What is a lightning warehouse? A lightning warehouse is an online convenience store or supermarket based on Meituan (or Ele.me). This statement has at least two implications. 1. From the consumer's perspective, the shopping experience and consumption scenario of a lightning warehouse are similar to those of a supermarket or convenience store. What does this mean or what effect does it have? It means that strange, unfamiliar products are not suitable for sale on lightning warehouses, such as new brands or new products. More specifically, products that differ from the past in terms of craftsmanship or ingredients but belong to the same category are not suitable for lightning warehouses, such as camel milk. Camel milk does not sell well in supermarkets or convenience stores, and it is unlikely to sell well on lightning warehouses either. The underlying reason is that consumer demand has merely shifted from offline to online—from going out to staying home—so the products ultimately consumed and the consumer's awareness of them remain unchanged. This means that consumers' perceptions of price, quality, and service are also consistent with those of supermarkets and convenience stores. For example, consumers know the offline price and quality of certain products; they have a mental scale for how much extra they are willing to pay for delivery service. Moreover, this scale is biased toward consumers—even if the extra charge is clearly less than the delivery cost, consumers may already feel resentful. This leads to the role of product structure and operational tactics—how to add costs without attracting consumer attention. 2. From a business nature perspective, lightning warehouses share the same operating model as convenience stores—they tend to be franchise-based. First, we need to understand why supermarkets are generally company-owned while convenience stores are generally franchised. The core reason is that the scale of a single supermarket is large enough, about 100-200 million yuan per year, while a convenience store is small, about 2 million yuan per year. This results in supermarkets having far fewer management units than convenience stores, and far fewer store managers, meaning the difficulty of management and talent supply are not on the same level. The small scale of convenience stores also allows them to adapt to more scenarios; conversely, convenience stores are highly sensitive to their environment, and specific consumption environments require specific operational tactics, making unified headquarters management more difficult. Supermarkets are large enough to be less sensitive to the environment; the complex external environment is offset by the large scale, balancing regional differences—low consumption in one neighborhood and high consumption in another can both be covered by a supermarket, evening out differences. For convenience stores, a store in a low-consumption area needs to minimize costs, offer low-priced products, and improve service. A store in a high-consumption area does not need that; it needs to provide higher quality and higher margins. If the scale of a single store is further reduced, such as a mom-and-pop store (about 1 million yuan per year), the differences become even greater. Currently, the scale of a lightning warehouse is about 6 million yuan per year, higher than a convenience store but still far lower than a supermarket. Therefore, lightning warehouses tend to favor franchising. From the perspective of development speed and competition, franchising is more suitable than company-owned operations—supermarkets and convenience stores matured 10-20 years ago, when there was less competition, greater information asymmetry, and lower requirements for growth speed. Driven by the platform, lightning warehouses must complete in 3-5 years what supermarkets or convenience stores took 10-20 years to achieve. If franchising is an unstoppable mainstream trend, what franchise frameworks exist? One is where Meituan acts as the platform, various entities establish their own brands and operate independently, recruiting franchisees to expand scale, which is currently the common approach. Another is where Meituan acts as a unified brand, and everyone franchises from Meituan, with the platform operating directly or supporting third-party operating companies. The second approach would lead to high homogeneity in operations, conflicting greatly with the regionality and differentiation of retail, thus significantly lowering the ceiling. If the number of third-party operating companies is increased to enhance regionality and differentiation, then the capabilities of operating companies may not match their revenue, leading to reduced operational capability and a lower development ceiling. A more serious issue is: what is the essential difference between increasing the number of third-party operating companies to serve lightning warehouses and supporting operating companies to provide online operations for offline retail entities? Why establish a lightning warehouse project at all? Surely no one really thinks the difference between lightning warehouses and offline retail is just venue, area, product structure, etc.? These differences are only physical differences; the spiritual differences come from the operating capabilities, profit needs, and future aspirations of the entities. If lightning warehouse players are reduced to Meituan franchisees, clearly the best talents will not play with Meituan—after all, creating an online version of 7-Eleven is vastly different from running an online convenience store business. Of course, Meituan as a brand owner supporting third-party operating companies has