---
title: "The Final Battle of Giants: Instant Retail"
description: "After community group buying, giants have turned their attention to instant retail. Meituan, JD.com, Alibaba, and Pinduoduo are among the players. An industry insider notes that instant retail tests both supply chain and delivery capabilities, with JD.com having supply chain advantages and Meituan excelling in last-mile delivery. The market is expected to reach nearly 900 billion yuan by 2024, but profitability remains a challenge."
author: "何芙蓉"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2022-06-22"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/the-final-battle-of-giants-instant-retail-8aac4b66/"
markdown: "https://xinjignxiao.com/en/articles/the-final-battle-of-giants-instant-retail-8aac4b66.md"
original_source: "https://mp.weixin.qq.com/s/Vpx-Oi-YSi2Cbb2ixhRD7w"
translation: "https://xinjignxiao.com/zh/articles/%E5%B7%A8%E5%A4%B4%E5%B1%80%E7%BB%88%E6%88%98-%E5%8D%B3%E6%97%B6%E9%9B%B6%E5%94%AE-8aac4b66.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/the-final-battle-of-giants-instant-retail-8aac4b66/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# The Final Battle of Giants: Instant Retail

> After community group buying, giants have turned their attention to instant retail. Meituan, JD.com, Alibaba, and Pinduoduo are among the players. An industry insider notes that instant retail tests both supply chain and delivery capabilities, with JD.com having supply chain advantages and Meituan excelling in last-mile delivery. The market is expected to reach nearly 900 billion yuan by 2024, but profitability remains a challenge.

Click to read the original article for details.
After community group buying, the giants' attention has unanimously shifted to instant retail.
Meituan, JD.com, Alibaba, Pinduoduo, and others are in this camp. An e-commerce retail industry insider said that instant retail tests the platform's supply chain and fulfillment delivery capabilities at both ends. JD.com has supply chain advantages, while Meituan has strong last-mile delivery. Based on existing business accumulation, the main players in instant retail are e-commerce and local life service companies.
Instant retail is not a new concept; it can be traced back to 2014 when platforms like Duodian and JD Daojia emerged from online-offline integration, followed by fresh food e-commerce like Miss Fresh and Dingdong Maicai. However, for a long time, the online channel for physical merchants was only a supplementary model, and Dingdong and Miss Fresh fell into losses due to heavy investment in front warehouses.
Around 2018, internet companies like Meituan, JD.com, and Alibaba entered the field, but it remained lukewarm. **It was not until the pandemic in the past two years that the value of instant retail was magnified unprecedentedly, and major companies accelerated their entry, pushing instant retail into deep waters under the leadership of giants.**
**1**
## **Many competitors, JD and Meituan lead**
618 was originally a festival for traditional remote e-commerce, but now participating merchants and delivery scenarios have further broken through the model of long-distance delivery for online merchants. Relying on instant delivery services, offline physical merchants participated in this e-commerce festival, thanks to the platforms' layout of instant retail business.
Due to the pandemic's impact on traditional e-commerce logistics, in the first quarter of this year, most of China was unable to ship goods. However, Meituan Maicai and Shanguo, JD Daojia, and Dingdong Maicai, which are based on instant consumption, played a role in ensuring supply for consumers' daily needs during this period.
In this context, instant retail has been elevated to an unprecedented level by the giants.
In the first quarter earnings reports, companies highlighted their instant retail business results. The 2022 Q1 report showed that JD.com added about 10 million new annual active buyers across the platform, of which 5.6 million came from JD Daojia, making it the main driver of new customer acquisition. According to Dada Group data, JD Daojia achieved revenue of 1.4 billion yuan in the first quarter, a year-on-year increase of 80%; at the same time, JD Daojia and JD Hourly Shopping had over 150,000 stores across all categories online.
JD.com's cooperation with Dada Group began in 2016, but since last year, their cooperation in instant retail has entered a new stage. Before Double 11 last year, JD.com and Dada officially launched the JD Hourly Shopping business, integrating JD.com's internal instant retail resources, with Dada as the actual operator.
In March this year, JD.com made another organizational adjustment, establishing a new Same-City Shopping Business Department, appointing Dada Group Vice President He Huijian as its head, reporting to JD Retail CEO Xin Lijun.
