---
title: "Meituan Flash Warehouse Takes Root in Local Markets: Should Partners Join?"
description: "Last August, Meituan Flash Warehouse partnered with New Distribution to host a study tour in Guangzhou, giving some partners a clear understanding of the flash warehouse business model. Since then, we have received more inquiries from partners about this model. They want to know: how big is the growth potential for Meituan Flash Warehouse? Over the past few years, Meituan Flash Warehouse has grown by leaps and bounds. At the 2024 Meituan Flash Warehouse Ecosystem Conference held in Wuhan in January, data showed that the number of warehouses grew from just over 600 in 2021 to over 6,000 in 2023, with daily orders exceeding 2 million."
author: "周群"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2024-03-18"
language: "en"
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# Meituan Flash Warehouse Takes Root in Local Markets: Should Partners Join?

> Last August, Meituan Flash Warehouse partnered with New Distribution to host a study tour in Guangzhou, giving some partners a clear understanding of the flash warehouse business model. Since then, we have received more inquiries from partners about this model. They want to know: how big is the growth potential for Meituan Flash Warehouse? Over the past few years, Meituan Flash Warehouse has grown by leaps and bounds. At the 2024 Meituan Flash Warehouse Ecosystem Conference held in Wuhan in January, data showed that the number of warehouses grew from just over 600 in 2021 to over 6,000 in 2023, with daily orders exceeding 2 million.

