The retail sector has always been abuzz with excitement.

From last year to the present, e-commerce giants have been locked in a fierce battle for retail supremacy.

JD.com, Meituan, and Taobao are all enhancing their "one-hour delivery" services. JD.com is venturing into the food delivery market, Meituan is intensifying its focus on instant retail, and Ele.me is closely collaborating with Douyin.

Behind these frequent moves lies a relentless escalation of instant retail strategies.

The battles among giants in instant retail are essentially a continuation of an "infinite game." Seeking incremental growth is a natural instinct for these titans. In this process, the boundaries of these giants are constantly being redefined, gradually achieving a new equilibrium.

Why Instant Retail?

To answer this question, we must delve into the fundamental essence of retail.

Instant Retail: The Latest Evolution of People, Goods, and Venues

The three cornerstone elements of retail are: "people, goods, and venues."

JD.com, Taobao, Meituan, and Douyin engage in e-commerce by rearranging these three elements.

JD.com and Taobao control the goods, with the core being the flow of merchandise, thus excelling in supply. Meituan has a grip on venues and transaction scenarios, enabling it to continuously cross boundaries and engage in endless competition. Douyin has mastery over people and attention. It is widely believed that Douyin excels in traffic acquisition costs and monetizes through e-commerce ventures.

Today's retail landscape is characterized by oversupply, and platforms do not lack goods. Content supply is also abundant, and there is no shortage of traffic.

So what do platforms lack?

The author contends it is transaction scenarios.

E-commerce platform GMV = Traffic × Average Transaction Value × Conversion Rate × Purchase Frequency. In such a competitive market, traffic costs are gradually stabilizing, and it is challenging to increase average transaction values. With the conversion rate nearing its peak, only transaction frequency can be improved.

For instance, convenience stores now offer delivery services. The logic is similar to that of giants engaging in instant retail. Within a confined area, more purchase frequencies can be achieved or generated.

This example underscores that, in addition to providing users with sufficient, precise, and diverse SKUs, mining scenarios is another avenue to boost transaction frequency.

In fact, today's e-commerce platform algorithms are already highly precise, and SKUs are abundant. Only by mining more transaction scenarios can fulfillment frequency be augmented, thereby enhancing overall GMV.

Therefore, for leading giants, discovering scenarios equates to finding incremental growth.

Instant retail is a scenario naturally aligned with e-commerce giants. The transportation capacity and computing power accumulated over the years can be immediately utilized in instant retail.

Moreover, it represents an incremental scenario.

According to Meituan's financial report, the peak daily order volume for instant delivery reached 98 million on the day of the Beginning of Autumn last year. JD.com's 7FRESH has witnessed even more substantial growth recently. During the Qingming holiday period, 7FRESH's online orders surged by nearly 100% year-on-year.

Let's examine the broader picture of instant retail.

According to data from the Ministry of Commerce's Academy of International Trade and Economic Cooperation, the market size of instant retail was 650 billion yuan in 2023 and is projected to exceed 2 trillion yuan by 2030.

What does 2 trillion yuan signify?

Douyin E-commerce's GMV in 2024 is anticipated to reach approximately 3.43 trillion yuan, roughly half the size of China's entire e-commerce market. On the e-commerce stage, whoever captures half of this market will be poised to redefine the entire e-commerce industry landscape.

How to mine scenario increments in instant retail?

The crux lies in one word: "Speed."

In the retail industry, speed represents a form of advancement.

Literally, speed is a manifestation of high efficiency. Today's e-commerce industry boasts highly developed supply infrastructure. At this juncture, competition is not merely about who has superior goods but who can complete the cycle of reach, conversion, and delivery first.

Therefore, the first step is to establish a faster delivery system.

In the retail industry, speed in a physical sense refers to rapid delivery.

Taking JD.com's 7FRESH as an example, online orders during the Qingming holiday doubled directly. Why did 7FRESH grow so rapidly? One reason is its system of one central store plus N satellite stores. Essentially, this is a front-end warehouse optimized for swifter response and enhanced delivery efficiency.

Logistics and delivery are JD.com's most proficient domains.

From the user's perspective, users are unconcerned about the system; they are only interested in whether the beef, barbecue grill, and spices they ordered can be promptly delivered to the campsite. With faster logistics and delivery, there is naturally a higher fulfillment capacity.

Similarly, why did Alibaba invest heavily in Cainiao in the past? A pivotal reason was recognizing the essence of "speed."

What is speed? It is the advancement of e-commerce infrastructure and is intrinsically linked to overall GMV.

During the battle between Taobao and JD.com, after several rounds, JD.com remained as steadfast as Mount Tai, relying on its core logistics prowess. Later, Alibaba leveraged Cainiao as a digital foundation, integrated STO Express, YTO Express, ZTO Express, and Yunda Express, and acquired such capability. According to Tianyancha APP, Cainiao was valued at nearly 200 billion yuan by 2019.

In the retail industry, "speed" is a capability that only giants can attain.

Consider, which players in the instant retail industry today can wield significant influence without being giants?

"Speed" in retail encompasses not just physical speed but also digital speed.

Many argue that Meituan's current success is attributed to group-buying as its core habit, through which Meituan has established a traffic ecosystem. Thus, as a service entry point, Meituan can undertake numerous monetization ventures, ranging from commodity services to travel and taxi services, encompassing almost everything.

Traffic is one aspect, but to satisfy such a vast user base, not only an ecosystem is required but also "speed" in a digital sense.