The Same-City Shopping Business Department will integrate the original JD Retail Omnichannel-to-Home Business Department and the Technology and Data Center Omnichannel Ecosystem Department's functions, mainly responsible for expanding and enriching various to-home and to-store business scenarios, including the Same-City Life Business Department and the Same-City Catering Business Department, like a low-profile version of Meituan.
**JD.com integrates the group's e-commerce and physical retail resources, elevating the same-city business to a strategic height.**
In September last year, Meituan held its first "2021 Meituan Shanguo Digital Retail Conference," announcing the launch of the "Billion Brand Growth Plan" for brand owners and the "Hundred Cities, Ten Thousand Stores Action" for chain supermarkets.
Meituan Shanguo belongs to the Home Business Group. Wang Puzhong, Senior Vice President of Meituan and President of the Home Business Group, believed at the time that the internet retail market would shift from "Everything Store" to "Everything Now." "In the next 5 years, the scale of instant retail will grow from the current 200 billion to 1 trillion." As for how much of the pie Meituan Shanguo intends to take, the answer given by Xiao Kun, head of Meituan Shanguo, was 400 billion.
In the first quarter, Meituan's "New Business and Others" revenue was 14.5 billion yuan, a year-on-year increase of 47%, and accounted for 31.3% of total revenue. Among them, Meituan Shanguo's order volume and GTV (Gross Transaction Value) increased by nearly 70% and 80% year-on-year, respectively, and Meituan Maicai's order volume increased by 120% year-on-year. Wang Xing said this time that Meituan Shanguo can better meet consumers' instant consumption needs for "everything to home," and Meituan will continue to take retail businesses including Meituan Shanguo as its main track.
Alibaba's layout in instant retail is scattered across different business lines such as Ele.me, Taoxianda, Tmall Supermarket, and Hema, but all emphasize instant delivery capabilities. Among them, the local life services where Ele.me is located saw revenue growth of 29% year-on-year in the first quarter, making it the fastest-growing segment for Alibaba.
In addition, Pinduoduo recently recruited fruit merchants with 24-hour same-city delivery capabilities, focusing on piloting in Beijing, Shanghai, Guangzhou, and Shenzhen; Douyin also began a self-operated business similar to JD Supermarket—"Dou Super Delivery to Home"—piloting in Guangzhou, Shenzhen, and Hangzhou.
The aforementioned e-commerce retail industry insider said that JD.com and Meituan are currently doing the best, with market share ranking in the top two, followed by Alibaba. This is mainly because JD.com has first-mover advantages in supply chain integration and channels, while Meituan wins with the instant consumption mindset and delivery system cultivated by its food delivery business.
The pandemic has cultivated users' habit of instant consumption. At the same time, as a new consumption model, instant retail is a new growth driver for platforms when old businesses face growth pressure. Meituan and JD.com clearly stated in their first-quarter reports that instant retail is a key focus for 2022. As industry leaders, their competition is inevitable.
Recently, JD.com announced it would enter the food delivery market, also under the "Same-City Business Department." Dada Group supports JD.com's same-city retail delivery, and entering food delivery extends from delivering goods to delivering meals. This is similar to Meituan expanding from delivering meals to delivering everything, both reusing existing core capabilities for more businesses.
As platforms continue to expand in both retail and same-city fields, the overlapping businesses among platforms will increase.
**2**
## **Expanding categories and improving timeliness**
Special consumption scenarios give rise to new business forms. The emergence of community group buying and the small peak in fresh food e-commerce show that the retail industry is always iterating according to changes in consumer demand.
Instant retail is like the further evolution of community group buying and fresh food e-commerce, mainly reflected in **category expansion** and **timeliness improvement**.
Previously, instant delivery was mainly used for categories like food delivery and fresh produce that are urgently needed and difficult to store. The pandemic's obstruction of offline and traditional e-commerce shopping expanded in the first quarter of this year, pushing user demand in instant consumption scenarios to expand from fruits, vegetables, and fresh produce to daily consumer goods, 3C electronics, medicine, and more categories.
The timeliness of logistics delivery often affects consumers' choices; **the more timely the delivery, the better the experience.** Currently, instant retail is still in the stage of cultivating and developing consumer mindset, especially for urban young users, where the demand for instant consumption is inevitable.