a possible benefit, but only possible: avoiding multi-level franchising. If Meituan only acts as a platform and other entities create their own brands, it is likely that each brand entity will adopt a franchise model to expand scale. This may be something some people do not want to see, but that is just a personal preference. As argued earlier, franchising is almost inevitable and cannot be prevented. In fact, most offline convenience stores on Meituan Flash Purchasing are multi-level franchises in Meituan's eyes, because the 7-Elevens, Meiyijias, and Furong Xingxings on Meituan are themselves franchisees of their respective brands, and then they join the Meituan platform. That is, the structure is Meituan (platform) - operating entity (franchisee/store) - brand owner (store headquarters/brand owner), which is the same as the lightning warehouse franchise model. I guess Meituan has analogized the management model of lightning warehouses to e-commerce flagship stores, i.e., Flash Purchasing players are like non-flagship stores on Taobao/Tmall, while lightning warehouse players are like flagship stores or official brand stores on Taobao/Tmall. Flagship stores or official brand stores are not allowed to bypass the platform to continue recruiting franchisees. This thinking is completely wrong, because the essence of instant retail is retail, and the essence of lightning warehouses is supermarkets and convenience stores, not e-commerce and e-commerce sellers. Of course, the above are my personal guesses; the actual model depends on business development needs and is the result of multi-party games. The Three Links and Three Stages of Lightning Warehouses The three links are operations, franchising, and supply chain, corresponding to the three stages: operations first, scale second, and supply chain final. Lightning warehouse operations refer to activity operations and product operations, without user operations, because Meituan's backend system does not yet support user operations well. Activity operations include full reductions, shipping fee deductions, coupon usage, discounts, etc. Product operations include product selection, product planning, pricing, etc. Franchising means finding franchisees; if it is company-owned, it refers to capital and personnel supply. Supply chain refers to procurement advantages; if it is franchise-based, it refers to supply chain companies; if it is company-owned, it refers to the construction of central warehouses and city warehouses. Operations are crucial, even the only thing for lightning warehouse players. How to understand this? Please see the figure below. Open Meituan's Supermarket & Convenience channel; stores with monthly sales exceeding 10,000 orders are likely brands you have never heard of—those are lightning warehouses. Brands you know, such as China Resources Vanguard, Jingkelong Supermarket, Meiyijia, and Lawson, typically have monthly sales of only a few thousand orders. Why is that? Are offline players like China Resources Vanguard, Meiyijia, and Lawson, with over a decade of experience, less knowledgeable about retail than a lightning warehouse established just a year ago? Don't they have more supply chain advantages? No, it is simply that lightning warehouses have better operations. Therefore, operations are crucial, even the only thing. This advantage can be maintained until around 2024, after which it is hard to say. Why this time point? Because the essence of operations is cognition, experience, and information asymmetry. These things will inevitably spread over the years, reducing operational capability gaps and intensifying competition, thereby significantly weakening the advantage brought by operations. Once the operational advantage is weakened, what advantage can fill the gap? Scale advantage. At this stage, scale advantage does not yet refer to procurement advantage, but rather the tolerance for competitive losses under larger transaction scales, more warehouses, more scenarios, and more regions. If the scale is small, a single attack can bring it down; if the scale is large, the risk resistance is much stronger. It is like gambling: with more capital, losing a few hands in a row does not hurt. Another explanation for scale advantage is the amortization of operational costs and the strengthening of operational capabilities. Anyone who has run a lightning warehouse knows that operations are very heavy and labor costs are high. Without sufficient scale, you cannot afford operations. Only with sufficient scale can you afford it and gradually strengthen it. After that, supply chain advantages come in, i.e., procurement advantages—the other side of scale advantage. This is also the endgame of retail; supermarkets, convenience stores, and mom-and-pop stores all end up this way. Why do retail people fail at Meituan Flash Purchasing or lightning warehouse operations? Can Meituan food delivery operators do well in Meituan Flash Purchasing or lightning warehouse operations? Can people good at e-commerce or private domain operations do well in Meituan Flash Purchasing or lightning warehouse operations? What exactly is the operation of Meituan Flash Purchasing or lightning warehouses, and how should it be done? What exactly does the supply chain of lightning warehouses refer to, and how does it differ from other formats? To what extent can it be achieved? How should it be done? What should be done at this stage? Some are exploring private domain play for lightning warehouses, some are exploring warehouse-store play, and some are exploring large warehouse play. What do these mean? Why do this, or why not? To know what happens next, listen to the next breakdown.