If the cost of 30-minute delivery drops below 3 yuan per order, express delivery will become the mainstream shopping method; if express delivery shopping becomes mainstream, the retail industry will be reshaped. Photography: Baobao Text | Zhang Chenyong Recently, Hema has become a new retail sensation, praised by the industry as a "new retail benchmark." Obviously, 30-minute express delivery is one of its key features. Hema Fresh's first store, Shanghai Jinqiao store, opened in early 2016, and the Hema app was launched simultaneously. Now, there are 13 stores in Shanghai, Beijing, and Ningbo. The store offers a "browse and eat" experience, with "30-minute delivery" within a 3-kilometer radius. Behind this is a data-driven new model and a reconstruction of the traditional retail supply chain. 30-minute express delivery has become the leading industry standard. Interestingly, JD.com, which currently offers "2-hour express delivery," announced on August 11 that it would launch a 30-minute "precision delivery" service covering seven cities including Beijing—this does not mean delivery within 30 minutes, but rather that consumers can choose a delivery time slot within a 30-minute window (for example, choosing between 9:00-9:30 the next morning). With the maturity of technology and the expansion of scale, the cost of rapid delivery will be greatly reduced. When 30-minute delivery becomes the norm, what changes will occur in the retail industry? The Era of Express Delivery Has Arrived So-called express delivery means delivery within 10-30 minutes after the customer places an order. Currently, some orders from Hema Fresh, Ele.me, Meituan Waimai, and Baidu Waimai can already achieve this delivery speed. The total daily orders of the above platforms exceed 10 million, but their market share in overall retail is still very small. Currently, the cost per express delivery order is 8-12 yuan, including station and management overhead. Overall, express delivery orders are mainly fast food, and their prices are slightly higher than dining in-store. Moreover, on multiple delivery platforms, the delivery fee per order is lower than the cost. For example, in the Wener Road area of Hangzhou, Ele.me typically charges 4-8 yuan per delivery, while Meituan typically charges 3-6 yuan per delivery. In other words, some delivery platforms are still relying on subsidies to drive traffic. The maturity and popularization of new technologies, including machine delivery replacing or assisting some manual delivery, and the increase in order density, may reduce the cost of express delivery from 8-12 yuan to 1-3 yuan, making express delivery shopping within 30 minutes entirely possible to become mainstream. For consumers, choosing express delivery will be more cost-effective and convenient than shopping in-store. Then, fast food, convenience stores, supermarkets, e-commerce, and some specialty stores will be reshaped, and the retail industry will undergo earth-shaking changes. Convenience stores, hypermarkets, and e-commerce platforms are all current mainstream retail formats, but they are not perfect. Hypermarkets are not convenient enough, convenience stores lack variety and value, and e-commerce platforms are slow (relative to express delivery). The next-generation mainstream retail format should combine convenience, variety, and value (efficiency): more convenient than convenience stores, more varied than hypermarkets, and faster with lower minimum orders than e-commerce platforms. Some orders on Ele.me can achieve 30-minute delivery. The photo shows a female Ele.me rider in Hangzhou. Source: Ele.me WeChat public account If such a retail format takes shape, consumers will choose express delivery shopping in many cases. Then, express delivery will become the mainstream shopping method, and its categories can expand from fast food to all products that do not require on-site experience. The order volume can increase from the current 10 million orders per day to 100 million, or even 1 billion orders. At the Global Smart Logistics Summit in May this year, Alibaba Group Chairman Jack Ma said that 1 billion packages a day will be achieved in no more than eight years, and it is estimated that it will be achieved in about six or seven years. If express delivery shopping becomes mainstream, the time for 1 billion orders or packages per day may come sooner. If Express Delivery Shopping Becomes Mainstream Here, we define "express delivery" as delivery within 10-30 minutes after the customer places an order. Currently, some orders from Hema Fresh, Ele.me, Meituan Waimai, and Baidu Waimai can already achieve this delivery speed. If express delivery shopping becomes mainstream, the retail industry will be reshaped, and comprehensive express delivery platforms will gain huge business opportunities. Photography: Baobao A comprehensive express delivery platform is not about adding express delivery services to the current format, but about reshaping the retail ecosystem. It can be composed of three parts: stores, resident merchants, and e-commerce platforms. The first component of the "comprehensive express delivery platform" is the store. Stores under this format are different from traditional stores; they will be redesigned according to express delivery needs, including product structure, systems, layout, hardware and software, and organizational structure. The author once led a hypermarket delivery project. Under the traditional store model, the picking time per order was far more than 10 minutes, and the error rate caused by inaccurate inventory and picking was over 20%, greatly affecting customer experience. However, with the support of advanced technologies such as the intelligent Internet of Things, Hema Fresh has achieved picking time of less than 10 minutes, and the store supports both online and offline shopping scenarios, which is well-suited for the express delivery model. Consumers have offline experience needs, and offline stores can meet such needs. Therefore, online services will not divert traffic from offline; instead, they will promote each other, keeping customers in a closed loop of online and offline. The cost of express delivery services is determined by order density, which is related to the ability to attract traffic and consumer awareness. Physical stores are clearly superior to warehouses in both aspects. In addition, it is difficult to find suitable warehouses in cities, while supermarkets in shopping malls, considering their stronger ability to attract traffic than warehouses, have cost-effective rents. For example, supermarket rents in Shanghai can be around 2.5 yuan per square meter per day, even lower than ordinary residential rents. The second component of the comprehensive express delivery platform is resident merchants, referring to merchants around the store. They join the app, just like restaurants join Ele.me. Express delivery services are provided uniformly, and the product categories are enriched to meet users' multi-level consumption needs. Fast food, convenience stores, supermarkets, and fresh produce are categories with high shopping frequency. If they are integrated together, lowering the shopping threshold, and delivering within 30 minutes, the app used for ordering can become a high-frequency application. On this basis, services such as half-day delivery under the B2C model can also be launched. This is the third component of the comprehensive express delivery platform: the "e-commerce platform." In summary, a comprehensive express delivery platform will be more varied than convenience stores, more convenient than supermarkets, and faster than current e-commerce platforms. It may represent the future direction of retail development, with huge market space, and deserves the attention and consideration of retail colleagues. -END-