Last August, Meituan Flash Warehouse, together with New Distribution, organized a study tour in Guangzhou, giving some partners a clear understanding of the flash warehouse business model. Subsequently, we received more inquiries from partners about this model.
**Everyone wants to know: how big is the growth potential for Meituan Flash Warehouse?**
**Over the past few years, Meituan Flash Warehouse has grown by leaps and bounds. At the 2024 Meituan Flash Warehouse Ecosystem Conference held in Wuhan in January, data showed that the number of warehouses grew from just over 600 in 2021 to over 6,000 in 2023, with daily orders exceeding 2 million.**
At the conference, Meituan Flash Warehouse announced five major support policies for partner merchants: tapping into lower-tier market dividends, sharing warehousing and distribution infrastructure, product launch support, penetrating key categories, and talent reserve for quality merchants, helping merchants find more incremental space.
As the market continues to grow, how can partners who want to enter seize the opportunity? How exactly is a flash warehouse operated?
In early February, New Distribution visited the heads of two Meituan Flash Warehouse partners: Guo Enbo, head of Shandong Jimu Supermarket, and Jing Jian, head of Youtuan Life Supermarket.
Shandong Jimu started in November 2022, and as of January 2024, it had launched 30 flash warehouses, with a team of over 20 people and annual actual payment transaction volume of 80 million yuan.
Youtuan Life was founded in July 2022, and as of December 2023, it covered 5 provinces and 20 cities nationwide, with 50 stores and an annual operating scale exceeding 90 million yuan.
New Distribution had in-depth exchanges with the heads of the two flash warehouse supermarkets and visited benchmark stores on-site. This article shares the frontline practices and thoughts of Shandong Jimu Supermarket and Youtuan Life Supermarket with you.
******From the two dimensions of growth and profitability**
**Meituan Flash Warehouse is a good business model**
There are usually two criteria for judging the quality of a business model: growth potential and profitability.
**First, look at growth potential.**
In essence, a flash warehouse is a retail form extended from the instant retail industry. On the instant retail platform, it appears as a convenience store, but the difference is that its offline store is not directly open to consumers; it can only be purchased online.
Before talking about Meituan Flash Warehouse, let's look at the development of the instant retail industry. At the 2023 Meituan Instant Retail Industry Conference, Wang Puzhong, Senior Vice President of Meituan and President of the Home Delivery Business Group, shared that the market size of the instant retail industry will reach 1 trillion yuan in the next five years.
In terms of users, the growth rate of instant retail users is quite fast. Data from the 2023 Meituan Instant Retail Industry Conference shows that the compound growth rate from 2019 to 2022 was as high as 47%, especially with a clear trend of young people shifting consumption online.
The online migration of users has brought about the overall rapid growth of instant retail. As an extended format of instant retail, Meituan Flash Warehouse will naturally enjoy this wave of growth dividends.
**Second, look at profitability.**
Data shared by Guangzhou Youkeduo, a Meituan Flash Warehouse merchant from last year's study tour, showed that top stores had a comprehensive gross margin of 45% and a net profit margin of around 20%.
The two flash warehouse supermarket heads we visited this time shared data showing top stores with a comprehensive gross margin of 40% and a net profit margin of around 22%.
Jing Jian, head of Youtuan Life Supermarket, illustrated its profitability with an example: the store nurturing period for a flash warehouse is about 1 month, and basically stable orders are achieved.
It is precisely because of such efficient profitability that Shandong Jimu and Youtuan Life have been able to open stores at such a fast pace.
During the communication with merchants, the author asked a follow-up question: Other platforms also have this front-warehouse model convenience store, so why choose Meituan Flash Warehouse?
Guo Enbo, head of Shandong Jimu Supermarket, thought that the essence of the front-warehouse model is retail delivery, relying on platform traffic. Meituan's advantage in food delivery determines a higher ceiling for scale. In a high-ceiling competition, the ultimate competition is capability; as long as capability is strong, there is greater room for imagination.
Of course, **no matter how good the business model, it still requires the operator's dedicated investment in actual operation.** After talking with the two flash warehouse supermarket heads about current challenges, we also made a simple summary.
First, in the past few years, flash warehouses have grown rapidly, and there are many entrants in some high-tier cities, placing higher demands on store operation capabilities; second, supply chain construction needs further improvement, as flash warehouses have many product requirements.
Overall, whether from the perspective of growth potential or profitability, Meituan Flash Warehouse is a good business model, but it is not easy to do well.
******Survival rules for flash warehouses:**
**Location determines life and death, operation determines success or failure**
Different from purely online or offline businesses, the flash warehouse model combines online and offline. Products are in offline stores, but sales and transactions are online.
For opening a flash warehouse, the core difficulties lie in two parts: one is site selection before opening, and the other is operation after opening.
**1. Location determines life and death: big location brings high traffic, small location brings low cost**
**Like traditional convenience stores, site selection is the most critical step before opening a store. A good location determines traffic supply, which ultimately reflects in order volume.**
For flash warehouses, the first step in site selection is to find a big location, using population heat maps to determine whether there are enough consumer groups.
The second step is to find the place with the most concentrated orders within the big location, narrowing the location to within a one-kilometer radius.
The third step is to find a location within the one-kilometer radius with low rent and low cost. But ensure there is enough space and convenient vehicle access.
The core principle is that the big location must ensure traffic supply and sufficient order volume, while the small location should compress costs to make total costs lower.
Here is a small tip: the name of the warehouse store on the Meituan platform should include the landmark of the business district, such as adding "Wanda Plaza Store" as a suffix if there is a Wanda Plaza nearby. The benefit is that it brings traffic from search and is easier to remember.
**2. Operation determines success or failure: products are key, management is the foundation**
A good location only ensures a large enough traffic pool in the area, but whether it becomes your traffic depends on subsequent operations.
Flash warehouse operations are divided into two parts: product operation and management operation.
**First, look at product operation.**
At the initial stage, the simplest way to create the first product list is to imitate. Compare the products of surrounding flash warehouses and the fast-moving products of convenience stores and supermarkets in the area. Through these market-validated products, output the first product list.
It is recommended not to have too many SKUs at the initial stage of store launch. Wait for one month of sales data to have a clear picture of consumer behavior in the surrounding area, then gradually add products.
In addition, each flash warehouse should have a differentiated advantageous category, usually selected from general merchandise.
On the one hand, it is difficult to compete with competitors on price for standard FMCG products because the market price is too transparent. Only through differentiation in non-standard products can you gather a group of consumers.
On the other hand, it is hard to find the same brands in general merchandise, and consumers are less price-sensitive, which can invisibly increase profits.
This advantageous category should be selected based on the core consumer groups in the coverage area and Meituan search terms. For example, if there are many hotels, focus on disposable items such as disposable underwear and disposable bed sheets.
One point to emphasize: when building a hit advantageous category, make sure to optimize search terms. List all possible keywords that customers might search for.
**Next, look at management operation.**
The core of management operation is the standardization of systems. When store order volume is large enough, without standard management systems, it is difficult to achieve efficient fulfillment.
For example, the product placement system on store shelves: long-tail products inside, best-selling products outside, and only one SKU per brand per shelf, etc.
Another example is the store's picking system, the logic of the moving line, from bottom to top, from low frequency to high frequency, from light goods to heavy goods, etc.
In Shandong Jimu's store, there is a saying: "Strictly follow the standard to pick goods from the storage location, and prohibit picking from memory. Pay timely attention to abnormal products and products with expiration dates, and conduct inventory checks according to the process if quantities are abnormal."
**The role of standardized systems is not only to improve efficiency but also to minimize error rates.**
******Partners doing flash warehouses**
**First find advantages, then make up for shortcomings**
Offline store business is nothing more than immediate purchases and planned purchases. Except for the "on the road" scenario, immediate purchases can be well served by flash warehouses. Planned purchases needless to say, they can be done in one stop.
**Undoubtedly, flash warehouses are a sustainable retail format and will continue to grow for a long time to come.**
As a business model with growth potential and profitability, it is worth entering. Partners can judge based on their own development direction and positioning.
**Partners doing flash warehouses should not only find their own advantages but also make up for their shortcomings.**
The advantages are the standard product supply chain and logistics warehousing system. Their own agency products and familiarity with the trading market give them an advantage in organizing standard products. Their own warehousing and logistics can serve as a central warehouse, improving store efficiency and sales.
**Their shortcomings lie in the construction of non-standard product supply chains and the establishment of operational systems.**
First, for general merchandise procurement, partners need to build from scratch, which takes time to accumulate.
Second, online operation and offline selling to stores are two completely different logics, and partners are not familiar with them. The target groups are different, one is B-end, the other is C-end; marketing methods are also different, with flash warehouses leaning more towards e-commerce play, such as bestsellers and full reductions.
For partners, Meituan Flash Warehouse is definitely a business worth doing, but to do it well, partners need to truly immerse themselves and think deeply.
**Final Thoughts**
Due to space limitations, many practical experiences and wonderful thoughts cannot be detailed one by one.
New Distribution and Meituan Flash Purchase will organize an in-depth study tour in Qingdao, Shandong on March 27, visiting Shandong Jimu Supermarket and Youtuan Life Supermarket, and having in-depth exchanges with the two heads and the Meituan Flash Warehouse team: What are the paths and methods for starting a Meituan Flash Warehouse from 0 to 1? How to do well in the operation and management of Meituan Flash Warehouse? What should partners pay attention to when entering Meituan Flash Warehouse?
**Interested partners, please scan the QR code on the poster to consult and register!**


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