Author | Dong Erqian

Editor | Yang Xuran

On the day of the launch of the iPhone 16 series, Ms. Wang from Chengdu ordered a mobile phone takeaway. She received her new phone in less than 15 minutes after placing the order. "On September 13th, I and my friends tried to grab one on many platforms, but only I managed to get a spot-on delivery through Ele.me that day. Those who were slow had to wait until October," she said.

It has been two years since the Ministry of Commerce first explicitly proposed the concept of "instant retail" and over a year since instant retail was written into the "Central Document No. 1".

During this time, giants such as Alibaba, Meituan, JD.com, and SF Express have accelerated their layouts in this sector. According to iResearch's report, the scale of the instant delivery industry is expected to double in the next five years, from approximately RMB 341 billion in 2023 to over RMB 810 billion in 2028, making it a rare bright spot with consistent double-digit annual growth.

With the recognition of the government and the participation of enterprises, this emerging industry is being accepted by more and more consumers. While traditional online commodity supply is abundant, the waiting time for delivery is uncertain, and offline shopping involves time-consuming processes like traveling back and forth. Instant retail addresses these issues, representing a more certain lifestyle.

The giants share this view. In March of this year, Ele.me held its annual management team meeting, the "Hundred People Group Meeting." At the meeting, the newly appointed Chairman Wu Zeming stated that one of the key consensuses reached within Alibaba is that consumer spending habits are increasingly trending towards instant home delivery.

Han Liu, CEO of Ele.me

Based on this understanding, at the recent 2024 Instant E-commerce Future Business Summit, Han Liu, CEO of Ele.me, stated that in the next three years, Ele.me will adhere to its long-term "1+2" strategy and make strategic investments in merchants. The "1" represents Ele.me's commitment to being a home dining platform that grows healthily and understands consumers better, while the "2" represents its focus on building two new tracks: "instant retail with Ele.me characteristics" and "instant logistics networks extending market value."

"Facing the rapid development trend of instant e-commerce, all ecological participants should strive to create more innovative and collaborative business models to provide better services to society. As a platform, we also have the responsibility to create a more eco-friendly business environment," said Han Liu.

01

New Trends

More certain channels.

As early as 2018, Liu Qiangdong mentioned in an interview, "Chinese consumers have strict requirements for delivery timelines. Four years ago, I bought something on Amazon, and they offered two-day delivery. This two-day express service is a disaster for Chinese consumers because everyone wants to receive their packages within six hours, not two days.""Liu Qiangdong's perception of "consumers' demands for timeliness" is essentially a pursuit of certainty, as reflected in some social media comments:

Whenever I want a drink at home, I choose an instant retail platform. Not only do I not have to go out, but I also have the certainty of delivery within 30 minutes, satisfying even spur-of-the-moment desires;

Even if you want to buy a data cable, an instant retail platform can deliver it in about half an hour;

No matter what you forget to bring on a trip, you can almost always buy it through instant retail upon arrival.

The underlying logic behind the rapid growth of the instant retail industry lies in this: when infrastructure is sufficiently developed, consumers tend to choose more certain channels."Currently, the instant retail sector exhibits a two-superpower, multi-strong player landscape, with Meituan and Ele.me firmly occupying the first tier based on their instant delivery networks built on food delivery services. A simple statistic proves this: both Meituan and Ele.me have millions of active riders, a competitive barrier that latecomers find difficult to overcome."As seen from the latest press conference, Ele.me is vigorously strengthening its instant retail business and aims to create a more innovative business model to accommodate the shift in user behavior towards instant retail. The "1+2" strategy is a detailed breakdown of this goal."Like Meituan, food delivery is also the foundation of Ele.me's instant delivery network. Therefore, Ele.me's primary goal for the next three years is to become an instant dining platform that understands consumers better, which is necessary to stabilize its foundation."According to Lei Yanqun, President of Ele.me's Merchant Ecosystem, the platform will use data from its intelligent CRM system to help merchants accelerate membership system construction, improve consumer operations and management, and apply intelligence. Ele.me has launched the "Pentium Plan," investing RMB 1.5 billion in special funds to enhance the intelligence of catering brands and drive business growth."After consolidating its foundation, Ele.me is vigorously promoting instant retail. Hu Qiugen, Senior Vice President of Ele.me and Head of Urban Retail Business, explained Ele.me's approach to instant retail with Ele.me characteristics: "Ele.me strategically invests in instant retail, firmly pursues win-win cooperation with the ecosystem, and resolutely refrains from competing with merchants over supply chains; it leverages the complementary resources of Taobao, Alipay, and Gaode Maps to break through time and space constraints in instant retail, better serve consumers, and forge a new paradigm for 'time-space' scenario management.""

Hu Qiugen, Senior Vice President of Ele.me, introduces Ele.me's instant retail development strategy

In simple terms, the core of this statement lies in two key concepts: open platform and ecosystem building. These two words outline Ele.me's core solutions to future market competition.

