated teams, coordinate service providers, formulate strategies, and invest resources. The former is a war of attrition; the latter is a systematic war. Instant retail competition is not about traffic but about systems. If you enter, there's no room for others; if others enter, there's no room for you. In other words, instant retail is a revaluation of "supply capability". Whoever can control supply can reshape growth. On November 25-26, in Hangzhou — we have specially organized the "2025 Instant Retail Supply Summit and First Instant Retail Warehouse-Store Product Selection Fair". Friends concerned about instant retail channels, don't miss it! ********🔺