Recently, we visited several distributors and discussed many industry changes. During our exchanges, one clear impression emerged: distributors are no longer thinking purely in offline terms; many are now developing their trading businesses in a three-dimensional online-offline manner. In addition to focusing on store retail, distributors are also paying attention to local instant retail, especially the Meituan Flash Delivery Warehouse (hereinafter "Flash Warehouse") format. Many distributors are asking New Distribution whether they can participate in Flash Warehouses as a localized instant retail business. Behind this interest lies the rapid growth of Flash Warehouses over the past two years. According to public data, Meituan Flash Warehouses grew from just over 600 warehouses in 2021 to over 6,000 in 2023, nearly a tenfold increase. With this exponential growth, Meituan Flash Warehouses are also accelerating their supply chain layout. For distributors, is there an opportunity to enter the Flash Warehouse space? How should they enter? In an Uncertain Market Environment Flash Warehouses Offer Certain Growth In our exchanges with distributors, we sensed a state of anxiety: their businesses are not only failing to grow but are also continuously declining. When discussing their Q1 performance this year, feedback was generally poor, with most seeing declines compared to the same period last year. On one hand, consumers are becoming more conservative in daily spending, focusing more on value for money. During frontline research, New Distribution found that consumers are more price-sensitive, and only promotional items sell well. On the other hand, channels are becoming more fragmented, with consumers' purchasing paths no longer limited to traditional retail channels but spread across various online and offline channels. In the past, distributors could achieve good sales by focusing on a single channel, but today, they must cover more channels, especially those with growth, to keep their businesses healthy. This is why distributors are paying attention to Flash Warehouses: since its official launch in 2021, Flash Warehouses have maintained steady growth, achieving nearly a tenfold increase in store count within just two years. The Rapid Growth of Flash Warehouses Next, we will analyze the value of distributors partnering with the official Flash Warehouse platform to supply goods to Flash Warehouse merchants. Flash Warehouses have achieved scale effects in front-end store numbers and business volume, making supply chain construction a current priority. An efficient supply chain requires localized product supply, which is precisely where distributors have an advantage. For distributors, partnering with the official Flash Warehouse platform to build local supply chains offers both explicit and implicit value. The explicit value is new channels and new business growth. Instant retail and Flash Warehouse businesses are still growing rapidly, and partnering with the Flash Warehouse platform can help distributors achieve more efficient product turnover. Moreover, Flash Warehouses offer a wider variety of products, with internet-famous items and new products performing well, helping distributors sell more profitable goods. The implicit value is even greater. From a product perspective, the platform's consumer insights can provide distributors with more precise product selection guidance. In the past, distributors relied on experience, which often led to imprecise selection due to a lack of digital information. Meituan Flash Warehouses excel in providing timely, accurate, and rich information, helping distributors seize the right products at the right time to maximize sales. From a brand perspective, it can help distributors strengthen cooperation with brands. On one hand, partnering with the official Flash Warehouse platform helps distributors expand business channels for existing brand partners, increasing overall business volume with them; on the other hand, through the platform, distributors can access more brand resources. The stronger a distributor's channel coverage, the greater their bargaining power. Previously, distributors could only operate offline channels; now, by partnering with the Flash Warehouse platform for supply, they can achieve full-channel business expansion locally, both online and offline. This capability is rare, and brands will place more importance on such distributors. From an operational perspective, partnering with the official Flash Warehouse platform for supply broadens sales channels, enriches product categories, and improves selection accuracy, ultimately boosting both sales and profits. These benefits are already evident in cooperating distributors. For example, a food trading company in Changsha, after understanding the Flash Warehouse model, quickly joined the Meituan Flash Warehouse supply chain cooperation in January 2024. Guided by big-data-based product selection, they continuously expanded product variety and improved delivery capabilities by directly supplying Flash Warehouses. Since the cooperation began, the company has increased its SKU count from over 100 to over 500, improved gross margin by 5%, and grown its Flash Warehouse business volume sixfold, gradually establishing deep cooperation with leading local Flash Warehouses. Building Supply Chains Together What Support Can Flash Warehouses Provide to Distributors? As the Flash Warehouse business develops, the number of covered cities increases, and the types of warehouse store partners become more diverse. Many Flash Warehouse merchants lack supply chain resources, and the platform needs to help them solve product supply issues. Meanwhile, distributors, facing a challenging macro environment, need to engage in more valuable channels to strengthen themselves and maintain a foothold locally. The convergence of these needs presents a new channel opportunity for distributors. Of course, for distributors participating in supply chain construction, the official Flash Warehouse will provide corresponding support and empowerment, including consumer insights, precise product selection, brand resource matching, product pricing, industry trend analysis, and professional personnel support. Due to space limitations, we won't elaborate here. Regarding Flash Warehouse supply chain cooperation, New Distribution, together with Meituan Instashopping, will organize an in-depth Flash Warehouse offline seminar on May 30 in Shenzhen, Guangdong. At the event, the regional procurement and sales manager of Meituan Flash Warehouses will provide an in-depth explanation of the Flash Warehouse supply chain system and cooperation empowerment model. Distributors interested in partnering with the official Meituan Flash Warehouse platform to supply goods and jointly build a high-turnover product portfolio are invited to scan the QR code in the image to inquire and register for the seminar. Recommended Reading