02

Open Platform

The open platform model is closer to the value core of the instant retail model."Unlike other platforms that experiment with self-operation models, Ele.me adheres to an open platform model, as emphasized by Han Liu: "Under the new business trend, co-creating brands in the new D2C frontier of instant e-commerce.""Connecting consumers on one end and brand merchants on the other is inherent to the platform's purpose.""Essentially, the open platform model is closer to the value core of the instant retail model. On the supply side, the platform model connects more brand owners and retailers, offering a diverse range of categories and brands and forming a nationwide supply-demand network. On the demand side, the platform model covers a wide range of customer groups, scenarios, and needs."There is undoubtedly a demand for greater certainty among consumers. "The importance of instant retail as a bridge between online and offline channels is becoming increasingly evident. We see that based on diverse scenarios, categories such as ready-to-drink coffee and toner have significantly outperformed modern channels in terms of sales through instant retail channels," shared Yang Ying, Vice President of E-commerce and Omnichannel Business at NielsenIQ."However, to better meet consumer needs, the most critical prerequisite is for the platform to build a comprehensive infrastructure that coordinates stores, warehousing, logistics, and after-sales services."To this end, Han Liu officially launched the Near-Field Brand Official Flagship Store Program at the press conference, targeting merchant sales growth. He revealed plans to open 100,000 official flagship stores within the next three years.According to media reports, this project underwent two years of internal exploration before finally being launched to the market. Its goal is clear: to vigorously develop the supporting infrastructure for instant retail."In the view of Chen Yanfeng, Vice President of Ele.me and Head of Retail Brands and Supermarket Convenience Industry, many brands without physical stores in the past lacked direct communication channels with consumers, making it difficult for them to understand consumer needs and accurately identify target audiences. Official flagship stores simplify direct service and circulation channels for brands, improve channel profitability, and bring sustainable growth."

Chen Yanfeng, Vice President of Ele.me, introduces instant retail strategy

The first pioneers have already received positive feedback. As early as June 2023, Mengniu Dairy's Daily Fresh brand became one of the first to launch its official flagship store on Ele.me.""Up to now, it has brought us significant benefits," revealed Chen Jiangchun, Sales General Manager of Daily Fresh. "Since the brand and Ele.me launched a major product incubation cooperation project in April this year, the sales proportion of new products has exceeded 25% at once.""In Chen Jiangchun's view, the brand realizes autonomous distribution coverage for near-field retail through the social supply chain embodied by official flagship stores. At the same time, the brand can build a private domain operation position, truly retain users, and control pricing power to achieve long-term price stability as the main operator of the store.

03

Service Ecosystem

"As a platform, Ele.me will invest more.""Ele.me has another notable advantage: synergy with Alibaba's various businesses and Alipay. By collaborating with Taobao, Alipay, Gaode Maps, and other platforms, Ele.me can break through time and space fulfillment constraints in instant retail and better serve consumers. For example, leveraging the synergy with Alibaba's various businesses and Alipay, brands can open multiple stores across platforms and attract more user traffic."However, the imagination of the ecosystem extends beyond the Alibaba system. More importantly, it is about creating a positive cycle between merchants and consumers. According to Hu Qiugen, "In the entire business chain, there are things that can improve efficiency but that merchants cannot accomplish alone. As a platform, Ele.me will invest more, such as providing tools, operational methods, and traffic operation systems.""Recently, Ele.me and Nielsen jointly released the "OAIPL Instant Retail New Growth Methodology and Application" report, which introduces the OAIPL model, a scenario-based audience asset operation model. This model presents the deepening relationship between consumers and brands at each stage, identifies the scale of the audience that the brand can reach, and depicts a hierarchical stratification of audiences ranging from "untouched (opportunity) → aware (awareness) → interested (interest) → purchased (purchase) → loyal (loyalty)."This new model aims to help brands establish mental connections with previously untouched potential users; expand the user pool in core and incremental scenarios through scenario insights, combining dimensions such as time, space, and category, to achieve effective audience asset precipitation; and provide broader traffic operations covering both on- and off-platform, as well as intelligent tagging and selection mechanisms, to effectively enhance the activity and purchase frequency of core users."According to the report, based on various permutations and combinations of consumer space, time, user behavior, and other factors, scenarios can be infinite. Ele.me provides five basic core scenarios to effectively cover users' diverse needs and life scenarios, helping brands precisely reach different consumption nodes."For example, in the gift-giving scenario, to solve consumers' dilemma when choosing gifts, Ele.me concentrated multiple software functions such as "anniversary reminders + content e-commerce + AI assistants" into the "Flowers and Gifts" channel ahead of the Double Seventh Festival this year. Consumers can one-stop customize their own anniversary reminders within the channel page, filter and place orders based on the preferences of the gift recipient, and even use AI to customize greeting cards and send them directly. For brand merchants, this upgraded service scenario also provides new channels for cross-border cooperation, user operations, and frequency increases."

Ele.me's flowers and gifts display interface

This summer, Ele.me also focused on the "eating ice" scenario, helping brands identify scenario opportunities and target audiences. Through crossovers, marketing, and other means, brand operations rediscovered opportunities for audience and business growth from the dimensions of people, regions, channels, and products. Taking Ele.me's June data as an example, the volume of takeaway orders for "alcohol + ice + beverages" increased by 211% year-on-year, significantly outpacing the growth of alcohol orders alone, while the volume of "beverages + ice" takeaway combinations also increased by 142% year-on-year.""Brand owners, offline supermarkets and hypermarkets, and instant retail platform Ele.me have created various new marketing cooperation models to drive business growth. On the one hand, they innovate on instant retail platforms to improve conversion rates; on the other hand, they break through barriers and collaborate across borders to expand the ecosystem's boundaries, using multiple strategies to activate the summer economy," said Yang Ying.

04

Closing Remarks

Under the narrative logic of business, Ele.me's press conference also carried a hidden narrative: how instant retail can better serve society, including platform sellers, consumers, and more stakeholders who may appear in the entire link."This narrative does not emphasize how much money the company can make but rather the importance of its position."Through better and more complete infrastructure construction, Ele.me is actively embracing the issues faced by the development of instant retail, such as platforms and merchants, users and platforms, fairness and efficiency. For companies aiming for long-term success, this focus is crucial.