I once conversed with a technical friend about whether driverless taxis could completely disrupt taxi platforms. He firmly stated no, because the research and development threshold for Didi's real-time thermal scheduling algorithm is exceedingly high, which other companies cannot replicate.

The reason Meituan can offer taxi services is that instant delivery also necessitates the same fundamental capabilities.

With this capability, the platform can naturally respond swiftly to user needs. This is akin to deploying a rapid response force on the front lines that can discern and fulfill needs and complete the transaction cycle promptly.

It is undeniable that whoever can capture users' attention faster and complete the cycle of transactions and repurchases may seize the largest victory fruit and thereby reshape the e-commerce landscape.

A Game for Giants Only

Competition among giants in the field of instant retail is inevitable. Firstly, it aligns with natural laws and is achievable. Secondly, it is the law of the jungle, and it needs to be addressed.

The battle in the instant retail industry is a continuation of commercial Darwinism.

In the business realm, strength prevails, and the fittest survive. Whatever users demand, as long as the cost can be balanced, someone will naturally fulfill it.

To put it bluntly, it is time for evolution. The key lies in whether one can evolve the fastest to adapt to market needs.

Instant retail comprises three core elements: instant demand, local supply, and instant fulfillment. Only giants can achieve these three elements.

Taking JD.com's 7FRESH as an example, with its robust infrastructure for traffic, supply, and logistics capabilities that can be digitized, instant retail becomes feasible.

In this process, the platform relies on JD.com's data technology and algorithm technology accumulated from its past e-commerce experience to complete supply and demand matching. The supply chain system handles warehousing and supply, and the physical delivery team fulfills the orders. These elements are indispensable.

For e-commerce giants, this is an inevitable evolution node and a vast world with immense potential.

Simultaneously, it is also a necessary catalyst for enhancing valuation in the capital market.

For traditional e-commerce and retail giants, online penetration and infrastructure construction have largely reached their peaks after more than a decade of development. At this juncture, going overseas or discovering endogenous incremental growth becomes a pivotal issue.

Instant retail has emerged as a vast ocean of opportunities for them, without the fear of stagnation.

We mentioned earlier that this market is substantial enough. The remaining question is whether it is profitable enough.

First, let's consider a foreign player. Walmart's Sam's Club has made its online business a significant source of performance through its front-end warehouse operations, accounting for nearly 50% of total sales.

During a conference call announcing the results for the third fiscal quarter of Walmart's 2025 fiscal year last year, executives attributed this to the network of over 350 Sam's Club distribution points (front-end warehouses), which provide one-hour delivery services to members and expand the reach of traditional Sam's Club stores.

Dingdong Maicai, based in Shanghai, recorded a net operating cash inflow of 930 million yuan in 2024, reaching an all-time high. Notably, Dingdong Maicai also achieved profitability for the full year under GAAP standards for the first time.

Similarly, Dingdong Maicai adopts a front-end warehouse model and achieved profitability and growth in 2024.

In other words, whether international giants or unicorns like Dingdong, after years of trial and error, have explored a model like "front-end warehouses" that can not only meet consumer demand but also scale with decent profits.

However, in the future, the market will ultimately be dominated by giants because titans like JD.com possess more comprehensive infrastructure from the past, will evolve faster, and exhibit more significant scale effects, which translates to lower costs.

Taking 7FRESH as an example, it is akin to a promising child.

Relying on JD.com, 7FRESH has evolved from front-end warehouses to a combination of "one central store + N satellite stores." This combination, bolstered by JD.com's robust infrastructure, amplifies its advantages immensely.

The most notable effect is cost control, which reduces warehousing costs while enabling instant customer reach. In its northern base, delivery time is compressed to within 30 minutes.

The cost advantage is also evident in product prices.

Specifically, in the Tianjin market, which is a key area of expansion this year, 250 grams of Chilean JJJ-grade cherries are priced at 49.8 yuan, 10 yuan cheaper than the same product on Hema. Dettol disinfectant in a 1.8-liter bottle is priced at 79.8 yuan, approximately 10 yuan lower than some competing products.

Simultaneously, 7FRESH's greatest advantage is that it can leverage the traffic and membership base of the JD.com platform.

For example, compared to Sam's Club's high-threshold membership system, 7FRESH can reduce the consumption threshold to the industry's lowest level through JD.com PLUS members' free shipping policy. Behind this is a comprehensive price advantage for consumers.

Speaking of prices, the retail industry's pain point lies in pricing. Affordable prices are consumers' ultimate pursuit. Giants like JD.com have inherent advantages in connecting these cost-reduction links while ensuring their profits.

Under this model, we can observe that in first- and second-tier cities (primarily first-tier cities), after years of cultivation, some consumers have developed the habit of having everything delivered to their homes. Under the influence of the ratchet effect, once this habit is ingrained, it will only change if the price exceeds consumers' affordability.

The retail industry is plagued by heavy assets and thin profits, but it excels in stability. With a sufficiently large scale, it can compensate for the deficiency of low gross profit margins. Once a landscape is established, it is challenging to disrupt.

At this juncture, instant retail resembles the initial e-commerce battle, with a high probability of being a profitable and clear strategy.

However, compared to the uncertainty of being an emerging industry back then, now whoever has superior infrastructure will enjoy a price advantage, be more at ease when seizing market share and facing competition, and have the potential for revaluation in the capital market.