The main model of instant retail is the platform model, which integrates offline physical merchants and front warehouses, radiating to surrounding consumer groups based on distance. Its essence is still the **food delivery model**. Therefore, under the influence of users' habitual thinking, platforms like Meituan and Ele.me have a certain advantage in user mindset.
Extending from food delivery to daily consumer goods delivery, merchants and consumers are more mature in choosing food delivery platforms.
Offline supermarkets, convenience stores, and fresh food stores are the focus of instant retail platforms in integrating supply chains and expanding categories. These offline stores indirectly become the front warehouses for the platform's instant retail.
Community group buying failed to turn a profit until the industry stalled, not only due to high subsidies but also because the heavy asset investment model increased costs, with logistics and grid warehouse investments leading to a mismatch between revenue and costs. At the same time, the next-day delivery plus self-pickup model of community group buying basically failed in epidemic areas, so instant retail places more emphasis on instant delivery. Additionally, Dingdong Maicai and Miss Fresh, which self-built front warehouses with heavy assets, also fell into losses and withdrew from cities.
Now, instant retail, through the combination of online and offline, directly avoids the heavy investment risk of fully self-built platforms. At the same time, **in the pandemic environment, the real economy has suffered, and offline merchants are equally eager for online transformation.**
A person inside Yonghui said that Yonghui's e-commerce channel sales in first- and second-tier cities can account for about 20-30%, with online channels mainly including Meituan, Ele.me, JD Daojia, and its own e-commerce app Yonghui Daojia.
"Supermarkets also very much hope to cooperate with food delivery and e-commerce platforms because they have delivery capacity and the platforms have traffic. Even if consumers order on the self-operated platform 'Yonghui Daojia', it is still Meituan and Ele.me's delivery teams."
For the integration of offline stores, JD Daojia currently mainly focuses on large supermarkets. A person who once served as an agent for JD Daojia said that JD Daojia's fulfillment is to some extent constrained by delivery capacity. Dada Group, which undertakes JD.com's instant delivery, has a large proportion of crowdsourced riders, and delivery capacity is not yet stable.
However, if JD.com wants to deeply cultivate instant retail and food delivery, revitalizing Dada Now is an inevitable trend.
JD.com's advantage lies in categories and SKUs. JD Hourly Shopping and JD Daojia integrate offline physical merchants while also being supported by JD Retail's main site and JD's offline entities (JD Convenience Stores, 7Fresh, JD Home Appliances Exclusive Stores) and other supply chain systems.
Meituan Shanguo's platform model is more prominent, but to further supplement SKUs, Meituan launched "Lightning Warehouse" in 2020, encouraging merchants to focus on online store operations.
Instant retail emphasizes supply chain and delivery, and players are still making up for shortcomings.
**3**
## **Industry long-distance race**
Instant retail is still an emerging business in the investment and growth period. Giants like Meituan and JD.com are leading based on their original competitive advantages, but the profitability problem remains unsolved.
JD Daojia has been online for 8 years, and Meituan Shanguo for 4 years, so they are not new businesses from a time perspective.
"New Business and Others," including Meituan Shanguo, remains Meituan's most cash-burning segment, with a net loss of 9 billion yuan in the first quarter of this year; Dada Group, whose main businesses are JD Daojia and Dada Now, had a net loss of 604 million yuan in the first quarter.
The "hourly delivery, fastest minute-level delivery" model tests the platform's capabilities at both ends. The instant consumption model of "what you buy is what you get" is certainly good for improving consumer experience, but platforms also bear higher fulfillment requirements.
**How to improve fulfillment and supply chain capabilities, and how to reduce fulfillment costs, are key factors affecting consumer choice.** At this stage, the cost and speed of instant delivery for FMCG and fresh produce have been significantly optimized, but for more categories like beauty and electronics, due to sparse offline stores, the high delivery costs for long-distance delivery are still discouraging consumers. At the same time, for non-urgent purchases, how to cultivate users' consumption mindset is also a problem platforms may face after the pandemic eases.
Currently, the online penetration rate of retail categories is only 11%, and it is now in an acceleration period. Industry data shows that the scale of China's instant retail market is expected to reach nearly 900 billion yuan by 2024. **The market size is huge, but this is bound to be a long-distance race.**
Source: Photon Planet (ID: TMTweb) Author: He Furong
Good article! Must like, watch, and share.


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671